The world’s shift toward clean energy and advanced technologies is reshaping global demand for critical minerals. These minerals – lithium, cobalt, nickel, rare earth elements, and others – are central to electric vehicles, renewable power systems, semiconductors, and digital infrastructure. As demand rises, so do the security implications, supply chain risks, and transparency challenges that governments and companies must navigate.
The International Energy Agency estimates that demand for minerals essential to the energy transition could double or even triple by 2030.[1] At the same time, more than 60% of today’s critical mineral demand is met through international trade, deepening dependencies between producing and consuming countries. These dynamics are driving governments to reconsider how to strengthen critical minerals security and protect their economies from emerging vulnerabilities.
Why critical minerals have become a security priority
Critical minerals and rare earth elements (REEs), such as gallium, underpin many of the technologies shaping modern economies – from batteries and electric vehicles to data centers and artificial intelligence systems. But supply is highly concentrated: a small number of countries control much of today’s extraction, processing, and refining capacity. This concentration elevates critical mineral supply chain risks, particularly for governments reliant on stable access to processed materials.
Governments are also responding to changes in how mineral-rich countries manage domestic resources. Some are increasing oversight of mining assets, adjusting export rules, and pursuing new industrial strategies. These policies can influence global supply flows, while broader geopolitical tensions and trade disputes add further uncertainty. In turn, trade disputes, export controls, or geopolitical tensions could quickly disrupt supply chains and economic growth. The result is a complex landscape where supply chain resilience and national security increasingly intersect.
What are the challenges of sourcing critical minerals and REE?
The Democratic Republic of Congo (DRC), home to the world’s largest cobalt reserves, illustrates the complexity of sourcing minerals in markets with elevated governance risks. Ranked 163 out of 180 on Transparency International’s Corruption Perceptions Index (CPI) 2025, the country faces persistent governance challenges, creating exposure for companies involved in licensing, equipment imports, and local sourcing.[2] What’s more, weak governance can raise operational, legal, and reputational risks for businesses operating in the sector.
Environmental pressures add another layer of complexity. Mining activities often stress local ecosystems through water depletion, pollution, and land degradation. For example, lithium extraction in South America’s “lithium triangle” has raised concerns about long-term water availability in sensitive regions. Communities near mining operations also face social and environmental impacts that shape public and regulatory expectations.
Together, these factors form an intricate network of supply chain, environmental, governance, and community-related risks – all of which require careful management as global demand accelerates.
How have governments responded to the inherent national security implications of rising demand for critical minerals?
Governments are adapting policy frameworks to strengthen critical mineral development, enhance supply security, and improve investment scrutiny.
- In 2022, Canada updated its foreign investment review process to apply greater scrutiny to transactions involving state-owned or state-influenced enterprises in the critical minerals sector. These adjustments reflect the growing importance of safeguarding strategic assets.
- The United States, which is import‑reliant on several minerals considered critical by the U.S. Geological Survey, is investing in domestic processing and rare earth separation capabilities. These efforts aim to diversify sourcing and reduce exposure to foreign-controlled supply chains.
Across markets, governments are acknowledging that mineral ownership transparency—understanding who ultimately controls strategic mineral assets—is becoming as important as diversifying physical supply.
Governments have set out guidelines and policies to support critical mineral development and supply chains, while also screening investors in the sector.
- Canada strengthened its foreign investment review process in 2022, particularly for transactions involving state-owned enterprises. These policies incorporate geostrategic considerations to protect critical mineral assets.
- Similarly, the United States, which is entirely import-reliant on the 12 minerals deemed “critical” by the US Geological Survey, has committed investment to build up rare earth separation facilities as a means to lessen reliance on foreign-controlled critical mineral supply chains.[3]
These shifts highlight a broader trend: ownership structures are becoming as important as physical supply chains. Governments are recognizing that who controls critical mineral assets can be as significant as where they are sourced.
How Moody’s can help
Moody’s provides data, tools, and insights to help governments and companies assess and address risks across critical mineral supply chains.
Supplier due diligence and ownership transparency
Moody’s flagship database, Orbis, provides data on 600 million public and private entities worldwide, which can help governments and companies screen investors, acquisitions, and ownership chains, while tools like the Shell Company Indicator can help uncover hidden influence, opaque subsidiaries, and cross-border linkages.
The results can be effective. Using Orbis data, we identified in 2024 that a major investor in rare earth elements, Shenghe Resources (Singapore) PTE Ltd, had links to a Chinese state-owned enterprise. In 2023, Shenghe’s parent company established 16 subsidiaries outside China (see figures 1-3 below).
Figure 1: Offshore companies facilitating Chinese pursuit of REEs
Figure 2: Shenghe resources (Singapore) PTE Ltd control structure
Figure 3: Shenghe subsidiaries
Conclusion
Critical minerals sit at the center of what Moody’s describes as the era of exponential risk. Geopolitical uncertainty, supply chain concentration, environmental pressures, and governance challenges often reinforce one another, creating complex vulnerabilities for governments and companies worldwide.
By using Moody’s data and analytical tools, public and private sector leaders can better understand these risks, enhance due diligence, and build resilient supply chains that support the technologies powering the global economy.
Contact us
If you would like to learn more about how Moody’s data and analytical solutions can help you screen investors, acquisitions, and ownership chains in mission-critical sectors, please contact the team.
[2] https://www.transparency.org/en/cpi/2025
[3] https://www.globalpolicywatch.com/2025/10/made-in-america-the-outlook-for-critical-minerals/
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