Resource-rich nations across Africa, Latin America and Asia are implementing sweeping nationalist policies to capture greater economic value from critical minerals, fundamentally reshaping global supply chains and triggering fierce retaliation from industrialized powers. This structural transformation represents the most significant shift in resource governance in several decades, according to analysis by GIS Reports. Developing countries are employing mandatory domestic processing requirements, higher taxation and state takeovers to prevent the export of unprocessed commodities and to force smelting and refining operations onto their own soil.
These policies explicitly target the value-added premiums that have historically accrued to manufacturing nations, particularly China. In Africa, the Democratic Republic of the Congo controls more than 70 percent of global cobalt production and has instituted "super-profit" taxes, while Zambia has repeatedly raised its mining levies. Zimbabwe banned raw lithium exports by February 2026, mandating that all lithium concentrates be processed domestically and pushing Chinese investors including Huayou Cobalt and Sinomine to commit hundreds of millions of dollars to local processing plants.
Tanzania introduced reforms that substantially increased state authority over mining operations and expanded government revenue claims. Latin America is witnessing similar nationalist trends. Bolivia maintains one of the world's most state-centric approaches to lithium development, insisting on substantial state control over resources in the Salar de Uyuni, the world's largest salt flat.
Chile's National Lithium Strategy, finalized in late 2025, gave Codelco, the state-owned mining company and world's largest copper miner, a 51 percent controlling stake in the Nova Andino Litio joint venture with private firm SQM, effectively nationalizing the strategic asset through a public-private partnership. Mexico declared lithium a "patrimony of the nation" in 2022, canceling private concessions and creating LitioMX as the sole state exploitation vehicle, effectively expropriating holdings previously owned by Chinese firms including Ganfeng Lithium. Indonesia, the world's largest nickel producer, implemented a comprehensive ban on raw nickel ore exports starting in 2020 through its "downstreaming" policy, known locally as hilirisasi.
This forced mining giants to build smelters and battery plants locally to access the ore, transforming Indonesia into a global hub for stainless steel and EV battery components. The strategy proved wildly successful in altering trade flows. Industrialized nations dependent on these raw materials have responded with swift retaliation.
The European Union filed a World Trade Organization dispute against Indonesia's export ban, with the WTO dispute settlement body ruling in the EU's favor and finding that the ban violated Article XI of the General Agreement on Tariffs and Trade 1994, which prohibits quantitative restrictions on exports. However, Indonesia has largely ignored the ruling, signaling a potential crisis in the enforceability of WTO rules regarding industrial policy. For investors, the concept of the "obsolescing bargain" has returned with intensity, where investors make sunk costs only to have the state change the terms later.
Foreign companies now face risks of "indirect expropriation," where export bans or quota systems strip economic value from concessions without physically seizing the asset. The Democratic Republic of the Congo's shift in late 2025 from a total cobalt ban to a strict quota system created immediate force majeure events for traders like Glencore. Mexico's cancellation of 1,200 concessions in 2026, ostensibly for non-payment of duties, has raised fears that regulatory enforcement is being used as a tool for de facto nationalization.
Consuming nations are constructing parallel supply chains through "friend-shoring" and "de-risking" strategies. The United States launched Project Vault in February 2026, establishing a strategic minerals reserve to buffer against supply shocks alongside a diplomatic effort involving 54 countries to establish a preferential trade zone with adjustable tariffs to maintain price floors for critical minerals. The European Union's Critical Raw Materials Act aims to reduce dependency on single suppliers by mandating that significant percentages of rare earths and lithium be refined within the bloc or by trusted partners.
China, the world's dominant processor of these minerals, has retaliated using its own resource mechanisms. A framework enacted in October 2025 gave China extraterritorial control over materials containing as little as 0.1 percent Chinese-origin content, mirroring U.S. sanctions tactics. Beijing suspended this measure a month later as part of deescalation efforts with the United States, though the measures are likely to be restored as of November 2026.
Analysts predict that through 2027-2030, the dominant model will be mandatory domestic processing paired with state-majority joint ventures rather than full expropriation. Developing countries will refine existing frameworks by raising royalties, tightening environmental and local-content rules and using state enterprises as controlling partners. Import-dependent powers will gradually accept these terms while accelerating friend-shoring agreements such as U.S.-DRC cobalt and EU-Namibia lithium pacts.
WTO dispute rulings will continue with limited enforcement capacity as developing nations calculate that strategic mineral leverage outweighs trade compliance costs. The underlying lesson is stark: The era of free-flowing raw materials extracted under favorable terms for Western and Chinese multinationals is being systematically replaced by new forms of resource nationalism. Supply security will no longer come from the open market but from strategic, often conflictual negotiation with sovereign owners.
The winners in the next decade will be those who successfully manage the geopolitical friction between resource owners and processing nations. Source: GIS Reports (gisreportsonline.com), article by Bob Savic
Source: gisreportsonline.com