The recent Critical Minerals Ministerial meeting hosted by the United States Department of State represented a new attempt by the USA to shore up its global partnerships for rare earth and other critical mineral supply chains through diplomacy. However, it comes in the wake of much more coercive actions—the USA’s intervention in Venezuela and the pressure it has exerted to obtain Greenland—that were framed, in part, in terms of obtaining resources, from transition minerals to hydrocarbons.
This reflects a wider trend: the USA, China and Russia—today’s great powers—have all developed ambitions to access, secure and even capture overseas resources and the associated markets in the name of strategic interests. They have deployed a series of instruments that include well-established channels of economic diplomacy through legitimate investments that provide local development benefits. But, increasingly, violent resource appropriation and territorial control have also become features of the wider great power resource scramble that can be characterized as new mercantilism-driven geopolitics.
The risks associated with this increasingly mercantilist approach are particularly pronounced for resource-rich lower-income countries, which have less leverage and institutional capacity in financial, technological and even military terms to set the conditions of their own resource exploitation. At a time of reduced multilateral safeguards, such countries must balance opportunities to capitalize on this race for raw materials while avoiding the fate of those that have already become its casualties. This essay explores the growing trend towards resource mercantilism among the great powers and lays out some of the resulting perils that face the global rest.
Great power competition
Much of the conversation around modern-day mercantilism originally centred on China’s export-oriented industrial policy in the 2000s. Its state-led capitalism was not entirely dissimilar to that of other East Asian developmental states. However, the scale and impact of China’s economic rise have elicited particular concern and an increasingly strong policy response by the West over the past decade. This has included several rounds of trade wars, escalating technological restrictions and efforts to de-risk economic relations with China. Recent efforts have focused on critical minerals, a sector where China has come to dominate and has increasingly weaponized in its strategic rivalry with the West. This rivalry has only deepened in the years since the onset of Russia’s full-scale invasion of Ukraine in 2022.
Since around the turn of the century, China has pursued a long-term state-led strategy to secure overseas energy and mineral supplies to fuel its economic growth and industrial development. Chinese overseas investments in and imports from resource-rich lower-income countries have been concentrated in extractive sectors. Concerns have been raised by the potentially military-capable infrastructure and ports that China has constructed in several countries through its Belt and Road Initiative (BRI), which serve China’s combined geostrategic and natural resource interests.
While a far less significant actor than China in overall economic terms, Russia has been using its oil and gas exports as instruments of political coercion for several years, as well as a way to finance its military aggression abroad. It continues to project power through its commodity exports—not only oil and gas but also agricultural products—while pursuing economic fortification through an import substitution policy in place since at least 2015.
Russian leaders have explicitly framed the country’s domestic natural resource base as a means of achieving greater geopolitical leverage, sovereignty and power. And Russia has ambitions to become a major exporter in mineral markets as part of these wider political goals. Russia has attempted to realize this aim not only through domestic extraction but also through violent resource appropriation. It has already started integrating Ukrainian territories it has occupied or illegally annexed into its industrial strategies for energy, mineral and food production and export. State actors have engaged in systematic destruction, disruption and even theft in sectors where Ukraine is a competitor for global markets.
But if Russia’s appropriation of a sovereign state’s resources using military force was until recently viewed as an aberration in a largely rules-based global economic order, it now appears much less so—that is, if the USA’s stated intention of appropriating Venezuelan oil and gas and its posturing on Greenland’s resources are any indication. There are also concerns about resource-securing motives in China’s activities in disputed territories in the East and South China Seas.
Overseas resource extraction is transactional by nature, but as coercive forms of resource diplomacy are increasingly utilized, this could very plausibly lead to a race to the bottom, as great powers leverage power asymmetries—economic, political and military—to secure resources, potentially at the partner country’s expense.
A race to the bottom?
Just a few years ago, as the scramble for critical minerals was accelerating, it appeared to be a race to the top, with various investor states offering a greater menu of options for resource-rich lower-income countries in return for access to those resources. These options ranged from mineral-related multilateral frameworks—such as the USA’s Minerals Security Partnership and the European Union’s proposed Critical Raw Materials Club—to related investments in infrastructure for development, including the EU’s Global Gateway (launched in 2021) and the Group of Seven (G7) Partnership for Global Infrastructure and Investment (PGII; launched in 2022). The offers to partner states—often framed as alternatives to Chinese investments—emphasized higher environmental, social and governance (ESG) standards; greater localization of benefits; and other support for sustainable development.
At the time, the minerals rush was linked to the idea of a green transition, supported by significant climate finance commitments. The greater set of options available allowed some resource-rich countries to successfully renegotiate existing contracts to extract greater local and national development benefits. The further intensification of great power competition over resources has not, however, led to even more attractive offers to resource-rich countries. Rather, engagement appears to be shifting towards a race to the bottom.
The case of Ukraine clearly illustrates today’s great power resource mercantilism, with Russia’s violent resource appropriation on the one hand, and the highly unbalanced 2025 Ukrainian–US minerals deal on the other. The latter was publicly portrayed as an opportunity for Ukraine to secure more foreign investment. However, the implicit threat of losing US security assistance ultimately shaped the deal’s terms, and the few mining concessions that have since been negotiated have privileged the interests of US oligarchs. These developments in Ukraine illustrate how, under conditions of heightened geopolitical rivalry, resource governance can become subordinate to power politics at the expense of sustainable and long-term developmental planning. The USA’s more recent strategic partnership with the Democratic Republic of the Congo (DRC), which gives the USA preferential access to mineral extraction, contains many of the same exploitative terms that have been so problematic in the DRC’s past.
The scramble for resources is changing in another significant way. In the past decade it has been focused on the transition minerals necessary for global clean energy transformation. However, there is now a resurgent interest in hydrocarbons. In its most recent energy strategy, Russia reaffirmed its commitment to hydrocarbon development and export, envisaging an increase in exports to 540 million tonnes by 2030 and continuing at this level for the next two decades. The goals additionally include the expansion of natural gas and coal production. The USA is now also putting renewed emphasis on hydrocarbons. It is already the world’s largest producer of oil and gas and the largest exporter of natural gas. As a matter of official policy, the USA is making increasing use of its economic and political clout to expand its global market share in the fossil fuels trade. In the case of Venezuela, it is also attempting to control production and export conditions in other states through force.
Perils for the global rest
As geopolitical competition for resources deepens, tools of coercion, denial and even appropriation may be increasingly normalized. One implication of great power resource mercantilism is that it narrows rather than widens the range of development options available to resource-rich lower-income countries. For such countries, access to the necessary capital and technology for developing their resource sectors is increasingly tied to strategic bargains, forced on them under conditions of unequal geopolitical power. In other words, they face mounting external pressure to prioritize external interests over domestic development objectives.
These external pressures can be of particular risk for low-income countries with fragile institutions, high debt burdens and acute security concerns. Under these circumstances, extractive projects may see short-term considerations override consultation and regulatory oversight, including environmental and social safeguards, that would be important foundations for long-term inclusive development. In addition, many resource-rich low-income countries struggle with domestic fragmentation, elite capture of revenues or competing patronage networks. Perceived exclusion and unfairness can generate resentment among the population of the low-income country, as well as exacerbating local grievances and intensifying tensions—for example over land rights—in already marginalized regions directly affected by the projects. This can increase the likelihood of protest, repression and violence. External competition can also magnify existing governance issues, weakening national bargaining positions and negotiating leverage.
At the same time, resource-rich low-income countries are not entirely without agency. Although the earlier ‘race to the top’ provided more favourable bargaining conditions, competition among external powers can still, in certain cases, create opportunities to renegotiate contracts, diversify partnerships or extract greater fiscal benefits. For example, Ghana, Indonesia, Namibia, Nigeria and Zimbabwe have all used export restrictions to promote domestic processing of minerals, to retain more value within their own economies. Other major mineral exporters in the developing world—including Bolivia, Burkina Faso, Cameroon, Chile, Gabon, Guinea, Kenya, Mali, Peru and Zambia—have also significantly increased mineral export taxes, mining taxes, royalties, deposits and other fees. In 2024 the DRC also successfully renegotiated elements of the 2008 Sicomines agreement with China.
These cases show that rivalry among external actors can still expand the bargaining space available for producer countries. However, such agency depends heavily on institutional capacity—the technical and administrative ability to negotiate contracts, enforce regulations and manage revenues. In addition, while domestic processing does help to retain value within producer states, it does not resolve and can even exacerbate many of the related environmental and social challenges of extractive activities. Meanwhile, official development assistance (ODA), which supported institutional capacity-building, the promotion of inclusive development and the strengthening of ESG-related safeguards, is seeing dramatic cuts.
A further concern is the erosion of multilateral frameworks capable of constraining these coercive resource politics. There is a lack of universal frameworks to govern critical minerals extraction: current frameworks and proposals for global sustainable resource governance are voluntary and lack enforcement mechanisms. Club-based arrangements such as the Minerals Security Partnership and the new arrangements announced at the Critical Minerals Ministerial—are often open to only a few states. Even if they do not currently bar members from maintaining trade and investment links with competitors, for producer states these bilateral and mini-lateral deals can still sit uneasily alongside policies aimed at preserving diversified economic partnerships and strategic autonomy.
In this context, what precautions might be realistic for resource-rich low-income countries? Maintaining diversified geopolitical partnerships can help to preserve bargaining space and strategic flexibility, but in a more heavily securitized and resource mercantilist world, the options to do so may be increasingly limited. Producer states can strengthen their hand through actions at the domestic level. Reinforcing domestic institutional capacity—particularly in contract negotiation, revenue management and regulatory oversight—can reduce vulnerability to external pressure. Greater transparency in resource governance can limit elite capture, improve accountability and increase local development gains.
In addition, actors such as the EU are still formulating their own strategies in the face of great power resource mercantilism. If they are interested in safeguarding a more inclusive, equitable global order, they should continue to support multilateral, rules-based and sustainable development-centred approaches to the governance of natural resources.
ABOUT THE AUTHOR(S)
Dr Jiayi Zhou is a Senior Researcher in the SIPRI Conflict, Peace and Security Programme.
The recent Critical Minerals Ministerial meeting hosted by the United States Department of State represented a new attempt by the USA to shore up its global partnerships for rare earth and other critical mineral supply chains through diplomacy. However, it comes in the wake of much more coercive actions—the USA’s intervention in Venezuela and the pressure it has exerted to obtain Greenland—that were framed, in part, in terms of obtaining resources, from transition minerals to hydrocarbons.
This reflects a wider trend: the USA, China and Russia—today’s great powers—have all developed ambitions to access, secure and even capture overseas resources and the associated markets in the name of strategic interests. They have deployed a series of instruments that include well-established channels of economic diplomacy through legitimate investments that provide local development benefits. But, increasingly, violent resource appropriation and territorial control have also become features of the wider great power resource scramble that can be characterized as new mercantilism-driven geopolitics.
The risks associated with this increasingly mercantilist approach are particularly pronounced for resource-rich lower-income countries, which have less leverage and institutional capacity in financial, technological and even military terms to set the conditions of their own resource exploitation. At a time of reduced multilateral safeguards, such countries must balance opportunities to capitalize on this race for raw materials while avoiding the fate of those that have already become its casualties. This essay explores the growing trend towards resource mercantilism among the great powers and lays out some of the resulting perils that face the global rest.
Great power competition
Much of the conversation around modern-day mercantilism originally centred on China’s export-oriented industrial policy in the 2000s. Its state-led capitalism was not entirely dissimilar to that of other East Asian developmental states. However, the scale and impact of China’s economic rise have elicited particular concern and an increasingly strong policy response by the West over the past decade. This has included several rounds of trade wars, escalating technological restrictions and efforts to de-risk economic relations with China. Recent efforts have focused on critical minerals, a sector where China has come to dominate and has increasingly weaponized in its strategic rivalry with the West. This rivalry has only deepened in the years since the onset of Russia’s full-scale invasion of Ukraine in 2022.
Since around the turn of the century, China has pursued a long-term state-led strategy to secure overseas energy and mineral supplies to fuel its economic growth and industrial development. Chinese overseas investments in and imports from resource-rich lower-income countries have been concentrated in extractive sectors. Concerns have been raised by the potentially military-capable infrastructure and ports that China has constructed in several countries through its Belt and Road Initiative (BRI), which serve China’s combined geostrategic and natural resource interests.
While a far less significant actor than China in overall economic terms, Russia has been using its oil and gas exports as instruments of political coercion for several years, as well as a way to finance its military aggression abroad. It continues to project power through its commodity exports—not only oil and gas but also agricultural products—while pursuing economic fortification through an import substitution policy in place since at least 2015.
Russian leaders have explicitly framed the country’s domestic natural resource base as a means of achieving greater geopolitical leverage, sovereignty and power. And Russia has ambitions to become a major exporter in mineral markets as part of these wider political goals. Russia has attempted to realize this aim not only through domestic extraction but also through violent resource appropriation. It has already started integrating Ukrainian territories it has occupied or illegally annexed into its industrial strategies for energy, mineral and food production and export. State actors have engaged in systematic destruction, disruption and even theft in sectors where Ukraine is a competitor for global markets.
But if Russia’s appropriation of a sovereign state’s resources using military force was until recently viewed as an aberration in a largely rules-based global economic order, it now appears much less so—that is, if the USA’s stated intention of appropriating Venezuelan oil and gas and its posturing on Greenland’s resources are any indication. There are also concerns about resource-securing motives in China’s activities in disputed territories in the East and South China Seas.
Overseas resource extraction is transactional by nature, but as coercive forms of resource diplomacy are increasingly utilized, this could very plausibly lead to a race to the bottom, as great powers leverage power asymmetries—economic, political and military—to secure resources, potentially at the partner country’s expense.
A race to the bottom?
Just a few years ago, as the scramble for critical minerals was accelerating, it appeared to be a race to the top, with various investor states offering a greater menu of options for resource-rich lower-income countries in return for access to those resources. These options ranged from mineral-related multilateral frameworks—such as the USA’s Minerals Security Partnership and the European Union’s proposed Critical Raw Materials Club—to related investments in infrastructure for development, including the EU’s Global Gateway (launched in 2021) and the Group of Seven (G7) Partnership for Global Infrastructure and Investment (PGII; launched in 2022). The offers to partner states—often framed as alternatives to Chinese investments—emphasized higher environmental, social and governance (ESG) standards; greater localization of benefits; and other support for sustainable development.
At the time, the minerals rush was linked to the idea of a green transition, supported by significant climate finance commitments. The greater set of options available allowed some resource-rich countries to successfully renegotiate existing contracts to extract greater local and national development benefits. The further intensification of great power competition over resources has not, however, led to even more attractive offers to resource-rich countries. Rather, engagement appears to be shifting towards a race to the bottom.
The case of Ukraine clearly illustrates today’s great power resource mercantilism, with Russia’s violent resource appropriation on the one hand, and the highly unbalanced 2025 Ukrainian–US minerals deal on the other. The latter was publicly portrayed as an opportunity for Ukraine to secure more foreign investment. However, the implicit threat of losing US security assistance ultimately shaped the deal’s terms, and the few mining concessions that have since been negotiated have privileged the interests of US oligarchs. These developments in Ukraine illustrate how, under conditions of heightened geopolitical rivalry, resource governance can become subordinate to power politics at the expense of sustainable and long-term developmental planning. The USA’s more recent strategic partnership with the Democratic Republic of the Congo (DRC), which gives the USA preferential access to mineral extraction, contains many of the same exploitative terms that have been so problematic in the DRC’s past.
The scramble for resources is changing in another significant way. In the past decade it has been focused on the transition minerals necessary for global clean energy transformation. However, there is now a resurgent interest in hydrocarbons. In its most recent energy strategy, Russia reaffirmed its commitment to hydrocarbon development and export, envisaging an increase in exports to 540 million tonnes by 2030 and continuing at this level for the next two decades. The goals additionally include the expansion of natural gas and coal production. The USA is now also putting renewed emphasis on hydrocarbons. It is already the world’s largest producer of oil and gas and the largest exporter of natural gas. As a matter of official policy, the USA is making increasing use of its economic and political clout to expand its global market share in the fossil fuels trade. In the case of Venezuela, it is also attempting to control production and export conditions in other states through force.
Perils for the global rest
As geopolitical competition for resources deepens, tools of coercion, denial and even appropriation may be increasingly normalized. One implication of great power resource mercantilism is that it narrows rather than widens the range of development options available to resource-rich lower-income countries. For such countries, access to the necessary capital and technology for developing their resource sectors is increasingly tied to strategic bargains, forced on them under conditions of unequal geopolitical power. In other words, they face mounting external pressure to prioritize external interests over domestic development objectives.
These external pressures can be of particular risk for low-income countries with fragile institutions, high debt burdens and acute security concerns. Under these circumstances, extractive projects may see short-term considerations override consultation and regulatory oversight, including environmental and social safeguards, that would be important foundations for long-term inclusive development. In addition, many resource-rich low-income countries struggle with domestic fragmentation, elite capture of revenues or competing patronage networks. Perceived exclusion and unfairness can generate resentment among the population of the low-income country, as well as exacerbating local grievances and intensifying tensions—for example over land rights—in already marginalized regions directly affected by the projects. This can increase the likelihood of protest, repression and violence. External competition can also magnify existing governance issues, weakening national bargaining positions and negotiating leverage.
At the same time, resource-rich low-income countries are not entirely without agency. Although the earlier ‘race to the top’ provided more favourable bargaining conditions, competition among external powers can still, in certain cases, create opportunities to renegotiate contracts, diversify partnerships or extract greater fiscal benefits. For example, Ghana, Indonesia, Namibia, Nigeria and Zimbabwe have all used export restrictions to promote domestic processing of minerals, to retain more value within their own economies. Other major mineral exporters in the developing world—including Bolivia, Burkina Faso, Cameroon, Chile, Gabon, Guinea, Kenya, Mali, Peru and Zambia—have also significantly increased mineral export taxes, mining taxes, royalties, deposits and other fees. In 2024 the DRC also successfully renegotiated elements of the 2008 Sicomines agreement with China.
These cases show that rivalry among external actors can still expand the bargaining space available for producer countries. However, such agency depends heavily on institutional capacity—the technical and administrative ability to negotiate contracts, enforce regulations and manage revenues. In addition, while domestic processing does help to retain value within producer states, it does not resolve and can even exacerbate many of the related environmental and social challenges of extractive activities. Meanwhile, official development assistance (ODA), which supported institutional capacity-building, the promotion of inclusive development and the strengthening of ESG-related safeguards, is seeing dramatic cuts.
A further concern is the erosion of multilateral frameworks capable of constraining these coercive resource politics. There is a lack of universal frameworks to govern critical minerals extraction: current frameworks and proposals for global sustainable resource governance are voluntary and lack enforcement mechanisms. Club-based arrangements such as the Minerals Security Partnership and the new arrangements announced at the Critical Minerals Ministerial—are often open to only a few states. Even if they do not currently bar members from maintaining trade and investment links with competitors, for producer states these bilateral and mini-lateral deals can still sit uneasily alongside policies aimed at preserving diversified economic partnerships and strategic autonomy.
In this context, what precautions might be realistic for resource-rich low-income countries? Maintaining diversified geopolitical partnerships can help to preserve bargaining space and strategic flexibility, but in a more heavily securitized and resource mercantilist world, the options to do so may be increasingly limited. Producer states can strengthen their hand through actions at the domestic level. Reinforcing domestic institutional capacity—particularly in contract negotiation, revenue management and regulatory oversight—can reduce vulnerability to external pressure. Greater transparency in resource governance can limit elite capture, improve accountability and increase local development gains.
In addition, actors such as the EU are still formulating their own strategies in the face of great power resource mercantilism. If they are interested in safeguarding a more inclusive, equitable global order, they should continue to support multilateral, rules-based and sustainable development-centred approaches to the governance of natural resources.
ABOUT THE AUTHOR(S)