For decades, the West treated raw materials as mere commodities. The market was enough: if gallium, germanium, rare earths, or tungsten were needed, someone somewhere in the world would extract, refine, and sell them. That world is over.
The Financial Times perfectly captures the new reality: Chinese controls on exports of rare earths and critical metals are pushing governments and companies to invest billions to achieve self-sufficiency. But beware: the result will not necessarily be a more stable market. It could be exactly the opposite.
Beijing dominates entire supply chains. It controls about 90% of rare earth refining and huge shares of gallium, germanium, tungsten, and antimony production. When it restricts supply, prices explode. The FT chart is impressive: the price of germanium has nearly tripled since 2023, while tungsten has experienced a vertical acceleration.
The Western response is a race for diversification. Mines, refining plants, strategic stocks, bilateral agreements, and public subsidies. Thus, a new mineral diplomacy is born, in which a mine in Africa or a refining plant in Australia can be worth as much as a military base.
But there is a paradox. Building alternative supply chains requires huge investments and high prices. However, if China suddenly reopens the taps and floods the market, prices collapse and new Western projects become uneconomical. It is the perfect trap: depending on China is dangerous, but trying to break free can be financially devastating.
That is why raw material security can no longer be entrusted exclusively to the market. Long-term contracts, minimum prices, strategic stocks, and public guarantees are needed.
Globalization promised efficiency. Geopolitics today demands redundancy. And redundancy costs.
The point is that there is no longer a purely economic price for raw materials. There is a strategic price. And those who continue to buy only from the cheapest producer will probably discover, at the worst possible moment, that the true cost of dependence never appears on the invoice.
