Developing countries that are home to a swathe of critical minerals, including cobalt, copper, gold and lithium, are in an ongoing process of exerting greater control over their natural resources. The trend, which has intensified over the last five years, is significant for mining firms, but also comes at a time when the world’s major geopolitical blocs are jostling to secure supplies of raw materials that are vital to their strategic interests and industries.
Our Resource Nationalism Index (RNI), which measures government control of economic activity within the mining and energy sectors across the globe, shows that 47 developing countries – including 17 major critical mineral producers – have seen a significant increase in risk in the last five years. A number that rises to 62 since the index launched nearly a decade ago. This trend means that 38 developing countries now fall within the two highest risk categories of the RNI, up from 29 in 2020 and 22 in 2016.
Figure 1: Resource nationalism has intensified in developing countries since 2020-Q1
Resource Nationalism Index, showing emerging markets that have seen an increase in risk since 2020-Q1
The geopolitics of minerals
Among the 10 highest risk jurisdictions in the RNI are several major O&G producers that have long deployed ‘traditional’ resource nationalist policies, such as expropriations, nationalisations and resource rent hikes. These include Venezuela (ranked 1st and highest risk), Russia (2nd), Mexico (3rd), Kazakhstan (4th) and Iraq (10th) all of which have seen a significant increase in risks over the past five years.
However, a similar trend is also underway in mineral producing jurisdictions. If this momentum continues, there is potential to see disruption to the supply of critical minerals for the renewables, tech and defence industries. The threat of shortages and higher prices is a latent supply chain risk that could undermine innovation and create vulnerabilities in national security and global competitiveness.
As geopolitical competition intensifies and western democracies seek to consolidate their interests regarding critical minerals, developing economies will attempt to leverage their increasingly strategic relevance to capture a greater share of the economic benefits of their natural resources. Some will opt for ‘traditional’ forms of resource nationalism, but the vast majority will employ a range of measures including tax and rent hikes alongside local content requirements. Producing countries are also likely to pursue a balancing act in which they do not openly align with either ‘east’ or ‘west’ and, instead, deploy policies that support their economic diversification beyond extraction into greater value-added activities.
As a result of these shifts, we expect to see an increasing number of policy announcements over the next year, both in producing countries and demand centres.
Cobalt, copper, gold and lithium see rise in resource nationalism
Combining country level output data on cobalt, copper, gold and lithium with its Resource Nationalism Index, we've found that the picture is worsening across developing world producers.
Figure 2: The share of key minerals exposed to resource nationalism risks
Resource Nationalism Index 2025-Q1, % share of mineral production per risk category
The Resource Nationalism Index shows that over 33% of copper production is taking place in ‘very high’ and ‘high’ risk countries, up from 17% in 2016. Chile and Peru, which have long been classed as stable mining environments, are home to 35% of global copper output, but both have experienced a major increase in state interventionism. Chile has dropped 34 places in the past five years to become the 69th riskiest country, while Peru has dropped 15 places to 132nd. Much of the shift in the Andean copper belt relates to domestic debates on the role that the industry should play in reducing inequalities and environmental impacts.
Lithium is another key input for the energy transition and new technologies. Its exposure to resource nationalism has also worsened significantly, and the concentration of production in a handful of jurisdictions amplifies the effects of any shock or major policy change. Chile produces 24% of the world’s lithium and President Gabriel Boric announced in April 2023 that he would bring the industry under state control. The decision to mandate public-private partnerships across the entire lithium industrial cycle, in which the Chilean state retains a majority stake in every project, has set off alarm bells for the mining industry.
With improvements in the Democratic Republic of the Congo’s score on the RNI, only 3.89% of cobalt production now takes place in a ‘very high’ risk country (Russia), while the 75.09% produced by the DRC sits in a ‘high’ risk play. However, the recent escalation of conflict in the DRC means that the trend could be reversed as local factions or regional governments may seek to increase control over the key resource.
In the case of gold, the share of production taking place in countries rated as ‘very high’ risk has expanded from none in 2016 to 18% today. With the January seizure of three tonnes of gold by the Malian government as part of a legal battle over the share of revenue owed by Canada’s Barrick Gold, the trend is likely to worsen in the next quarterly edition of the RNI, with a likely downgrade of Mali’s current ‘medium’ risk categorisation. Production in the country, which amounts to 2% of global output, is also likely to decline as operators consider their positions.
Aside from its use in the tech, aerospace and medical industries, gold is also used as a safe haven for investors in times of market instability. A challenge is that some key producing countries, including the US, China, Russia, Mexico, and Australia, also play a major role in current geopolitical rivalries. This means the metal’s supply chain can be disrupted by resource nationalism, as well as tariff and trade barriers, which can rattle economic activity, pushing up the demand for gold as a hedge against devaluation, inflation, or market instability.
Resource nationalism becomes central issue in trade war escalation
The issue of control over strategic resources will only gain greater prominence, as geopolitical and trade tensions escalate and developing producers look to maximise the value they can extract in a time of tightening fiscal purse strings. In the US-China trade war, both sides are taking measures related to strategic minerals. China has restricted the export of gallium, germanium and antimony to the US; while Washington, in turn, has sought to reduce reliance on Chinese supplies by stockpiling rare earths, promoting domestic mining efforts and floating the possibility of acquiring Greenland from Denmark. These actions underscore how resource control has become a key strategic element in geopolitical rivalries and the ongoing trade conflict.