Digging Deep: Transatlantic Cooperation, Mineral Diplomacy and Great Power Competition

CSDS POLICY BRIEF • 5/2026

By Jonata Anicetti

9.2.2026

Key issues

• China, Russia, the US and the EU all embody distinct mineral diplomacy models, respectively strategic, reactive, transactional and dirigiste;
• Neither the US’ transactional approach nor the EU’s dirigiste model stands a fighting chance against China’s incumbent advantage;
• Yet, while the challenge is often framed as one of supply, the solution lies largely on the demand side and in EU-US cooperation.

Introduction

Critical Raw Materials (CRMs) such as rare earths, cobalt, nickel and lithium are the backbone of today’s defence and civil industries. CRMs’ geological endowments are concentrated in the so-called “Global South”, making mineral diplomacy increasingly important in great power competition. Yet, while China, Russia, the United States (US) and the European Union (EU) are all interested in CRMs, they adopt markedly distinct mineral diplomacy models reflecting different structural conditions, goals and historical experiences.

China dominates CRM markets, often through vertically integrated industries spanning CRM mining and processing. China’s willingness to weaponise its centrality in CRM networks through export controls has resulted in decoupling and derisking strategies by several actors, most notably the US. Washington is trying to create an alternative network through a combination of industrial policy and increasingly assertive mineral diplomacy. In fact, the US has been sidelining multilateral strategies to mimic countertrade practices – barter and other non-monetary transactions – long dominated by its Chinese and Russian rivals, including arms- and infrastructure-for-minerals arrangements. The launch in February 2026 of the US-led Critical Minerals Ministerial and the Forum on Resource Geostrategic Engagement (FORGE) initiative signals a renewed multilateral engagement, but this development has so far coexisted with, rather than displaced, a predominantly bilateral and transactional approach.

Russian arms-for-minerals deals are targeting mostly precious minerals and metals like gold and diamonds, suggesting a reactive strategy to bypass Western financial sanctions and pay for Wagner’s and then Africa Corps’ operations, rather than a strategic attempt to create its own CRM network. By contrast, China is moving to decentralising processing operations in mineral supplier countries, when the US appears to penalise them, even if they are in friendly countries such as Canada. In fact, the US model displays transactional, mercantilist traits, with trade surplus maximisation undermining broader geoeconomic aims. In this sense, the US model aligns with neither China’s strategic nor Russia’s reactive models of mineral diplomacy; rather, it emerges as a new, transactional model.

A late entrant to the game, since 2021, the EU has signed 15 strategic partnerships on raw materials with resource-rich countries. Yet, these mostly involve loose Memoranda of Understanding (MoUs) rather than concrete offtake agreements (long-term contracts between producers and buyers). Like the US, or perhaps even more so, the EU is indeed struggling to convince European downstream industrial sectors to diversify CRM suppliers. This is systematically discouraged by Chinese predatory market manipulation that makes long-term offtake agreements with countries other than China financially very risky. The European Commission is thus proposing a targeted amendment to the Critical Raw Materials Act. In practice, the Commission wants the authority to make diversification mandatory whenever it deems necessary. In contrast to the US’ transactional approach, the EU’s emerging “dirigiste model” relies less on bilateral bargaining and countertrade and more on inward-looking regulatory compulsion.

While discussing the strengths and limits of each mineral diplomacy model, this CSDS Policy Brief argues that neither the US’ transactional model, nor the EU’s embryonic dirigiste model, stands a realistic chance against China’s incumbent advantage and the unforgiving economics of critical raw materials. After noting that the challenge is often framed as a supply-side problem despite the solution lying largely on the demand side, the Policy Brief sets out four policy recommendations centred on EU-US cooperation.

Russia’s reactive model: arms-for-minerals

Under President Vladimir Putin, Russia began to rebuild its global presence using resource diplomacy. As for Soviet antecedents, Russia quickly turned to countertrade, including bartering arms for minerals. In July 2012, Russia was reported to have been in negotiations with Zimbabwe to barter arms for platinum. The Kremlin-connected Russian Technologies Corporation reached an agreement with the Zimbabwean authorities to exchange Russian helicopters for mining rights to develop the world’s second-largest deposit of platinum. The following year, the Russian firm, CBC Russia, which had the rights for chrome mining in Darwendale, Zimbabwe, reportedly entered a joint venture with the Zimbabwe Mining Development Corporation (ZMDC) to extract platinum.

Since around 2017, the former Russian private military company, “Wagner Group”, utilised arms-for-minerals barter deals to expand Moscow’s influence in Africa. According to a 2024 European Parliament report, Moscow has leveraged the supply of defence equipment to secure access to gold and diamonds in the Central African Republic (CAR), cobalt in the Democratic Republic of the Congo (DRC), uranium in Namibia, gold and oil in Sudan and chromite in Madagascar. In fact, by mid-2023, the Wagner Group was active or in negotiations with 13 African countries.

In the Central African Republic, through Midas Resources, a CAR mining firm, the Wagner Group controlled ‘concessions and licences for prospecting and extracting minerals, precious and semi-precious metals, and gems’, according to the US Office of Foreign Assets Control (OFAC). The Wagner Group also had huge stakes in the Ndassima gold mine. In 2022, Diamville, a gold and diamond trading firm in CAR, was flagged for ‘converting CAR-origin gold into US dollars’ after OFAC sanctioned numerous other Wagner-linked entities. Diamville was also accused of smuggling diamonds mined in CAR into European and United Arab Emirates (UAE) markets.

Companies controlled by the former leader of the Wagner Group, Yevgeny Prigozhin, mined gold in Sudan for several years, according to the US government and the EU. Reportedly, Sudan’s Rapid Support Force, one of two rival factions battling for control of the East African country, provided security for these mining sites, with Wagner in exchange providing training to the Sudanese group. The barter deal included shoulder-mounted Man-portable anti-aircraft missiles to be shipped from neighbouring CAR. According to several international investigations, Sudanese gold was also used to finance the Russian war in Ukraine. Sudan was among the first countries to acknowledge Crimea’s annexation in 2014. Since that time, gold has demonstrated its utility to amass and transfer funds, bolster the Russian state treasury and bypass international financial oversight.

Foreign observers believed Wagner’s capacity to self-finance its operations to be critical. Reportedly, Wagner was able to deploy forces and sustain them thanks to resource exploitation in Africa and beyond. The Africa Corps, which replaced Wagner Group following Prigozhin’s death, still focuses on securing and boosting productivity at Africa’s gold mines, acquiring stakes in the continent’s gold and channelling gold back to Russia. Russia’s mineral diplomacy model thus points less to a long-term plan to establish an autonomous CRM network than to a reactive strategy aimed at evading Western sanctions and financing the activities of Wagner and, later, the Africa Corps.

China’s strategic model: industrialisation-for-minerals

China has also engaged in arms-for-minerals bartering. In 2009, the Zimbabwe Ministry of Defence procured twelve K-8 jet trainer aircraft from China, paying with minerals worth US$240 million. Additionally, Zimbabwe reportedly granted the Chinese defence firm Norinco mining rights to extract platinum, gold, copper and diamonds from several sites in exchange for military equipment. However, China’s arms exports are typically but one component of a much broader and patient strategy to secure an overseas supply of CRMs. Notoriously, China has long invested in infrastructural projects like railways and ports in minerals-rich countries. In 1970, Beijing provided ¥1 billion in interest-free loans to finance the construction of the TAZARA railway linking Zambia and Tanzania. The line was intended to give copper-producing Zambia an alternative route to international markets after neighbouring Rhodesia (now Zimbabwe), then under white minority rule, closed its borders to protest Zambia’s independence from Britain. Decades later, in 2008, Chinese companies introduced similar arrangements in the cobalt-rich DRC, exchanging infrastructure development for access to minerals.

With the launch of the Belt and Road Initiative (BRI) in 2013, China’s foreign assistance has grown in ambition, while also moving to interest-bearing loans. Chinese lending to Africa reached its high point in 2016, after which Beijing shifted away from large, sovereign-backed infrastructure loans toward acquiring equity stakes in projects that Chinese firms would subsequently run. Recent cases include the state-owned China Harbor Engineering Company’s minority stake in Nigeria’s Lekki Deep Sea Port and the 30-year concession granted to China Road and Bridge Corporation to operate Kenya’s Nairobi Expressway. In 2021, after the DRC joined the BRI, China Molybdenum raised its ownership in the Tenke Fungurume copper and cobalt mine from 56% to 85%, having first acquired the asset in December 2020. Chinese mining and construction companies, including China Railway Group, have since upgraded infrastructure around mining sites and nearby road networks to facilitate the transport of minerals to China.

Increasingly, however, mineral-rich countries in the “Global South” want to scale manufacturing activities beyond infrastructure. In March 2019, Indonesia proposed 28 projects worth US$91.1 billion to Chinese investors, as part of its participation in the BRI. The following year, Jakarta imposed a ban on nickel exports to draw investment into domestic upstream industries. This move encouraged Chinese original equipment manufacturers to help build a local supply chain for metals and battery production, with minerals extracted and processed in Indonesia before being used in nearby battery facilities. One example is Contemporary Amperex Technology (CATL), China’s largest electric vehicle battery producer, which committed US$5 billion in 2020 to develop a gigafactory in Indonesia. The investment was paired with an offtake agreement with the state-owned miner PT Aneka Tambang, under which 60% of the nickel supplied would be processed domestically for battery production.

In July 2024, the Chinese mining company Shengxiang Investments said it was close to finishing a US$40 million lithium processing plant in Zimbabwe, with the capacity to produce 2,500 tonnes per day and provide jobs for more than 200 local workers. Related infrastructure developments, including new roads, are also being carried out. Similarly, the Ghanaian government has announced plans to work with a Chinese firm on a US$450 million manganese refinery, aimed at adding value to the manganese that Ghana has exported in raw form since 1916. The project is expected to generate around 400 jobs and marks an important move toward broader industrial development in parts of the country.

China’s mineral diplomacy model has therefore evolved over decades to increasingly focus on industrial localisation, leveraging competences and skills that, whether lost or never developed elsewhere, remain unrivalled.

The US’ transactional model: eroding multilateralism and mimicking rivals

The United States has seriously engaged in mineral diplomacy since the early 2020s. While the goal is clear – decoupling from China and developing its own CRM network – the means are less so and, in many respects, transactional. These efforts encompass instrumental multilateral initiatives, such as the Minerals Security Partnership (MSP) and its successor, FORGE, alongside bilateral and transactional measures, such as tariffs imposed on MSP partner Canada that affect mineral supplies to the US. They also include copycat initiatives modelled on US rivals, such as the US-Ukraine arms-for-minerals deal, or infrastructure-for-minerals arrangements like the strategic partnership recently agreed with the DRC.

In June 2022, under the Biden administration, the US launched the MSP, also dubbed “the metallic NATO” (sic), together with Australia, Canada, Estonia, Finland, France, Germany, India, Italy, Japan, Norway, the Republic of Korea, Sweden, the United Kingdom and the EU. The MSP members aimed to use their collective financial clout against Chinese price dumping, thus encouraging Western private companies and venture capital to invest in mining, processing or recycling of minerals. However, in July 2025, under the second Trump administration, the US launched the Quad critical minerals partnership together with Japan, Australia and India, a shift to minilateralism that effectively sidelined the MSP in favour of Indo-Pacific partners. In fact, both the MSP and the Quad partnership have been mired by US tariffs and an assertive posture towards mineral-rich countries such as Ukraine, Canada or autonomous territories such as Greenland.

In April 2025, the US concluded an arms-for-minerals agreement with Ukraine under which Kyiv grants the US preferential access to its natural resources, including minerals, as well as oil and gas, in exchange for wartime aid. In December 2025, through a strategic partnership with the DRC, the US obtained preferential access to DRC minerals for US and “aligned” persons. In exchange, Washington pledged security alongside economic benefits, including a renewed commitment to the Lobito Economic Corridor – the Western response to China’s BRI. Launched during the Biden administration through the G7 framework, the ‘first open-access transcontinental rail network in Africa’ project will support minerals transportation from the DRC and Zambia westward through the port of Lobito in Angola, also enabling ‘additional investment in agribusiness to enhance food security, digital infrastructure, and expanded access to clean power’.

Yet, in February 2026, Washington launched FORGE as the MSP’s successor, thereby underscoring the limits of bilateral diplomacy to fix critical mineral vulnerabilities rather than marking a full departure from a transactional approach. Indeed, the US’ mineral diplomacy model is still in trial-and-error mode, increasingly flirting with countertrade practices long mastered by its rivals, but in a distinctly transactional fashion. US mineral diplomacy objectives are more ambitious than Russia’s, yet its structural conditions are far weaker than China’s. The US cannot offer localisation of CRM processing and refining to mineral supplier countries as China does, even if it wanted to. Simply put, it lacks the required competences and scale. Unsurprisingly, most action is happening at the domestic level. Most notably, while the Pentagon has become the largest shareholder in the rare earths mining and processing company, MP Materials, in an effort to (re)build those competences at home and at scale, the Export-Import Bank of the United States (EXIM) has committed US$10 billion to “Project Vault”, a domestic strategic reserve for critical minerals.

The EU’s dirigiste model?

The question mark is necessary because the EU’s mineral diplomacy remains largely on paper. Nonetheless, according to the European Commission, ‘[i]nternational partnerships on raw materials are bringing concrete results for the EU and its partners […] CRMs imports from Canada, Kazakhstan, Greenland, Chile and Namibia have increased both in volume and value in the past years’. Furthermore, the Commission has already approved 13 Strategic Projects in third countries. Strategic Projects must meet the criteria established in the Critical Raw Materials Act, notably regarding environmental, social and governance (ESG) standards as well as technical feasibility, while also being beneficial to both the EU and CRM suppliers. Most importantly, the projects must demonstrate the prospects of concluding offtake agreements with European downstream industries. And yet, as the Commission admits, ‘price volatility and non-transparent market practices challenge existing production capacities and the future development of more resilient CRMs value chains […] contribut[ing] to the limited number of offtake agreements between EU and partners upstream and downstream sectors’.

Through the RESourceEU Action Plan launched in December last year, the Commission hopes to boost raw materials diplomacy and make it more operational. To kick-start the implementation of the RESourceEU Action Plan, the Commission, the European Investment Bank (EIB) and member states are unlocking financial support for Greenland Resources’ Malmbjerg molybdenum project to achieve supply security for the defence sector. Evidently, however, the Commission is little confident that increased financing and upstream operational support will suffice to persuade European downstream industrial sectors to supply diversification. In fact, the Commission is also proposing to make diversification mandatory. According to the Commission:

‘committing the European downstream industrial sectors to supply diversification is required as they can no longer fully rely on Chinese exports to meet their demands for CRMs […] The Commission should have the capacity to incentivise effective diversification measures that large companies should adopt in the event of significant vulnerabilities, and, in case of non-action, make diversification mandatory’.

The EU’s dirigiste model fits within a broader trend that has, in recent years, seen EU institutions shift from a neoliberal, laissez-faire orientation toward a more interventionist approach across a range of economic and industrial sectors. The EU’s mineral diplomacy is marketed as embodying higher environmental and labour standards than China’s, but, to date, it has little room to operationalise them. The same problems that bedevil the US model are magnified here by the need to coordinate among 27 sovereign states, which delays, if not prevents, the launch of public-private partnerships such as those witnessed in the US.

Conclusion

Neither the US’ transactional model, nor the EU’s dirigiste model, stands a realistic chance against China’s incumbent advantage and the unforgiving economics of critical raw materials. While mineral security is often framed as a supply-side problem, the solution lies largely on the demand side and in EU-US cooperation. Despite Washington’s and Brussels’ struggle to get the private sector to diversify supply, some private companies are already willing to pay a security premium to diversify their CRM supply away from China. Expanding their number may simply require the right platforms and incentives.

However late, FORGE may be the right platform to collectively de-risk CRM projects and agree on targeted tariffs to counter non-market practices by dominant suppliers. For this strategy to succeed, however, it requires sustained coordination among all partners, including the US, as well as political leadership to manage inevitable distributional conflicts. Continued US reliance on indiscriminate tariffs and an increasingly confrontational posture toward allied territories, such as Greenland, risks undermining the trust and alignment that effective mineral diplomacy requires.

Together, the EU and the US should first aggregate demand for critical raw materials, thereby enhancing the economic and financial viability of CRM projects. Second, they should agree on a price floor – or minimum price – for offtake agreements, while redistributing costs equitably and sustainably across states, taxpayers and private stakeholders. Third, and relatedly, the EIB and the US International Development Finance Corporation should jointly guarantee such a price floor. Fourth, the EU and the US should agree on a moratorium on tariffs affecting allied countries in CRM sectors, alongside a shared ESG-plus-security certification that suppliers can credibly “sell” politically at home. Finally, they should do all this fast. As China continues to entrench its dominant position, the window of opportunity for such a transatlantic strategy is narrowing. The consequences of the US and EU losing out to China cannot be overstated. In the absence of alternative and reliable CRM supply chains, China can weaponise its control over critical mineral chokepoints, thereby threatening transatlantic defence and civil sectors – including digital, nuclear, green and space industries – and, by extension, US and EU military and economic security.

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