How the Iran war set off a global scramble for strategic metals

THE war in the Middle East is accelerating a long-simmering global struggle over critical minerals. The price of tungsten, a metal used in armour-piercing gear and missile counterweights, has surged, with its European benchmark hitting a record US$2,250 per tonne, up 557 per cent over the past year. Fuelled by wartime demand, the metal's gains have far outpaced those of gold and silver. Other materials - including germanium used in thermal imaging systems, antimony needed for infrared detector chips, and the strategic metals tantalum and niobium - have also jumped. The concept of "war metals" has become a market focus as the conflict between Iran and the US and Israel goes on. The scramble comes as long-term demand is set to surge. The International Energy Agency projected that by 2040 global lithium demand could increase fivefold, while demand for graphite and nickel could double. Demand for cobalt and rare earth elements is projected to rise 50 per cent to 60 per cent, and copper demand is expected to grow about 30 per cent. The US has been stockpiling critical minerals. In October 2025, the Department of Defense sought to procure as much as US$1 billion in key minerals, including up to US$500 million in cobalt, US$245 million in antimony, US$100 million in tantalum and about US$45 million in scandium as part of a global reserve initiative. High-intensity warfare has rapidly depleted inventories of rare metals among combatants. A notable feature of the conflict is the accelerated integration of artificial intelligence and drones into combat systems, boosting demand for tungsten and rare earths. Shifting geopolitical dynamics mean critical minerals are no longer tied solely to the energy transition. Demand from military production and restocking is adding to pressure on supply, prompting countries to strengthen reserves. The war underscores that energy security - including access to critical minerals - is closely tied to national defence. "Ensuring a safe and stable supply of key metals is no longer just an economic issue; it directly relates to a country's core competitiveness and strategic autonomy," said Zhao Han, an analyst at Argus. A January 2026 report by the Chinese Academy of Social Sciences said competition over critical minerals is expanding beyond mining rights to include transport security, interdiction risks on the high seas and the restructuring of global commodity pricing systems. Control over supply chains, rather than sheer capital, is becoming a key measure of national strength and industrial leadership. Shortfalls in tungsten, antimony, gallium and germanium - key components in military hardware - are emerging as a strategic vulnerability for the US military in a prolonged conflict with Iran, according to a Mar 4 report by S&P Global Energy. Peter Clausi of the Critical Minerals Institute said that without access to tungsten and antimony, and with constrained supplies of germanium and gallium, the US would struggle to manufacture new weapons. On Feb 27, a day before strikes on Iran, the US government asked mining companies how quickly tungsten and 12 other metals could be produced domestically, Reuters reported. Carlos Pascual, senior vice-president for global energy at S&P Global, said that as the global order is reshaped, uncertainty is driving supply-chain diversification to the forefront of energy and national security agendas. "An overriding sense of insecurity is taking hold," he said. "Countries increasingly see supply-chain diversification as a global risk issue - a reality shaping business, technology and economic decisions." He added that a key challenge is building cooperative mechanisms that support diversification while avoiding trade conflicts. Washington has accelerated efforts to secure supply. On Dec 4, 2025, it released a National Security Strategy proposing cooperation with partners to build reliable mineral supply chains. On Feb 4, the US convened its first ministerial meeting on critical minerals with representatives from 54 countries and regions. The US has since launched a new alliance, the Forum for Resource Geostrategic Cooperation, unveiled a US$12 billion Project Vault, and signed multiple agreements to secure overseas resources, including in the Democratic Republic of Congo (DRC). A key driver of Washington's strategy is to reduce its dependence on supply chains dominated by China. China holds a commanding position in the global critical minerals supply chain, especially in the midstream processing and refining stages, as well as manufacturing. According to data from Argus, China's smelters handle 60 to 70 per cent of the world's antimony, 80 per cent of its tungsten, and over 90 per cent of its gallium. The country also refines 70-80 per cent of global cobalt, 65 to 70 per cent of its lithium, and about 90 per cent of rare earths. "China has a systemic influence on the global critical metals supply chain," said analyst Zhao at Argus. Bo Shaochuan, an independent director at Zijin Mining Group, noted that China is unique in being both a massive consumer and a huge supplier of many minerals, giving it the world's most complete domestic supply chain for critical minerals. Maria Shagina, a research fellow at the International Institute for Strategic Studies (IISS), noted in a January report that the flurry of US diplomatic agreements for upstream investment and processing cooperation reflects US efforts to reduce its dependence on supply chains still dominated by China. Mining projects take years to develop and are vulnerable to price swings, slowing efforts to build domestic supply chains. The Trump administration has adopted a more interventionist approach. The government is using an "investment for equity" model, taking stakes in companies and offering procurement contracts to accelerate development. In the past six months, the US has worked with the private sector to commit more than US$30 billion to projects, US Vice-President JD Vance said. However, most projects are unlikely to begin production before 2028, offering little near-term relief. To bridge the gap, the US has launched Project Vault, a strategic reserve backed by US$12 billion in funding to stockpile critical minerals. The reserve will include all 60 minerals listed on the 2025 US Geological Survey's critical minerals list. While pushing to build domestic supply, Washington is also stepping up efforts to secure resources overseas, particularly in Africa. In December 2025, the DRC, a major cobalt supplier, signed a strategic partnership with the US focused on exchanging access to critical minerals for security and military support. A US-backed consortium, Orion Mineral Alliance, is in talks to acquire a 40 per cent stake in two major copper-cobalt assets in the DRC from Glencore, a move that would deepen American influence. The US International Development Finance Corporation is also backing a joint venture between trading firm Mercuria Energy Group and state-owned miner Gécamines, giving US buyers priority access to output. The shift has implications for China, as Chinese-backed firms control nearly two-thirds of the DRC's cobalt production. Under the new agreement, the DRC must notify Washington of changes to cobalt quotas or export restrictions, giving the US additional leverage. Li Xiaofeng, a senior partner at Dacheng Law Offices, said the growing importance of critical minerals has fuelled a resurgence of resource nationalism over the past decade, particularly in lithium, cobalt, nickel and copper across Africa, Latin America and the Asia-Pacific. "Resource-rich countries will seek to maximize gains from competition among major powers, though they can also be caught in the crossfire," said Bo Shaochuan, an independent director at Zijin Mining Group. As land-based resources become geopolitical flashpoints, the US is turning its attention to a new, largely unregulated frontier: the deep sea. According to a UBS report, deep-sea mineral resources are valued at a staggering US$177 trillion, with metal resources alone accounting for US$81 trillion. These riches primarily exist in four forms: polymetallic nodules, cobalt-rich ferromanganese crusts, polymetallic sulphides, and deep-sea rare earths. The first two hold the highest concentrations and value. However, the deep sea remains a challenging and expensive frontier. The industry is still in its infancy, with no commercial-scale projects yet underway. "Compared to terrestrial mining, deep-sea mining currently has huge initial investment costs, long payback periods, and high operational, maintenance and processing costs," said Sha Fei, an associate professor at the Ocean University of China. He added that beyond rare earths, the first metals likely to become economically viable to extract from the seabed are nickel, copper, cobalt and manganese. Despite the hurdles, the long-term economics are compelling. UBS projects that technological advances and operational efficiencies will drive down costs, potentially reaching parity with land-based mining by 2033. The bank forecasts that capital expenditure on deep-sea mining equipment will explode from US$150 billion in the next decade to US$1.5 trillion between 2036 and 2050. Over the next quarter-century, some 320 deep-sea projects could be launched, each requiring a capital outlay of around US$10 billion. It is this future potential that has sparked a new geopolitical race. In early 2026, the US dramatically simplified its application process for deep-sea mining companies. The most advanced US effort is by The Metals Company (TMC), which aims to begin small-scale test mining in the Pacific's Clarion-Clipperton Zone (CCZ) in late 2027, potentially years before the International Seabed Authority (ISA) issues its first official mining contract in 2030. This arena is not without competitors. According to Sha, nations like China, Japan, South Korea and Canada are also world leaders in deep-sea mining and collection technologies. China and Japan have already conducted their own successful deep-sea mining system tests. The US push, however, threatens to upend the international order. As a non-signatory to the UN Convention on the Law of the Sea (UNCLOS), the US operates outside the ISA's regulatory framework. This has stoked fears that Washington will proceed with unilateral extraction, prompting a "Wild West" scenario on the ocean floor. The ISA is now scrambling to get a mining code adopted by 2027. "As major powers send clear signals for the development of deep-sea mining, the development process in this field could accelerate rapidly from 2027," the UBS report stated. CAIXIN GLOBAL