Nick Dearden is the director of Global Justice Now.
The US push for nations to join a club that would coordinate the trade of critical minerals outside China signals a giant shift in Washington’s vision for how to govern the global economy But it will, unfortunately, also hinder the clean energy transition.
Critical minerals such as lithium, nickel, copper and rare earths are needed to manufacture clean energy technologies such as solar panels, wind turbines and batteries on which the transition from fossil fuels to clean energy depends.
But these minerals also have applications for a wide range of advanced technologies, not least military equipment and digital infrastructure. In recent years, AI deployment and the build out of data centres have become the primary political justification for mineral extraction.
No US official mentioned clean energy technologies as they promoted the new minerals club in Washington last month. Instead, the trading bloc aims to break China’s dominance over mineral supply chains and ensure US access to the resources it needs for digital and military sectors.
Analysis by Global Justice Now found that almost one in five of the 33 minerals that the UK identified as critical in 2024 are not needed to achieve the International Energy Agency’s decarbonisation pathways. A further 15 play only a very small role and only seven require significant production increases for the clean energy transition.
Prioritise minerals for the energy transition
The urgency of addressing climate change means we must prioritise the use of minerals to rapidly and equitably wean the global economy off coal, oil and gas while reducing resource overconsumption in the Global North. The US approach could make this prioritisation a lot harder.
For Washington, this isn’t about addressing climate change, but America’s ever deepening rivalry with China, a renewable energy superpower. In contrast, Donald Trump has called climate change “a hoax” and overseen unprecedented climate deregulation in favour of fossil fuels.
The minerals trading bloc risks diverting mineral resources towards carbon-intensive military and technology build-up in the US, which is directly at odds with the need to use these resources to manufacture clean energy technologies.
What’s more, for the green transition to be just, fair and equitable, resource-rich governments must be able to refine and add value to their resources, creating jobs and economic development in the process. But Trump’s trading bloc is intended to tell “partner” countries what role they should play in the global mineral supply chains to best serve US interests.
Serving US interests rather than clean energy
Countries with the smallest and least developed economies stand to lose out.
More than a dozen countries have signed bilateral deals with the Trump administration. The terms of the deals appear to get better the richer a country is.
At the poorer end is the deal with DRC – an outright piece of imperialism with one-sided obligations that override the country’s mineral sovereignty by giving the US first dibs on a range of strategic mining sites and the energy needed to power these sites.
‘America needs you’: US seeks trade alliance to break China’s critical mineral dominance
In the middle, Malaysia committed to facilitate American involvement in its mineral sector and refrain from banning or imposing quotas on exports of raw minerals to the US. This risks restricting the development of Malaysia’s refining capacities, making value addition harder.
At the top end is the UK, which has signed a deal that includes a commitment to streamline mineral permitting, but appears more focused on facilitating financial services to members of the trading bloc.
Wherever countries sit in the pecking order, the agreements signed with the US limit governments’ strategic sovereignty over their resources and stifle their ability to create a more sustainable economy which meets people’s needs.
Tools for a way forward
There is some hope, however. Trump’s mineral trading bloc would operate with profoundly different rules than the neoliberal trade deals, which we have become used to.
Some of its components – like price floors and state ownership – have not been seen in trade deals for a long time. In the right hands, these tools could help governments plan, coordinate and prioritise a globally just green transition and break away from the ‘market knows best’ logic which has long locked poorer countries into low-value exports of raw materials.
If governments work together, outside the coercive US trade bloc, to adopt some of these tools and policies, they might be able to draw local benefits from their mineral wealth and build a genuinely fair and equitable trade in transition minerals.
