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Western governments are pouring tens of billions of dollars into critical minerals projects as they attempt to reduce dependence on China for materials essential to clean energy, defence technology and advanced manufacturing.

But industry executives, analysts and investors are increasingly warning that poorly coordinated state-backed investment could create severe oversupply problems similar to past commodity booms that ended in market crashes.

The concerns come as countries including the United States, Australia, European Union and Japan accelerate efforts to build strategic reserves and expand production of rare earths and other critical minerals.

Governments Ramp Up Critical Minerals Spending

The United States has committed more than $20 billion toward critical minerals development through multiple financing programmes, including Project Vault, a strategic stockpiling initiative worth around $10 billion.

Australia has also allocated at least A$13 billion to support critical minerals projects and reserves through several government-backed programmes.

These investments are designed to secure supplies of metals used in electric vehicles, semiconductors, renewable energy systems, aerospace equipment and military technologies.

Particular attention has focused on rare earth elements, a group of 17 metals essential for producing powerful magnets used in advanced defence systems and high-tech manufacturing.

Although the global rare earths market was valued at only about $6.4 billion in 2024, combined Western financial commitments to rare earth projects have already exceeded that figure.

Fears Grow Over Potential Oversupply

Mining executives and analysts warn that aggressive subsidies and overlapping national strategies could eventually flood global markets with excess supply.

Brett Beatty of Resource Capital Funds said the biggest danger lies in governments pursuing independent strategies without coordination.

According to Beatty, simultaneous efforts to rapidly increase production could create volumes far beyond global demand, ultimately crushing prices and undermining the very industries governments are trying to build.

Analysts drew comparisons to historical commodity gluts, including Europe’s “butter mountains” of the 1980s, Russian aluminium oversupply and Australia’s wool crisis, where subsidies and state support distorted markets and triggered sharp price collapses.

Rare Earth Market Could Face Surplus Pressures

Consultancy Project Blue warned that several rare earth markets are already on track to move into surplus over the coming years due to expanding state-backed production.

However, analyst David Merriman said governments may still be able to avoid major imbalances if they carefully adjust subsidies, stockpiling programmes and guaranteed purchasing arrangements.

Industry leaders say current stockpiles remain relatively small, limiting immediate risks of market disruption.

Lynas Rare Earths CEO Amanda Lacaze recently said rare earth stockpiles around the world remain modest and are not yet large enough to destabilise markets.

Australian Resources Minister Madeleine King also argued that today’s critical minerals policies differ significantly from past commodity intervention failures because they are more targeted and linked to long-term industrial supply chains.

Global Coordination Emerging Among Western Allies

Concerns about duplication and oversupply are pushing Western governments toward greater policy coordination.

The Group of Seven is reportedly discussing the creation of a permanent secretariat focused on coordinating critical mineral strategies and ensuring continuity between rotating national presidencies.

Industry experts say such coordination could help prevent destructive competition between allied nations while supporting more stable investment planning.

Lessons From Congo and Indonesia

Governments outside the West have already experimented with aggressive intervention in mineral markets.

The Democratic Republic of the Congo boosted cobalt prices by introducing export quotas and stockpiling measures designed to increase mining revenues.

While the policy initially lifted prices, analysts warn prolonged restrictions could encourage manufacturers to seek alternative materials or suppliers.

Similarly, Indonesia dramatically expanded its dominance in nickel production after banning exports of raw nickel ore in 2020 to force domestic processing investment.

Indonesia’s production surged within just a few years, but authorities have since struggled with falling prices and oversupply, forcing Jakarta to tighten mining quotas and centralise export controls.

These examples highlight the difficulty governments face in balancing national industrial ambitions with long-term market stability.

Analysis

The global race for critical minerals is increasingly becoming a strategic contest shaped as much by geopolitics as by economics.

Western governments view supply chain independence as essential after years of relying heavily on China for processing capacity and rare earth production. The push is not simply about commercial competition — it is tied directly to national security, technological leadership and energy transition goals.

However, the very scale of state intervention now unfolding raises the risk of creating distorted markets. If multiple governments simultaneously subsidise production, guarantee prices and build stockpiles without coordination, supply could rapidly outpace actual industrial demand.

That scenario would likely trigger sharp price declines, weaken private investment and potentially create another boom-and-bust cycle in the mining sector.

At the same time, the market dynamics of critical minerals differ from traditional commodities. Many of these materials are essential for emerging technologies, and demand is expected to rise significantly over the next two decades as countries expand renewable energy infrastructure, battery production and semiconductor manufacturing.

This means governments are not only competing to secure supply today but also positioning themselves for future industrial dominance.

Another key challenge is that refining and processing capabilities remain heavily concentrated in China. Even if Western countries succeed in expanding mining output, they may still depend on Chinese infrastructure unless domestic processing networks are developed alongside extraction projects.

The growing emphasis on “friend-shoring” and allied supply chains reflects an attempt to address this vulnerability.

Industry experts also point to a more sustainable model emerging through byproduct extraction. Instead of building entirely new mines based purely on high prices, companies are increasingly looking to recover critical minerals from existing industrial operations, reducing the risk of uncontrolled supply growth.

Projects involving Alcoa, Sojitz and Trafigura illustrate how governments and corporations are experimenting with lower-risk approaches to expanding supply.

Ultimately, the success of Western critical minerals strategies may depend less on how much money governments spend and more on whether they can coordinate policies, manage supply carefully and build integrated processing ecosystems capable of competing with China over the long term.

With information from Reuters.

May 14, 2026, 2:13 PM ETMobix Labs, Inc. (MOBX) Stock, MOBXW StockORCL, CSCO, NVDA, TSM, UUUU, ANET, LYSCF, AVGO, UUUU.WS, SP500, MP, USAR, NVDA:CA, CSCO:CA, ORCL:CA, ANET:CABy: Sara Sethiya, SA News Editor

HARARE, Zimbabwe — Zambia is accusing the United States of tying a $2-billion deal for critical health assistance to access to the southern African nation’s rich mineral assets, and calling the outgoing U.S. ambassador’s allegations of corruption “mischievous” and “undiplomatic.”

The comments by Zambia’s foreign affairs minister, Mulambo Haimbe, on Monday brought into the open simmering tensions over President Trump’s “America First” strategy, which is reshaping aid to Africa into transactional agreements.

Some African leaders and health experts have criticized the new U.S. stance and its demands for sensitive health data in exchange for badly needed support for health systems strained by the Trump administration’s dismantling of foreign aid. Some say they would not receive access to health innovations like vaccines in return.

The U.S. is also seeking to challenge China, a dominant player in Zambia and much of Africa, whose minerals are critical to the green energy transition, including inputs for solar panels, electric vehicle batteries and energy storage systems.

Zambia says talks stalled over data-sharing demands

In a statement, Haimbe described the accusations of Zambian graft and negotiation inertia by outgoing U.S. ambassador Michael Gonzales as “mischievous” and “deeply regrettable, undiplomatic and inconsistent with the spirit of mutual respect.”

Haimbe also accused the U.S. of tying access to critical minerals to the conclusion of the health deal, which Gonzales earlier dismissed as “alarmist allegations” that he called “disgusting” and “absolutely and patently false.”

Negotiations have continued for months to conclude the deal, one of dozens the Trump administration is pursuing in some of the world’s most aid-dependent countries.

Gonzales in late April said Zambian leaders had “abdicated their responsibilities, letting the United States pay for healthcare while officials diverted government funds to their own pockets.” He said Zambian authorities had “ignored” U.S. overtures to conclude a new deal.

But Haimbe said negotiations had stalled over “unacceptable” data-sharing demands “in violation of our citizens’ right to privacy” and “the insistence on preferential treatment of U.S companies over Zambia’s critical minerals.”

Zambia “takes the view, first and foremost, that Zambians must have a say on how her critical minerals are used, and second that no one strategic partner is to be treated preferentially to others,” he said.

The U.S. Embassy did not immediately respond to a request for comment.

U.S. says its approach aims to reduce donor dependency

The U.S. approach replaces decades of engagement anchored in the now-dismantled United States Agency for International Development and the President’s Emergency Plan for AIDS Relief, or PEPFAR.

In their place, U.S. officials are negotiating country-by-country agreements that recast aid as a transaction, tying funding to conditions including commercial provisions, domestic financing commitments, disease surveillance, pathogen sharing and even religion.

Since late last year, the U.S. has signed agreements with about 30 countries, many in Africa. Washington says the approach is meant to reduce donor dependency, promote local ownership and safeguard American interests, including against an aggressive China that dominates trade in Africa but contributes less aid.

There has been pushback.

Ghana last week said it had rejected a proposed deal over provisions granting broad access to sensitive health data without safeguards. Zimbabwe walked away from a $367-million package over similar concerns. In Kenya, a $2.5- billion agreement signed in December has been put on hold after a court challenge arguing it violates data protection laws.

In Lesotho, draft U.S. proposals sought 25 years of access to health data and biological samples before local officials secured a shorter five-year deal.

Health experts say data would largely flow one way

Critics say the data-sharing demands tilt toward U.S. interests and warn the information-sharing would largely go in just one direction: toward Washington.

The new agreements aim to ensure the flow of disease surveillance data and biological samples, but through bilateral channels, after the U.S withdrew from the World Health Organization in January, said Asia Russell, executive director of advocacy group Health GAP.

Countries currently report disease outbreaks primarily through the WHO, which coordinates responses and is negotiating new frameworks on pathogen-sharing and equitable access to vaccines.

The U.S., now outside those talks, is pursuing direct access instead.

“[The U.S. wants] to understand what’s actually happening,” said Jen Kates, a senior vice president at the Washington-based nonprofit KFF. “But they are trying to do it in a very different way.”

Health advocates say this risks creating a parallel global health system. In Zimbabwe, a government spokesperson in February said the government terminated negotiations because the U.S. was not offering a “corresponding guarantee of access to any medical innovations — such as vaccines, diagnostics or treatments — that might result from that shared data.”

“That raises serious concerns about who benefits,” said Atilla Kisla of the Southern Africa Litigation Center.

Advocates point to the harsh experience of the COVID-19 pandemic, when African countries contributed data and samples but were largely last in line for vaccines.

Experts warn against health as a ‘bargaining chip’

The agreements with the U.S. are drawing criticism for closed-door negotiations and limited public scrutiny.

“Secrecy is at the center of this. That puts accountability for results at risk,” said Health GAP’s Russell. “It’s impossible to evaluate these deals properly without seeing the full terms. Part of what made PEPFAR successful was transparency. Now that’s been taken away.”

The deals also come with tighter financial conditions. Many include reduced funding compared to previous levels of U.S. assistance, while requiring countries to increase domestic health spending, with aid at risk if targets are not met.

“These are going to be very heavy lifts,” said KFF’s Kates. “Countries are already under strain.”

Critics say some agreements also advance U.S. commercial and political interests, blurring the line between aid and transactional diplomacy.

“When health becomes a bargaining chip, everyone becomes less safe,” Russell warned.

Mutsaka and Imray write for the Associated Press. Keketso Phakela in Maseru, Lesotho, contributed to this report.

1 of 3 | Former New York Mayor Rudy Giuliani is interviewed on the floor of the 2024 Republican National Convention at Fiserv Forum in Milwaukee, Wis., on July 16, 2024. Giuliani has been hospitalized in critical condition, his spokesman said Sunday. File Photo by Tannen Maury/UPI | License Photo

May 3 (UPI) — Former New York Mayor Rudy Giuliani has been hospitalized and is in critical condition, his spokesman said Sunday.

Giuliani “is currently in the hospital, where he remains in critical but stable condition,” Ted Goodman said in a statement.

“Mayor Giuliani is a fighter who has faced every challenge in his life with unwavering strength, and he’s fighting with that same strength now. We do ask that you join us in prayer for America’s Mayor Rudy Giuliani.”

Goodman did not say why Giuliani, 81, was hospitalized.

The former mayor’s condition was also noted by President Donald Trump, who wrote on his Truth Social platform, “True Warrior, and the Best Mayor in the History of New York City, BY FAR.”

Trump also took the occasion to praise his political ally and former lawyer, who served as one of the key figures in the president’s baseless campaign attacking the results of his 2020 election loss to Joe Biden as “rigged.”

“They cheated on the Elections, fabricated hundreds of stories, did anything possible to destroy our Nation, and now, look at Rudy. So sad!” Trump wrote.

Trump in November pardoned Giuliani and 76 others tied to his efforts to overturn the 2020 election, including participation in what has become known as the fake electors scheme. The strategy involved the creation of false slates of pro-Trump electors in every battleground state that he lost to Biden, including Georgia.

The former mayor’s championing of Trump’s claims also resulted in his own financial troubles.

In September, he reached a confidential settlement with Dominion Voting Systems, which had filed a $1.3 billion defamation lawsuit against him for his allegations the company rigged the 2020 presidential election.

Giuliani was previously disbarred as a lawyer in New York and Washington, D.C.

April 25 (UPI) — Two police officers were wounded in a shooting Saturday at a Chicago hospital, leaving one of them in critical condition, officials said.

The two officers were shot at Endeavor Health Swedish Hospital on the north side of Chicago at around 11 a.m., the hospital’s parent company said on Facebook. Endeavor said the shooter was brought to the Emergency Department for treatment around 9 a.m. CDT Saturday in the custody of the officers. He was wanded and escorted by the officers at all times, Endeavor said. At around 11 a.m. he shot the officers and left the building. He was caught and is in police custody.

Law enforcement sources told the Chicago Sun Times that the shooter disarmed one of the officers before opening fire.

No patients or hospital staff were injured.

“The safety of our patients and team members remains our top priority,” Endeavor said. “We are cooperating with law enforcement during their investigation and our deepest compassion remains with the officers and their families.”

The condition of the other officer isn’t clear.

The hospital was locked down Saturday afternoon, but there is no ongoing threat.