Doug Stokes is Professor in International Security at the University of Exeter
There was plenty of discussion surrounding foreign policy during the leadership election. However, little has been made of our supply, or lack thereof, of critical minerals. The Conservative Party should not ignore this vital issue.
The race to secure critical minerals and rare earths has intensified as countries worldwide push toward their net-zero emissions targets. These materials are essential for the transition to clean energy and are used in everything from wind turbines and electric vehicle batteries to solar panels and advanced electronics. They are also crucial in advanced military technology.
It is estimated that by 2040, the world will need four times more critical minerals than today. Given the rapidly escalating demand, the International Energy Agency has stressed that the global clean energy transition could face severe bottlenecks due to the need for more reliable access to these minerals.
China dominates the global supply of critical minerals and rare earths, controlling over 60 per cent of global production. However, with increasing concerns over supply chain security and geopolitical dependencies, Western countries are actively seeking alternative sources.
Mongolia holds vast deposits of critical minerals. The U.S. Geological Survey has estimated that Mongolia’s rare earth reserves could be as high as 31 million tons, accounting for 16.7 per cent of the world’s total reserves, second only to China. This abundance has placed Mongolia at the forefront of Western efforts to diversify its mineral supply chains and reduce reliance on China.
Mongolia has actively sought to build stronger ties with Western countries, particularly the United States and the United Kingdom. Luvsannamsrain Oyun-Erdene, the Mongolian Prime Minister, has referred to the U.S. as Mongolia’s “third neighbour,” alongside Russia and China. His government has pursued policies to attract Western investment and expertise to develop Mongolia’s mineral resources.
The UK has also stepped up its engagement with Mongolia. In October 2023, Nusrat Ghani, then the Industry Minister, visited Mongolia to strengthen bilateral trade ties, especially in the critical minerals sector. This historic visit marked the 60th anniversary of UK-Mongolia diplomatic relations and underscored the UK’s interest in securing a steady supply of rare earth elements.
Amid this geopolitical repositioning, Vladimir Putin visited Mongolia in September 2024, raising eyebrows internationally. While the official purpose of Putin’s visit was to commemorate the 85th anniversary of the Battle of Khalkhin Gol, the timing suggests a more complex geopolitical calculus.
Mongolia’s growing relationships with Western powers may have motivated Putin to reassert Russia’s regional influence. Russia still holds a 50 per cent stake in Mongolia’s railways, a vital artery for transporting minerals across the region.
Meanwhile, China remains Mongolia’s largest trading partner, accounting for more than 90 per cent of the country’s exports, mainly in coal and copper. On Wednesday, China’s Premier Li Qiang proposed closer three-way ties with Russia and Mongolia at a meeting on the sidelines of a Shanghai Cooperation Organisation summit.
Given this dependence, Mongolia walks a diplomatic tightrope. Despite being an ICC member, Mongolia did not enforce the warrant for Putin’s arrest, reflecting its delicate balancing act between appeasing its powerful neighbours and pursuing closer ties with the West.
The new scramble for REEs and critical minerals in Central Asia is fast becoming a new “Great Game” of global geopolitics, with the war in Ukraine deepening the divide between the emergent China-Russia axis and Western powers.
For the UK, the ongoing conflict in Ukraine and the growing alliance between Russia and China have influenced its foreign policy. Still, it is unclear how the Starmer government’s new ‘progressive realism’ will view the new geopolitics of critical minerals.
David Lammy’s visit to Beijing may well further consolidate what seems to be a Starmer government ‘reset’ in the UK – China relations, with the attempted repeal of the Conservative Academic Freedom bill to protect Chinese student revenues and its gifting of the Chagos Islands to China-friendly Mauritius early signs of the direction of travel.
As the demand for critical minerals continues to soar and Starmer doubles down on net zero, critical mineral-rich countries like Mongolia will become increasingly important. In this new era of global competition, critical minerals are no longer just about economics—they are central to the geopolitics of the 21st century.
