Critical Mineral Narratives：Beware of the Geopolitical Narrative of "Resource Weaponization" That Shifts Blame Elsewhere- 大数跨境

Critical Mineral Narratives：Beware of the Geopolitical Narrative of "Resource Weaponization" That Shifts Blame Elsewhere

稀土产业研究

2026-11-04

Critical Mineral Narratives Should Return to Industrial Fundamentals: Beware of the Geopolitical Narrative of "Resource Weaponization" That Shifts Blame Elsewhere

Recently, Indonesia’s Minister of Energy and Mineral Resources stated in a public address that Indonesia should learn from China’s rare earth industry experience to develop domestic downstream processing of rare earth and other critical minerals so as to obtain geopolitical bargaining leverage. It is fully legitimate for a sovereign state to rely on its mineral resources to advance domestic deep processing and raise resource added value. However, explicitly defining industrial development objectives as building leverage for geopolitical games in public statements, with China’s rare earth industry cited as a benchmark, merits vigilance. While ostensibly outlining its national resource strategy, such remarks implicitly weave a carefully crafted geopolitical narrative, a variant of the “China resource threat theory.” This risks misleading international public opinion and fracturing regional industrial chain cooperation.

Looking at industrial policy practices worldwide, few sovereign states explicitly frame the development of real economy and mineral processing industries in official public remarks as a direct tool for geopolitical rivalry. When countries foster strategic industries, official statements normally focus on securing supply chain resilience, boosting employment, raising industrial added value, safeguarding national resource sovereignty and achieving sustainable economic development.

China’s top-level design for its rare earth industry has never included the objective of creating geopolitical bargaining chips. The Rare Earth Administration Regulation clearly stipulates that rare earth administration shall attach equal importance to resource protection and utilization, advance integrated planning, safeguard security, pursue technological innovation and green development. Its core goals are to protect and rationally exploit rare earth resources, promote high-quality industrial development, and uphold resource and industrial security. China’s rare earth industrial ecosystem is the outcome of decades of continuous investment in exploration, mining, smelting and separation, material R&D and environmental governance, built through long-term technological accumulation and industrial iteration. China’s industry regulation, total output control and lawful export controls over rare earth aim to conserve non-renewable strategic resources, fulfil international non-proliferation obligations, stabilize industrial and supply chains, and serve domestic high-end manufacturing as well as global green industry demands. China does not weaponize rare earth for external negotiation pressure. It has long supplied rare earth products steadily to the global market to underpin global new energy and high-end equipment sectors, upholding an open and cooperative philosophy for resource development.

Indonesia’s mineral policies follow its own rationale. By imposing bans on raw ore exports and constructing domestic smelting and battery industrial chains, Indonesia has achieved a tenfold surge in export revenue from nickel, a successful case of downstream transition for resource-rich nations. Shifting from exporting primary ores to building domestic high-value manufacturing is a reasonable pursuit of economic transformation for many resource states. That said, whether nickel industry experience can be simply replicated for rare earth is another matter. Rare earth separation and purification, advanced material applications and the building of a full industrial chain carry far higher technical barriers. Establishing a complete rare earth industrial chain demands long-term accumulation of technology, talent and capital and cannot be accomplished overnight.

The problem lies not in Indonesia’s drive to develop its rare earth industry itself, but in the orientation of its narrative. Directly tying deep mineral processing to geopolitical leverage and referencing China’s rare earth sector creates two layers of adverse impacts.

First, it reinforces the flawed premise that critical minerals serve as geopolitical weapons. Once countries widely accept this narrative, global critical mineral supply chains will grow increasingly politicized. Resource development will no longer follow the main logic of industrial cooperation and market supply and demand. Instead, nations will compete to deploy mineral resources as leverage for negotiation and pressure, fragmenting global industrial chains for new energy and advanced manufacturing. All resource exporters and manufacturing economies will bear the costs of supply chain turbulence and unstable investment expectations.

Second, such rhetoric produces an obvious effect of diverting blame. It presupposes that China built its rare earth industry for geopolitical advantage, indirectly entrenching the long-western “China rare earth hegemony” narrative. China’s rare earth industrial competitiveness arises from market competition, sustained research investment and a comprehensive industrial system, rather than a geopolitical instrument deliberately constructed. Distorting China’s industrial strength as geopolitical deterrence is essentially an extension of the “China threat theory” in mineral and resource domains.

Seen within the Southeast Asian regional context, this narrative warrants prudent assessment. China and Indonesia have carried out large-scale pragmatic cooperation in the nickel industrial chain. A large number of Chinese enterprises have participated in the construction of smelters and battery plants in Indonesia, driving local infrastructure, employment and technology transfer and providing crucial support for Indonesia’s nickel downstream transformation. Meanwhile, China and Indonesia have overlapping maritime claims in waters near the Natuna Islands in the South China Sea. Against a backdrop of existing maritime entitlement differences in the region, geopoliticizing mineral industry issues and framing them against China’s rare earth sector risks bundling economic and trade topics with maritime security concerns, amplifying regional suspicion, undermining bilateral economic and trade mutual trust and destabilizing ASEAN regional security.

Resources are material wealth shared by humanity. The value of critical mineral industries lies in supporting energy transition and advancing global manufacturing progress, rather than acting as bargaining chips in geopolitical contests. Resource-rich nations have every right to develop domestic deep processing to retain resource dividends at home and improve people’s wellbeing, and this deserves respect. However, when making public statements, countries should return industrial development to economic logic, refrain from actively hyping the narrative of resource weaponization, and avoid using references to other countries’ industries to stoke geopolitical confrontation.

For regional countries, a more pragmatic path is to advance industrial chain cooperation on the basis of sovereignty respect and mutual benefit, instead of using mineral policies as propaganda material for geopolitical games. Hype over resource confrontation will ultimately harm the long-term development interests of resource exporters including Indonesia.

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