Summary 

This project examines how the United States and China are securing global supply chains for critical minerals essential to the electric vehicle (EV) industry, using two case studies: nickel in Indonesia and cobalt in the Democratic Republic of the Congo (DRC). Indonesia produces 59% of the world’s nickel, while the DRC produces 70% of the world’s cobalt. Findings from the project indicate that China dominates both the mining sectors and the midstream and downstream processing stages, whereas the United States is either behind or attempting to catch up. Despite China’s stronger position, both countries are vulnerable to supply chain disruptions due to the high concentration of production in these two countries. 

The project also investigates the environmental and socio-economic impacts of critical mineral production in developing countries. It assesses whether investments by China and the United States generate tangible local benefits, such as technological learning, employment opportunities, and advancement along the economic value chain. The results suggest that while these investments secure supply chains for major powers, local socio-economic benefits remain limited, highlighting the need for a more inclusive approach to resource development. 

Finally, the project explores policy options to improve the environmental and developmental outcomes of critical mineral extraction in developing countries. It identifies how incentives could be restructured so that foreign investment not only secures critical mineral supply chains but also supports sustainable local development. The project provides actionable insights for policymakers on balancing geopolitical interests with equitable economic and environmental benefits in mineral-rich developing countries. 

Objectives 

• Analyze the strategies of the United States and China in securing global supply chains for critical minerals in the EV industry. 

• Examine China’s dominance in nickel production in Indonesia and cobalt production in the DRC, and the relative position of the United States. 

• Assess the environmental and socio-economic impacts of foreign investments in critical mineral extraction in developing countries. 

• Evaluate whether local benefits, such as technological learning, employment, and value chain development, are emerging from critical mineral production. 

• Provide policy recommendations for restructuring incentives to achieve more positive environmental and developmental outcomes in mineral-producing countries.