en.Wedoany.com Reported - Investors in critical minerals such as lithium and rare earths are facing a growing number of export controls, production quotas, and mandatory processing requirements. Resource nationalism has shifted from traditional disputes over taxes and royalties to deeper control over mineral resources. Gibson Dunn law firm believes this shift is transforming critical minerals from conventional mining operations into geopolitical chess pieces, introducing legal risks that were nearly absent in previous commodity cycles.
In its analysis report, the firm noted that for lithium and rare earth elements, legal changes are as dramatic as political shifts. Governments increasingly view critical minerals as strategic assets tied to economic competitiveness, technological superiority, and national security, significantly raising risks for producers, investors, and manufacturers.
On the policy front, producing countries are tightening control over mineral resources. In February 2025, the Democratic Republic of the Congo (DRC) imposed a cobalt export ban, later replaced by production quotas, tightening the global cobalt market and causing some companies to declare force majeure. Indonesia's nickel export ban has attracted billions of dollars in downstream investment, serving as a model for other nations. Vietnam has strengthened controls over rare earth mining and banned raw material exports, while Chile continues to prioritize state-owned enterprises for lithium mining.
These measures have deepened the rift between critical mineral producing and consuming countries. The United States has elevated critical minerals to a national security priority, promoting localization through strategic reserves and supply chain alliances. The European Union's Critical Raw Materials Act aims to reduce dependence on external suppliers and expand domestic processing capacity.
In terms of specific legal risks, governments have not fully implemented nationalization but increasingly rely on export controls, license changes, mandatory processing, and production quotas. This could lead investors to file claims under bilateral investment treaties or free trade agreements for indirect expropriation or violations of fair and equitable treatment standards. Gibson Dunn lawyers noted that many existing mining agreements include stabilization clauses to protect investors from regulatory changes, but authorities may justify policy shifts on grounds of national security, public interest, or economic necessity. Export controls may also trigger disputes over force majeure clauses, while companies operating across borders face multiple barriers from export controls, sanctions, and foreign investment review regimes.
Gibson Dunn advises companies to act before disputes arise by reviewing ownership structures, updating contracts, and assessing political risk insurance policies, while also reevaluating processing locations and supply chain designs, arguing that geography may be as important as geology.
This trend is unlikely to reverse in the short term. Governments are aligned in strengthening controls over critical minerals due to their importance for energy transition technologies, artificial intelligence, advanced manufacturing, and national defense. Compared to past tax and royalty disputes, this new wave of resource nationalism involves a broader and more complex range of tools, including export controls, mandatory processing, investment restrictions, and supply chain alliances. For companies operating in lithium, rare earths, and other critical minerals, legal strategy and business strategy are becoming inseparable—those who effectively manage risks may gain an advantage in an increasingly restrictive environment.
This article is compiled by Wedoany. All AI citations must indicate the source as "Wedoany". If there is any infringement or other issues, please notify us promptly, and we will modify or delete it accordingly. Email: news@wedoany.com
