Editorial Team The latest Chatham House Resource Nationalism Index confirms what we’re seeing on the ground: 2025 was a huge year for resource nationalism, with over 60 countries bringing in new policies or tightening old ones, a 30% jump from last year. This isn’t some minor trend. This turn by resource-rich nations is completely upending the commodity trade, throwing new wrenches into supply chains while opening up some surprising doors for those paying attention.
Key Takeaways
- Resource nationalism surged in 2025, with 60+ countries tightening their grip, a 30% policy increase.
- Royalty rates on critical minerals (lithium, cobalt) are up 15% since 2023, hiking production costs across the board.
- In Africa and Latin America, state-owned companies are grabbing over 70% of new concessions for strategic metals.
- Long-term contracts are now being rewritten to force local processing, which changes the entire value chain.
- To survive, you’ve got to diversify your sources and start building out your own domestic processing.
“If neighbouring Norway has amassed a $2.4tn war chest from the same North Sea, where exactly did the UK's sovereign wealth fund go?”
The 15% Surge in Critical Mineral Royalties
The most direct hit from this wave of resource nationalism is the jump in extraction costs. We’ve seen the average royalty rate on criticals like lithium, cobalt, and rare earths climb about 15% since 2023, and that’s a serious hike that sends ripples down the whole supply chain. Just look at Chile: its 2024 mining royalty law, as Reuters covered, could push effective tax rates for big miners to 46% when prices are high. That’s a direct pass-through cost for anyone making EV batteries, wind turbines, or high-end electronics.
In my experience analyzing these markets, producers try to eat these costs for a quarter or two, but they always get passed on. You’re seeing it now in the price of finished goods, and it’s the end consumer who pays. The simple view is that higher costs just scare off investment, but that’s not what’s happening. Companies aren’t walking away from lithium or cobalt. Instead, they’re re-evaluating their entire strategy, cutting new deals with state-owned players or even pursuing expensive projects to extract lower-grade deposits in politically safer countries. The math changes completely, but the world’s hunger for these materials doesn’t.
State Control: Over 70% of New Strategic Metal Concessions
Another huge piece of this is the move toward state control. In 2025, governments handed over 70% of new mining concessions for strategic metals in places like Africa and Latin America to their own state-owned enterprises (SOEs) or to JVs where the state has a heavy hand. This isn’t random. It’s a calculated play by governments to keep more of the money from their own resources. Indonesia is the textbook case with its nickel industry, where they’ve aggressively forced domestic processing and state participation, successfully building up their smelting capacity but creating major headaches for their trade partners.
This completely changes the game for the private multinationals that used to run the show. They’re now boxed in. Their choice is either to partner up with an SOE, often taking a minority stake and giving up operational control, or to pivot to niche resources that the government doesn’t care about yet. For some, this can work out. Host countries get to keep more revenue and (in theory) have more say over environmental and labor rules. For the rest of the world, though, it injects a massive dose of geopolitical risk into the system, because a government’s strategic goals, not just market demand, can suddenly shut off a supply spigot. The idea that free markets still control commodity flows is dead when governments are this involved.
The Rise of Local Processing Mandates in Long-Term Contracts
Look closer at the long-term supply contracts and you’ll see another tactic: local processing mandates. It’s a subtle but powerful shift. Instead of just digging up raw materials and shipping them out, countries are writing it into the contract that a chunk of that material must be processed locally. We’re seeing this in deals for bauxite out of Guinea, for instance, where new contracts often demand that companies also build local alumina refineries. The goal is straightforward: create local jobs, build a domestic industrial base, and keep a bigger piece of the final product’s value at home.
For supply chain managers, this is a double-edged sword. Yes, it could spread processing capacity around the globe and make us less dependent on a few refining chokepoints. But it also means sinking huge amounts of capital into new plants in places that might not have a reliable power grid, let alone the skilled workers and logistics to run them. That’s a recipe for delays and higher costs. I’ve personally seen companies get burned trying to meet these mandates, ending up back at the negotiating table or losing the contract altogether. You can’t just copy-paste a high-tech refinery into a new country and expect it to work. That kind of expertise takes decades to build.
The Disconnect: Geopolitical Risk Premiums Outpacing Actual Supply Disruptions
This is where I think a lot of the commentary gets it wrong. Everyone agrees resource nationalism adds costs and friction, but the market often prices in a level of geopolitical risk that just doesn’t line up with the actual, physical supply disruptions we see. You get these wild price spikes on the back of some policy announcement or tough talk from a politician, but the panic is often brief because real, sustained outages are rare. A country threatens an export ban and futures go crazy, but then you find out the ban has loopholes, new trade routes pop up to get around it, or industrial users find a substitute faster than anyone expected.
The real damage isn’t the dramatic shutdown everyone fears. It’s the slow, grinding erosion of predictability and the steady increase in the cost of business. Traders react to headlines, but on the ground, the reality is a messy process of negotiation and finding workarounds, a gradual adjustment, not a sudden stop. The risk is absolutely real, but the financial markets, driven by the 24-hour news cycle, consistently over-price the immediate threat, baking in worst-case scenarios that rarely play out and inflating premiums beyond what the physical supply and demand would justify.
The Strategic Imperative: Diversification and Domestic Investment
So what’s the playbook? It’s simple: diversify your sourcing and invest in your own domestic processing. You just can’t afford to depend on one or two countries for critical materials anymore. It’s a recipe for disaster. We’re seeing this play out in the U.S., which is finally getting serious about its own supply chains for things like rare earths by funding domestic mining exploration and offering big incentives for new processing plants. The Department of Energy is pouring money into this, a clear admission that being so dependent on global suppliers has become a major vulnerability.
This is about building resilience into your operations for security. If you can pull materials from different countries and process some of them at home, you’re much safer from a sudden policy change or political crisis in one part of the world. It takes serious long-term planning and a lot of capital, but doing nothing and getting caught with a broken supply chain will cost you far more in lost production. The old model of chasing efficiency above all else is being replaced by a focus on supply chains that are strong, secure, and spread out. That’s the big shift that will shape the commodity business for the next ten years.
You can’t be passive in this environment. For businesses, the job is to diversify your supply chains, build tougher infrastructure, and cultivate relationships with a wider set of producing countries. For governments, the work is to create the conditions that make domestic mining and processing attractive, giving them a buffer against global market swings. And all this is happening just as mining robotics are set to go autonomous by 2026, which will change the entire equation for extraction and labor all over again.
What is resource nationalism?
It’s when governments take more control over their country’s natural resources. They do it using tools like higher taxes on miners, outright nationalization, restricting exports, or requiring raw materials to be processed inside the country. The goal is always to keep more of the profits and benefits at home.
Which commodities are most affected?
The biggest targets are the critical minerals needed for the energy transition and high-tech manufacturing, things like lithium, cobalt, nickel, rare earths, and copper. But you also see it happening all the time with old-school commodities like oil, gas, and even some farm products.
How does this affect supply chains?
It makes everything more expensive and unpredictable. Raw material costs go up, supply becomes volatile because of sudden policy changes, and requirements for local processing can force manufacturing to move. It also creates a real risk of sudden disruptions from export bans. All of this forces companies to stop relying on single sources and start diversifying.
Does this make things more expensive for consumers?
Yes, absolutely. All the new royalties, taxes, and extra costs from building local refineries get baked into the price of raw materials. Manufacturers have to pay more, and those costs eventually get passed all the way down to the consumer in the form of higher prices for everything from cars to electronics.
How can companies protect themselves?
The best defenses are to stop relying on a single country for any raw material, start investing in your own processing plants in safer regions, and build real, long-term partnerships with governments and local firms. You also need a solid risk team that’s constantly watching the political situation in every country you source from.
