When Russia invaded Ukraine in February 2022, western allies used established and stable global supply chains to hinder Moscow’s ability to fund and wage war.
Today, that same network looks more fractured than ever, with Russia’s alternative supply network raking in billions in oil and gas exports alone. For import-dependent nations, this is a wake-up call: the reliable supply chains of decades past no longer exist.
The Strait of Hormuz is the world’s most acute supply chokepoint. The impact on commodity and raw material exports is comparable the situation prompted by Russia’s invasion of four years ago.
While some adaptation resulted from that particular supply shock, import-dependent regions have done little to repurpose their ability to access key resources when external events take over.
Twice now since 2022, these regions, particularly in Europe and Africa, have been at the acute mercy of wider geopolitical events. When Russia invaded Ukraine, there was considerable talk of Europe becoming more self-sustaining. No longer could the continent’s economies depend on external supplies, prone to shocks and political whims. We had to do more ourselves and start thinking logically and analytically.
Beyond these crises is a concentration of the critical minerals output around the world, allowing producer nations to impose record controls. The Organisation of Economic Development (OECD) issued a new report on Tuesday that found export restrictions on critical raw materials increased five-fold since 2009. As of 2024, global restrictions are at a record high and market concentration is increasing. The top three producing countries now account for more than two thirds of global cobalt, lithium, nickel, graphite and rare earth elements.
The recent interruption of safe passage through Hormuz has inflicted a heavy toll on Europe, while Russia is making billions in additional revenue through sales of oil, gas and fertiliser.
Disruption is also being acutely felt in other markets beyond Europe’s borders. Africa, a continent holding so much commercial promise, has experienced a profound economic shock as a result. Fertiliser supplies, so vital to agriculture the world over, have been severely constrained by the closure.
As much as 35 per cent of the global urea comes from the Gulf, much of which is bound for Africa. The effect is an anticipated 15 to 20 per cent drop in crop yields, exacerbated by the crisis coinciding with planting season.
Heavily import-dependent continents with high degrees of interdependence with Gulf economies are now tasked with boosting resilience against external supply shocks. This must begin by assessing which resources – be it oil, gas, critical minerals, food supplies or others – are most susceptible and where gaps can be filled by domestic production.
In Europe’s case, the EU has fixated on its manufacturing base while overlooking the importance of upstream resource extraction. Mining is a perpetually ignored sector in Europe, despite its significant potential to add economic value and build supply chain resilience.
The US, ironically, given its central role in current events, has already begun to act with strategic intent, moving to not only secure supply chains but to anchor them through direct exposure to upstream assets.
As an example, a US-backed consortium remains in talks on a $9 billion transaction for a 40 per cent stake in Glencore’s Mutanda and Kamoto Copper Company operations in the Democratic Republic of Congo – two of the world’s biggest copper and cobalt assets. That is what serious vertical thinking looks like.
That is the model Europe and Africa should now be willing to embrace. This is what thinking about your own critical resource supply lines looks like. It is an economic and strategic necessity. It means understanding that true independence does not begin in the factory, but at the mine, the wellhead, the fertiliser feedstock, the smelter and the refinery. Nations that control more of this chain build not only economic resilience but geopolitical room for manoeuvre, becoming less susceptible to volatile global markets.
In a hostile geopolitical environment, secure access to raw materials is not only a commercial issue, it is a prerequisite for food, defence and technological security. The ability to keep supermarket shelves stocked, military capabilities high and technological advancements on track all boil down to reliable, dependable access to resources.
In the world now emerging, sovereignty will be measured by who controls the ground beneath their feet and the materials that power their future. The reliable supply chains continents such as Europe and Africa once took for granted to deliver this no longer exist.
They have a choice: blindly hope that things will snap back to ‘normal’ or begin the difficult work of building self-reliance.
Michael Wurmser is the founder of Norge Mining
