Guosen Securities released a research report stating that critical minerals have become a key focus area for many countries, primarily due to concerns over supply chain security. Against this backdrop, the resource attributes of critical minerals are becoming increasingly prominent, making prices more prone to increases than declines. Companies controlling critical mineral resources are recommended for strategic allocation. The main views of Guosen Securities are as follows:
The term "critical minerals" refers to non-fuel minerals or mineral materials essential to a nation's economy and security, with supply chains vulnerable to disruption. In China, the term "strategic minerals" is often used, referring to mineral resources crucial for ensuring national economic security, defense security, and the sustainable development of strategic emerging industries. In November 2025, the critical minerals list compiled by the U.S. Geological Survey was published, adding 10 minerals to the 2022 version, bringing the total to 60 species.
Research on critical minerals is vital for several reasons: 1) China can utilize export restrictions on strategic minerals as a countermeasure against Western nations. China possesses abundant mineral resource reserves, holding a dominant position in various rare metals such as tungsten (82.7% of global share) and rare earths (69.2% of global share). China also controls most of the global smelting capacity for these critical minerals; for instance, it accounts for approximately 90% of global rare earth smelting. China currently implements strict export controls on several critical minerals. 2) The United States aims to create market conditions and ensure mineral resource security through high tariff protections. Data from the U.S. Geological Survey indicate that the U.S. is entirely import-dependent for 12 critical minerals and relies on imports for over 50% of its needs for 29 critical minerals. It imports at least 29 mineral resources from China, highlighting vulnerabilities in its supply chain. The U.S. government is now fully intervening in the critical minerals supply chain. For example, in July 2025, the U.S. Department of Defense invested $400 million in U.S. rare earth producer MP Materials, acquiring a 15% stake to fund the construction of a new large-scale rare earth magnet plant. In February 2026, according to institutional reports, the U.S. plans to initiate a strategic critical minerals reserve with initial funding of $12 billion. 3) Frequent global geopolitical risks are prompting resource-exporting countries to gradually tighten resource policies. For nations controlling critical minerals, using policy tools to strengthen control over supply rhythms essentially contests global pricing dominance for these resources. Taking the Democratic Republic of Congo (DRC) as an example, which produces about 76% of the world's cobalt, the country implemented a prolonged export ban on cobalt raw materials in 2025 to address chronically low cobalt prices, switching to an export quota system on October 16, 2025. 4) Capital is rapidly flowing into the critical minerals chain, demonstrating a significant magnet effect. Amid macroeconomic uncertainties, capital markets are increasing allocations to the critical minerals sector, reflecting a deep anchoring in the strategic value and security logic of mineral resources.
Based on the current international political environment, the firm believes it is highly necessary to enhance research on critical minerals. It has selected 16 varieties for a systematic review of their industrial chains and fundamentals. For most varieties, supply exhibits vulnerability, with core supplies concentrated in a few countries, making them susceptible to geopolitical risks. Against a backdrop of tight supply-demand balance, any disruption in supply can lead to rapid price reactions for commodities.
Risk warnings include supply exceeding expectations, demand performing below expectations, and a moderation of geopolitical risks.
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