(Zero Hedge)—The global push toward electrification carries several risks, including replacing dependence on foreign oil and natural gas with reliance on Chinese technology and critical materials, as access to cheap electricity dictates investment flows and where AI and industrial bases thrive.
Christian Keller, Barclays’ global head of economics research, co-authored a note Tuesday on how rapidly accelerating geopolitical fragmentation and surging power demand are rewiring the global economy. He argued that countries must secure traditional fuel supplies while investing heavily in electricity generation, grids and storage.
Keller identified China’s near-total control of more than 95% of critical material refining in areas such as heavy rare earths as a major vulnerability for countries dependent on those supplies.
Critical materials whose mining or refining China controls are critical inputs for electricity infrastructure, industrial production, the upcoming rearmament cycle, and the AI data center buildout. Replacing Chinese supplies requires far more than discovering new deposits and will take years.
For the West, building competitive supply chains outside China, from mining critical materials such as tungsten to refining rare earths and manufacturing magnets, will be extraordinarily difficult and time-consuming. China’s dominance in the space is expected to persist through at least 2030 despite ongoing Western efforts to diversify.
“China’s quasi-monopolistic position provides it with significant geopolitical leverage,” Keller warned.
A Reuters report late last week revealed that some Chinese rare-earth suppliers were refusing to ship materials to US customers. The report suggests supply disruptions remain a major issue ahead of the Trump-Xi meeting scheduled for later this month.
Here is Keller’s warning for the West:
Negotiating critical minerals supply chains
Electrification is only likely to advance as a global trend. Especially in energy-importing countries, being key for achieving energy sovereignty (next to lowering carbon emissions). In turn, that transition towards an electricity-dominated system is contingent on critical minerals (Transition minerals: unearthing opportunities from a $500bn supercycle). However, the global reserves of these minerals are often concentrated in certain locations: eg, lithium (over 30% in Chile), cobalt (over 50% in DR of Congo), nickel (over 40% in Indonesia). Moreover, the degree of processing is often crucial, potentially also making small reserves valuable, if fully processed.
In this context, China plays a crucial role, given its tight control over the global critical mineral supply chain and refining capacity, including graphite, gallium and rare earths (Figure 10 & Figure 11). China’s quasi-monopolistic position provides it with significant geopolitical leverage. Other countries also use export controls for minerals where they have dominant positions to gain strategic leverage, eg, Indonesia with nickel and bauxite.
Hence, critical minerals will likely play central roles in international negotiations about trade or geopolitical settlements. The US tariff concession to Beijing in order to retain access to rare earths and its plan to build its own rare earth mining and refining capacities are likely only the beginning . Efforts to re-shore minerals mining and refining capacity are also likely to take time, as shown by the persistent concentration of value chains projected out to 2030 (Figure 12). Potential conflicts over critical minerals access in some of the already unstable African regions are also likely. Australia could play an increasingly important role, given its abundance and diversity of reserves in critical minerals and rare earths.
The key complement to resources in the ground are the capital flows to provide the necessary financing. Here, capital-rich advanced economies such as those in Europe could try to increase their role. However, as Figure 13 and Figure 14 show, despite the industrial strategy efforts of governments in the West, building out a comprehensive and cost-effective ‘mine to magnet’ value chain decoupled from China is extremely difficult and likely to take time.
Overall, economic statecraft involved in securing critical mineral supply chains will become a mix of export controls, foreign investment restrictions, access to foreign capital, and sanctions, possibly project-focused and with changing alliances.
Keller’s warning underscores why we’ve made China decoupling a core investment theme, building on our nuclear theme, AI buildout, and powering up America themes, highlighting companies such as MP Materials and Almonty as the West races to secure alternative critical material supplies.
Breaking Beijing’s “quasi-monopolistic” grip will require operating mines, processing capacity, and reliable deliveries. Many junior miners still face years of permitting, financing and construction before producing their first commercial shipments. Companies that can bring supply online sooner could capture a crucial early market advantage, such as Almonty’s ex-China tungsten production ramping up in South Korea.
The SPDR S&P Metals & Mining ETF (XME) has yet to confirm another breakout but certaintly coiling.
Related:
For readers, the decoupling theme is about identifying miners already producing and able to close the supply gap. The opportunity lies in who can deliver first in size.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
