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Scarce Mineral Wars

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The race for critical minerals like rare earths, lithium, and cobalt is escalating, impacting healthcare and MedTech sectors reliant on advanced technology
Essential minerals for MRI machines, pacemakers, and wearable tech face supply threats from geopolitical conflicts, driving up costs and limiting access
China's control over critical mineral supplies exposes Western healthcare systems to risks, underscoring the need for supply chain resilience
Western firms should diversify supply sources, invest in recycling, support local mining, and partner with allies to reduce exposure to mineral shortages

Scarce Mineral Wars: How Resource Battles Are Redefining Healthcare and MedTech

In October 2024, the 16th BRICS Summit took place in Kazan, Russia, marking a watershed moment in global geopolitics with the bloc’s historic expansion to include five new members: Saudi Arabia, Egypt, the United Arab Emirates (UAE), Iran, and Ethiopia. This enlargement effectively doubled BRICS’ membership, evolving it from a coalition of five nations into an alliance of ten influential global players. Collectively, the expanded BRICS now represents ~46% of the world’s population and commands a substantial 35.6% share of global GDP measured by purchasing power parity (PPP) as of 2022. Within the bloc, China continues to dominate economically, contributing 52% of BRICS’ total GDP at PPP, underscoring its pivotal role in shaping the group’s trajectory.

Originally conceptualised by Goldman Sachs economist Jim O'Neill in a 2001 research paper, the term “BRIC” highlighted the emerging economic clout of Brazil, Russia, India, and China as a counterweight to the dominant G7 wealthy economies. Fast forward to 2024, the Kazan summit brought together 36 world leaders, including key figures from China, India, and Iran, signalling a shift in global power dynamics. Despite Western isolation of Vladimir Putin and his indictment by the International Criminal Court as a potential war criminal, the event underscored Russia’s enduring geopolitical influence and the gradual erosion of Western hegemony. Among the summit's most consequential developments was a renewed pledge to accelerate the de-dollarisation of global trade - a strategic manoeuvre designed to curtail the United States' ability to wield economic sanctions as a foreign policy instrument. Internal disagreement has slowed its progress and in December 2024, Trump said he would impose 100% tariffs on the BRICS bloc of nine nations if they were to create a rival currency to the US dollar. Following his inauguration, he suggested imposing a 25% tariff on all goods imported into the US from Canada and Mexico. The President’s economic advisers appear split. Notwithstanding, we should expect a growing contest for influence in an increasingly multipolar world.

In this Commentary

This Commentary explores the geopolitical struggle over scarce minerals, focusing on the implications for Western healthcare and MedTech companies. It highlights the October 2024 BRICS summit's efforts to challenge American economic dominance, China's control over critical minerals, and the impact on medical technology development. The Commentary also outlines strategies for Western companies to navigate rising costs, supply chain vulnerabilities associated with shifting global power dynamics.

The Scarce Mineral Wars

The intensifying competition for critical minerals like rare earth elements, lithium, and cobalt has become a key battleground in the US-China rivalry. These resources are indispensable for advancing technologies in sectors such as healthcare, defence, MedTech, and green energy. Often dubbed the scarce mineral wars, this struggle extends beyond securing supply chains to asserting leadership in global technological innovation.

China’s dominant role in mining, processing, and exporting these minerals - bolstered by its Belt and Road initiative - has exposed vulnerabilities for the US and its allies. The 2024 US Geological Survey (USGS) highlights that the US relies on imports for >50% of 49 critical minerals and is fully dependent on imports for 15, with China as the main supplier for 24 of them. Recent Chinese export restrictions, including on graphite, have further underscored these risks, particularly for US industries.

Rare earth elements, essential for high-tech applications like MRIs, pacemakers, and wearable medical devices, and lithium and cobalt, critical for rechargeable batteries in medical equipment and data centres, exemplify the stakes. As Western nations seek to secure stable supplies, tensions over trade, tariffs, and technology transfer have escalated, raising concerns about the long-term resilience of Western healthcare systems and MedTech innovation.

Amid these dynamics, the return of Donald Trump’s administration in January 2025, with its confrontational foreign policy and emphasis on transactional alliances, signals potential trade conflicts that could further disrupt global supply chains, resource security, and technological advancement.

The Role of Critical Minerals in Healthcare and MedTech

In modern healthcare and MedTech, the reliance on critical minerals cannot be overstated. These materials are fundamental to manufacturing a wide range of devices and technologies that enhance patient care, improve diagnostic accuracy, and support healthcare infrastructure. Below are some examples illustrating the role these minerals play:

Diagnostic Imaging Equipment Rare earth elements, particularly gadolinium, are used as contrast agents in MRI machines, which are crucial for diagnosing a variety of conditions, from brain tumours to joint disorders. The magnets inside MRI scanners also rely on rare earths like neodymium and dysprosium to achieve the high magnetic strength required for clear imaging. If these minerals become scarce or more expensive due to geopolitical conflicts, the cost of diagnostic procedures could rise, potentially limiting access to critical healthcare services.
Pacemakers and Implantable Medical Devices Lithium batteries power a range of life-saving implantable devices, such as pacemakers and defibrillators. These devices are essential for patients with cardiac conditions and can improve quality of life for millions. As the demand for lithium increases, particularly with the surge in electric vehicle production, healthcare may face competition for the available supply, leading to higher costs or shortages.
Wearable Devices and Telehealth The shift towards digital healthcare and remote monitoring has increased the demand for wearable medical devices, which frequently use rare earth magnets in sensors and lithium batteries for power. These devices, which include fitness trackers, blood pressure monitors, and continuous glucose monitors, are integral to preventive healthcare strategies and chronic disease management. Disruptions in the supply of rare minerals could compromise the availability and development of new wearable technologies, limiting healthcare providers' ability to offer innovative, patient-centred care.
Electronic Healthcare Records and Data Infrastructure Data centres that store and manage electronic healthcare records rely on energy-dense batteries and servers that contain critical minerals. As the healthcare industry continues to digitise, secure access to these minerals will be necessary to maintain the reliability and scalability of health data infrastructure.

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The Geopolitical Context and US-China Rivalry

The US has long been a leader in healthcare innovation, but its dominant position is increasingly under threat as geopolitical dynamics shift. China’s rise as a global superpower has been supported by its strategic approach to securing critical mineral resources. China controls ~60% of the world’s rare earth mining and >80% of its processing capacity. It is also a leading player in lithium production and the global supply of cobalt, much of which is mined in the Democratic Republic of Congo under Chinese ownership or partnerships. By comparison, the US has only recently begun to recognise the risks associated with mineral dependence and has struggled to build a robust domestic supply chain.

The strategic implications of China’s control over these minerals became clear when Beijing threatened to restrict rare earth exports to the US during the 2019 trade war. Such actions reveal how mineral supply chains can be weaponised, potentially disrupting the production of critical technologies in Western economies. This risk has only grown as tensions over trade policies, intellectual property rights, and geopolitical influence continue to escalate.

The 2024 BRICS summit, where leaders discussed ways to reduce reliance on the US dollar for international trade, further exemplifies the shifting geopolitical landscape. As nations like China, India, and Russia seek to establish alternative trading networks, Western companies are likely to face additional challenges in accessing critical minerals. For healthcare and MedTech companies, the ramifications could be significant, affecting everything from device manufacturing to R&D.

Impacts on Western Healthcare and MedTech Companies

Rising Costs and Supply Chain Vulnerabilities As the US and China continue to vie for control over critical mineral supplies, Western healthcare and MedTech companies could experience rising costs for raw materials. The increased expense may be passed on to consumers in the form of higher healthcare costs, which could limit access to advanced medical technologies. Additionally, companies may face disruptions in their supply chains if geopolitical tensions result in export bans, trade restrictions, or other barriers to mineral access.
R&D Delays The development of new medical technologies relies on the availability of rare minerals. For example, the miniaturisation of medical devices and the enhancement of diagnostic imaging technologies often require advanced materials that exhibit specific magnetic, conductive, or thermal properties. If these materials become difficult to source, the pace of innovation could slow, and some promising new treatments or devices might never reach the market.
Regulatory and Strategic Pressures The US and Europe are becoming increasingly aware of the strategic importance of critical minerals and are implementing policies to reduce dependence on foreign sources. However, efforts to boost domestic mining and processing capacity have encountered environmental and regulatory hurdles, which may delay the development of local supply chains. Western healthcare companies may find themselves caught between complying with new regulations and securing the materials needed for product development.
Technological and Competitive Risks If Western companies cannot secure stable supplies of critical minerals, they may fall behind in the global race to develop cutting-edge medical technologies. This could lead to a situation where Chinese companies, backed by government policies and access to essential resources, gain a competitive advantage in key areas such as diagnostics, wearable health technology, and surgical robotics.
Broader Economic and Strategic Implications For decades, the US has been the world's largest MedTech market, with the majority of leading MedTech companies headquartered in America, enjoying a comfortable position as global market leader. However, the growing shift towards a multipolar world, where US influence is increasingly challenged, threatens to disrupt this status quo. The evolving landscape, marked by events such as the 2024 BRICS summit, suggests a shift in global trade dynamics and economic power. As alliances change and new economic blocs emerge, US-based healthcare and MedTech companies will likely face a stress test, requiring them to adopt adaptive strategies that can withstand the pressures of a diversifying global market and a potential erosion of their longstanding dominance.

Defensive Strategies for Western Healthcare and MedTech Companies

To navigate the challenges posed by the scarce mineral wars, healthcare and MedTech companies in the West must adopt proactive strategies. Here are some suggestions:

Diversifying Supply Chains Companies should explore alternative sources for critical minerals, including partnerships with suppliers outside China or investments in developing new mining projects in regions like Australia, Canada, or South America. Diversifying supply chains can mitigate risks associated with geopolitical disruptions and ensure a more stable supply of raw materials.
Investing in Recycling and Material Recovery The development of technologies for recycling critical minerals from electronic waste can provide a supplementary source of these materials. By recovering valuable metals from retired medical devices or other equipment, companies can reduce their reliance on primary mineral extraction and contribute to a more sustainable supply chain.
Supporting Domestic Mining and Processing While regulatory and environmental concerns pose challenges, Western companies should advocate for policies that support the responsible development of domestic mining and processing capabilities. Government incentives for research in mineral processing technologies and investment in local supply chains could enhance resource security.
Developing Substitutes and Alternative Technologies Investing in research to find substitutes for scarce minerals, or developing technologies that use less of these materials, can reduce dependency on critical supplies. For example, innovations in battery technology that rely on more abundant elements or synthetic alternatives for magnetic materials in imaging equipment could offer viable pathways to mitigate resource constraints.
Building Strategic Reserves Similar to how governments maintain strategic petroleum reserves, companies and governments could collaborate to establish strategic reserves of critical minerals. This approach could provide a buffer against supply disruptions and price spikes, offering some stability in times of geopolitical crisis.
Collaborating with Allied Nations Strengthening partnerships with allied countries that possess significant mineral resources can provide more reliable access to critical materials. International agreements that prioritise the export of minerals for medical and technological purposes could help secure supplies while fostering diplomatic ties.

Takeaways

The ongoing scarce mineral wars between the US and China are not just a trade dispute but a broader struggle for technological and economic dominance. As the global landscape shifts towards multipolarity, the implications for Western healthcare and MedTech companies are significant. Rising costs, supply chain vulnerabilities, and the risk of falling behind in technological innovation are threats that demand attention. By adopting strategies to diversify supply chains, invest in recycling, support domestic production, and collaborate internationally, Western companies can better navigate this challenging landscape. The path forward requires both strategic foresight and a willingness to adapt to an evolving geopolitical environment. In doing so, healthcare and MedTech firms can safeguard their future and continue to provide cutting-edge solutions that improve patient outcomes in a world of increasing complexity.

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