The new limits of growth
In the final article of our series, we explore how businesses face hard planetary and geopolitical limits that make the “business as usual” growth model untenable as climate shocks, biodiversity loss, and...
Geopolitics
Resource wars! How circularity is becoming your best defense
In this second article of our series on geopolitics and circularity, we examine how the scramble for critical inputs is fueling a new era of resource wars and what it means for businesses and executives.
If the first cracks in globalization showed where the old system was fragile, the new “resource wars” reveal how quickly the stakes can escalate.
Right now, executives and directors all over the world are wrestling with the same problem: critical materials are no longer easy to get, prices have become more volatile, and competition over resources is fierce. This holds for precious metals – e.g., the price of gold has doubled in the last five years, chasing all-time highs – as well as base metals. Lithium, cobalt, tantalum, and other rare earths are at the center of a global scramble, with commodity market prices highly volatile amid concentrated supply and geopolitical shocks. All of this is happening as demand for critical minerals is growing, driven by the energy transition, global data center buildout, and investments in the defense sector.
The Energy Transitions Commission (ETC) estimates that by 2030, the gap between supply and demand for several minerals could reach 40% for graphite and cobalt, 30% for neodymium, and 10% for copper and lithium. Secondary material sourced through proper recycling is playing an increasingly important role, but many end-of-life recycling rates remain low and will take time to improve.
These supply-demand dynamics create significant short-term pressure in addition to the geopolitical dynamics. According to the ETC, it’s possible that most new demand for clean energy technologies could be met through secondary supply by 2050.
This raises a critical question: who will control these flows? Governments are intervening, and companies that once assumed they could always buy what they needed are waking up to new vulnerabilities.
The front lines of competition have shifted. It is no longer about who can buy the most at the lowest cost. Now, it is a race for control over vital materials. Supply is tighter than ever, and national governments are scrambling to secure access. In April, China’s threats to further restrict exports of rare earth metals, for example, sent shockwaves through the entire electronics and automotive sectors. The EU has listed 34 minerals as critical and/or of strategic importance for European society and welfare and is urgently developing the Critical Raw Materials Act as a top priority. Access to resources has arrived at the center of national political agendas, both for primary and secondary materials. For example, recent US policy now treats copper scrap as a strategically important material. Trade barrier dynamics illustrate how the landscape is changing: tariffs on aluminum products from the EU remain at 50%, but only 15% apply to aluminum scrap, creating clear incentives to export secondary material. The race for control over natural resources is intensifying.
The resource wars are not only about new mining projects, but increasingly about who dominates recycling and secondary processing. According to the International Energy Agency, countries able to secure both primary extraction and robust secondary (recycling) supply chains will hold a decisive strategic advantage in the coming decades.
The EU has made it clear through its Critical Raw Materials Act and Battery Regulation that it aims to become a global leader in battery and electronics recycling, with ambitious targets to reduce dependence on imports. China, meanwhile, continues to invest heavily in domestic closed loop recycling for batteries and rare earths as part of its industrial strategy. CATL, a key player in the battery industry with a market share of almost 40% in the EV sector, is investing in its global expansion, and plans to roll out its battery swapping and recycling technology into Europe as well.
“Each ton of metal or battery shipped to a customer is not just lost revenue, but future vulnerability, an open door for supply chain disruptions, unpredictable price spikes, and even the risk of being shut out of critical markets altogether.”
Yet, even as major economies race to strengthen their positions as leaders in recycling and secondary processing, and to secure greater self-sufficiency in critical materials, the global outlook remains fraught with risk. There is a stark warning in the IEA’s 2025 Global Critical Minerals Outlook – unless we reduce demand for natural resources, diversify supply, and dramatically ramp up recycling, bottlenecks could stall not just individual businesses, but whole economies.
So, the urgent question is no longer, “Where do we get more materials?” but rather, “How do we get our materials back?” For too long, companies have treated raw materials as disposable, building supply chains that stretch across continents and letting valuable resources walk out the door with every product sold. In a world of resource nationalism and supply shocks, that approach has become a dangerous liability. Strategic sourcing diversification and long-term contracting are the only immediate reactions to secure business continuity. The mindset is shifting to strengthening the enduring value chain resilience. Each ton of metal or battery shipped to a customer is not just lost revenue, but future vulnerability, an open door for supply chain disruptions, unpredictable price spikes, and even the risk of being shut out of critical markets altogether.
Instead of scrambling for scarce minerals on the open market, they can extract what they need from their own closed loops, on their own terms.
What’s to be done? Circularity, for those willing to rewire their business, provides the answer.
The real leap is servitization: delivering products “as a service,” but retaining ownership and recovering valuable inputs at end of life. This isn’t just clever accounting; it’s how to future-proof your business against shocks. This approach radically focuses on customer value and keeps companies connected to their materials across multiple lifecycles, ensuring that valuable inputs are recovered, refurbished, and redeployed, rather than lost to the global scrap heap.
Servitization isn’t just a clever business model; it’s a defensive shield. By retaining ownership of high-value components and products, companies dramatically reduce their exposure to geopolitical shocks and resource bottlenecks. Instead of scrambling for scarce minerals on the open market, they can extract what they need from their own closed loops, on their own terms.
Consider Hilti, which has innovated such a “tool fleet” as a service offering, focusing on customer needs by providing a running set of tools and maximum productivity on the construction site. If a tool is broken, it will be quickly replaced, refurbished, and put back into the fleet, without the need to produce new products. Or look at TRUMPF, the German leader in laser cutting technology, which has developed a new business model that shifts from simply selling machines to offering “equipment as a service.” By retaining ownership, managing remote supervision, and handling all maintenance and upgrades, TRUMPF keeps critical materials and components circulating within its own supply chain, shielding itself from global shocks and material shortages.
In addition, other circular business strategies contribute to strategic resilience. Brands and OEMs are actively entering the secondary market for their products. In the fashion industry, for example, companies like Patagonia or The North Face have set up trade-in and resale platforms. This enables companies to strengthen loyalty with their customer base, but also to diversify revenue streams and sell (used) products in case supply chains for new production are under pressure.
Mining and materials companies are increasingly active in material recovery and recycling. Consider precious metals. Compared to open loop recycling, where the original purchaser of the metal does not retain control and the scrap is then recovered in the open market, closed loop recycling is playing an increasingly important role, so that the metals are retained within the same applications typically by the same owner. Johnson Matthey, a global leader in platinum group metals (PGMs), is developing new solutions and business models to control material flows and keep PGMs in active use.
This shift is also putting new pressure on skills and talent. As companies expand such “product as a service” and closed loop strategies, demand is growing for expertise in advanced recycling, digital traceability, and circular business models, but talent pools are not yet as deep as they need to be.
At the same time, leaders must balance the drive for resource independence with the risks of protectionism. Overly rigid localization or “friendshoring” – i.e., shifting supply chains to politically allied countries – can create new vulnerabilities by reducing flexibility and access to global innovation. Building truly resilient systems requires a mix of local loops, diversified sourcing, and openness to international collaboration where it adds value. For several materials flows, it will be required to collaborate and build new ecosystems that establish a collective material recovery system (incl. the relevant offtake commitments).
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Finally, it’s important to acknowledge that these resource strategies also have ripple effects for mineral-producing countries, many of which are in Africa, Latin America, and Southeast Asia. As the “global North” tightens its grip on recycled and secondary flows, questions of equity, value sharing, and long-term partnership are coming to the fore. Companies with international footprints need to consider not just how they secure materials, but how they contribute to sustainable development and avoid new forms of dependency.
The stakes have never been higher. In this new era of resource nationalism, taking access to materials for granted is like handing over the destiny of your company to other actors. Those who move decisively to build circular models and embrace servitization aren’t just protecting themselves from supply shocks; they’re seizing the initiative. The winners of the resource wars will be those bold enough to own their materials, close their loops, and set the pace for an industry that’s being rewritten in real time. The future belongs to those who build this new thinking into their product design choices early on and take it back.
In our next article in this series, we’ll explore how companies can adapt as scarcity and volatility redefine what value really means.
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