Over the previous few years, a quickly increasing community of ‘vital minerals’ agreements has added additional complexity to world commerce and funding frameworks. The surge in deal making is pushed by geopolitical rivalries amongst giant economies to safe their provide chains in addition to by mineral-rich nation curiosity in mining sector growth. At a deeper degree, the agreements replicate a shifting financial paradigm, together with larger reliance on state motion to steer financial transformation, and on bilateral preparations as a governance mode. The phrases of the offers additionally spotlight that, to some extent a minimum of, bigger economies are competing not just for safety in provides, but additionally for alignment from mineral-rich nations.
These novel preparations could work together with, and depart from, established worldwide financial legislation obligations. New bilateral preparations may additionally embody commitments that compete or battle with present obligations owed to 3rd occasion states. Whereas some public commentary has already mentioned these developments from the perspective of huge economies, this blogpost explores implications for mineral-rich low and middle-income nations, assessing the chance that these nations may find yourself being caught within the authorized crossfire of great-power rivalries.
Evolving panorama of minerals offers
States have been utilizing totally different approaches of their vital minerals agreements: from memoranda of understanding (MOUs) to framework or strategic partnerships to integrating minerals-specific obligations into commerce and funding agreements. These bilateral, at occasions transactional agreements—whether or not gentle or binding in nature—are being layered on prime of present commerce and funding obligations, which stay in pressure.
The EU has signed a minimum of 15 agreements regarding vital minerals, with most of those agreements being described as MOUs or strategic partnerships on ‘sustainable’ minerals, supplies or metals. The devices are non-binding and focus totally on establishing mechanisms for cooperation, integration of worth chains, and joint financing of initiatives, amongst different points.
Regardless of a broader retreat from public worldwide legislation, the US has been energetic in concluding vital minerals agreements—signing a minimum of 21 agreements by February 2026 and reportedly concluding negotiations with 17 different nations. Most of those agreements are framed as MOUs or framework agreements, together with specific clauses clarifying that the agreements usually are not supposed to be legally binding.
This choice for soft-law devices could replicate a coverage concern about rapidity of public motion, although it could possibly additionally bypass constitutional safeguards—equivalent to ratification processes—that exist round conclusion of binding treaties. Whereas non-binding, the MOUs are nonetheless designed to affect state motion, notably round selling integration of vital minerals provide chains. The extent and contours of such outcomes stay to be seen, although asymmetries and pressures within the geopolitical situations surrounding a number of the offers would have a tendency to extend momentum in the direction of concrete outcomes.
Past soft-law devices, each the EU and US have integrated binding minerals-specific provisions into current commerce treaties. This consists of EU agreements with Chile and Indonesia, and US agreements with Argentina, Cambodia and Malaysia. Furthermore, the settlement the US concluded with the Democratic Republic of the Congo (DRC) in December 2025, whereas titled ‘strategic partnership’, stands out in that it reads like a binding instrument, utilizing ‘shall’ in operative provisions.
Different nations have additionally been energetic in increasing the worldwide community of vital minerals offers, with Australia, Brazil, India, Japan, South Korea and the UK, amongst others, having proactively concluded quite a lot of bilateral agreements.
Tensions between new frameworks and present obligations
The brand new devices current distinctive emphases relative to present worldwide financial legislation obligations. For instance, a number of bilateral partnerships concluded by the EU and mineral-rich nations check with selling home worth addition and native beneficiation, together with agreements with Rwanda, South Africa and Zambia. But present treaties on commerce and funding can constrain coverage choices for low and middle-income treaty companions to pursue efficient industrial methods and notice these targets. For instance close to native content material, home processing or expertise switch necessities. In the meantime structural constraints—equivalent to restricted fiscal house—could prohibit feasibility of choices in step with worldwide obligations.
Components of agreements concluded by the US current a clearer pressure with worldwide financial legislation obligations, notably people who mineral-rich nations could owe to third-party states. The US-DRC strategic partnership, for instance, requires that the DRC give US traders precedence—a ‘proper of first supply’—for Strategic Asset Reserve (SAR) initiatives. SAR initiatives are outlined broadly and flexibly as an ‘evolving record’ (Article IV). US individuals are granted a precedence negotiation window, solely after which—if a US proposal has not been accepted—the DRC can open negotiations as much as ‘aligned individuals’ (i.e. a non-US particular person not excluded underneath US home legislation and sanctions).
Though the DRC-US settlement is the publicly obtainable textual content with the strongest assertion of precedence for US corporations, different binding and non-binding devices additionally include prioritization commitments. The Malaysia-US MOU refers to individuals working ‘to prioritize funding from america’, whereas underneath the Thailand-US MOU ‘Contributors anticipate to have first alternative to speculate, in accordance with home legal guidelines, in vital minerals property’ (Article 1). In the meantime, the US-Argentina commerce and funding settlement consists of an obligation to prioritize the US as an funding and commerce accomplice ‘over market manipulating economies or enterprises’ (Article 4.1(4)).
Relying on how such commitments are carried out, they might foster state conduct that conflicts with pre-establishment obligations mineral-rich nations could owe to third-party states underneath relevant funding treaties. These obligations can require host states to confess and deal with international funding no much less favourably than traders from different states (‘most-favoured-nation’ therapy), i.e. with out prioritizing primarily based on nationality. The ASEAN Complete Funding Settlement (ACIA), for instance, consists of pre-establishment obligations that stretch to the admission of funding (Articles 5 and 6). Malaysia and Thailand are each occasion to this treaty.
The Regional Complete Financial Partnership (RCEP, Articles 10.3 and 10.4, topic to reservations) and the Complete and Progressive Settlement for Trans-Pacific Partnership (CPTPP, Articles 9.4 and 9.5) each additionally lengthen non-discrimination to institution, acquisition and growth of investments, along with defining traders as these ‘looking for’ (RCEP, Article 10.1) or ‘trying’ (CPTPP, Article 9.1) to make investments. Malaysia is occasion to each RCEP and CPTPP, whereas Thailand is a celebration to RCEP. Thailand’s bilateral treaties with Canada and Japan additionally lengthen non-discrimination provisions to institution, acquisition and growth.
Relying on the circumstances, then, implementing new bilateral prioritization commitments might place Malaysia and Thailand in breach of their treaty obligations in the direction of third-party states, presumably exposing them to state-to-state or (the place relevant) investor-state dispute settlement (ISDS) claims.
Potential tensions between new devices and present obligations may additionally come up in reference to offtake preparations. For instance, the binding US-DRC settlement requires the DRC to prioritize US corporations or the US marketplace for minerals offtake (Article XI). World Commerce Group (WTO) most-favoured-nation obligations require that ‘any benefit, favour, privilege or immunity’ granted by a celebration to an import or export ‘be accorded instantly and unconditionally’ to all different members (GATT Article I(1)). Implementation of precedence offtake commitments might conceivably expose treaty events to WTO litigation with third-party states, although the operation of the WTO dispute settlement system is at the moment impaired and requests for consultations have turn out to be much less frequent. Bilateral and regional commerce agreements with third nations may additionally have a bearing on these points.
Relying on how it’s executed, the institution of plurilateral commerce golf equipment on vital minerals might additional upscale these points. In February, the EU, Japan and the US introduced plans to determine such a plurilateral commerce initiative, additionally with aligned mineral-rich nations, as a way to scale back dependence on China. In keeping with a press launch issued by the three sides, such a scheme ‘might embody exploring the event of coordinated commerce insurance policies and mechanisms, equivalent to border-adjusted value flooring, standards-based markets, value hole subsidies, or offtake-agreements’.
Important minerals agreements inside a altering financial legislation panorama
In a world context characterised by great-power competitors, vital minerals offers—whereas negotiated bilaterally, typically in situations of uneven negotiating energy—are cumulatively advancing shifts in world financial governance. Within the course of, tensions between new and long-standing commitments, and between totally different bilateral devices, can create authorized dangers for mineral-rich low and middle-income nations. Whereas it’s too early to inform how the sliding scale of softer commitments or more durable obligations within the vital minerals agreements will translate into precise state follow, implementation might expose host nations to ISDS claims or commerce disputes underneath present financial treaties.
Such authorized dangers related to the rise of ‘transactionalism’ in vital minerals diplomacy echo developments in different areas of funding and commerce coverage. For instance, whereas the EU-Mercosur commerce settlement consists of safety of geographical indications in step with the EU’s regulatory strategy, the Argentina-US settlement on commerce and funding requires Argentina to not prohibit market entry for the US attributable to mere use of protected phrases for meat and cheeses (Articles 2.4 and a pair of.5 and Annex II). As soon as each devices are in pressure, or a minimum of provisionally utilized, Argentina could also be confronted with the right way to reconcile competing and even conflicting obligations.
These dangers spotlight the necessity for a extra holistic understanding of interrelations between totally different but carefully linked coverage areas and authorized devices, together with vital minerals offers, funding treaties and commerce legislation. They underscore the necessity for a extra coordinated strategy to vital minerals diplomacy, nurturing areas for dialogue and for collective motion—together with by groupings of mineral-rich low and middle-income nations—in multilateral fora on commerce, funding and local weather change.
Picture credit score: Diego Delso, CC BY-SA 2.0 DE.
