Mining in the age of mayhem as global shifts, power plays and policy whiplash redraw the map for critical minerals and Australia’s next move

When global power plays, policy whiplash and economic shocks collide, opportunity hides in the chaos — and for Australia’s critical minerals sector, survival now depends on strategy as much as supply.

At the recent AusIMM critical minerals conference, PwC Australia’s chief economist Amy Lomas offered a sobering yet strategic view of what this new world order means for mining, investment, and trade. “We are in an exceptionally high period of economic uncertainty,” she said. “It’s a combination of post-pandemic impacts, wars in Ukraine and the Middle East, and the dramatic policy shifts in the world’s largest economy.”

If you were hoping for calm seas, Amy joked, you came to the wrong harbour.

A fracturing world order

Amy’s address offered an economist’s perspective on what happens when geopolitical tension meets the race for decarbonisation. Her message was clear: the global frameworks built after World War II — the alliances, trade agreements and institutions that once underpinned stability — are now straining under protectionism and political rivalry.

“We’re seeing a breakdown in post-Cold War alliances,” she explained. “A rise in coercive and retaliatory actions — tariffs, trade restrictions, and new forms of economic nationalism.”

The result? An economy where uncertainty itself has become the defining feature. Governments are rewriting industrial policy on the fly, and the ripple effects are being felt most acutely in sectors like critical minerals that sit at the intersection of energy, technology and defence.

Washington’s whiplash

Amy devoted a large part of her analysis to the United States — “the big game-changer since the beginning of the year.” Few could have predicted, she said, the speed, scale, and far-reaching effects of the new administration’s policy reversals.

“The pace at which these changes are being implemented has caught everyone by surprise,” she noted. “We’re seeing a dialling back of decarbonisation efforts and a doubling down on national security.”

In practice, that means research and development cuts, loosened emissions regulations, and a renewed push for domestic fossil-fuel production — policies that, in Amy’s view, complicate the global energy transition. Meanwhile, on the national-security side, the U.S. has imposed tariffs to incentivise onshore critical-mineral production and even demanded revenue payments from chip giants Nvidia and AMD for exports to China.

“As an economist, I found that incredible,” she said. “It’s effectively the U.S. government taking a share of corporate export revenue. What’s more remarkable is how little retaliation we’ve seen from China so far.”

Gold, bonds and dry powder

Uncertainty, of course, has consequences. The first-order effects, Amy said, are slower global growth and volatile financial markets.

“We’ve seen bond yields spike, stock markets lurch, and investors scrambling for safety,” she explained. “Central banks and funds are increasing their exposure to gold, while companies are preserving cash. There’s a lot of what investors like to call ‘dry powder’ sitting on the sidelines.”

This flight to safety is mirrored in commodity markets. “Except for gold, commodity prices remain subdued,” Amy said. “Industrial commodities are under pressure from weaker demand, tariffs, and supply-chain reconfigurations. It’s unlikely we’ll see significant upward price movement in the near term.”

Yet there are bright spots. China’s growth trajectory — tracking closer to five percent this year rather than the four percent economists expected — is helping offset some of the drag. Defence spending across Europe is surging, and commitments to decarbonisation beyond the U.S. remain largely intact. “COP 30 in Brazil will be one to watch,” she added, “but for now, the global energy-transition agenda is still moving forward, just unevenly.”

The long game: capital, trade and trust

Where short-term markets see risk, Amy sees the long-term re-wiring of global capital flows.

“Capital is moving away from the U.S. and into the EU and emerging economies,” she said. “We’re also seeing accelerated trade between regional blocs, particularly between China and ASEAN. ASEAN is now China’s largest trading partner — that’s a major structural shift.”

The rise of the BRICS nations — Brazil, Russia, India, China and South Africa — is reinforcing this multipolar world. “It’s not just a political statement,” Amy observed. “It’s an economic realignment. Investment patterns are following the new alliances.”

For critical-minerals producers, she said, this presents both challenge and opportunity. “Governments are becoming more interventionist. Resource nationalism, protectionism and the language of ‘sovereign capability’ are all making a comeback. Depending on where you sit, that can be a blessing or a curse.”

The Australian paradox

One of Amy’s most compelling slides compared Australia’s trade and investment flows. It revealed a fundamental imbalance: while China remains Australia’s number-one export destination, the U.S. is its largest source of foreign direct investment.

“You can see the problem straight away,” she said. “We’re happy to sell to one country but rely on another for our capital. For a sector as strategic as critical minerals, that’s a vulnerability.”

Her prescription is pragmatic. “We need more diversified, end-to-end strategic link-ups — countries with mutual interests in defence, energy and digital technology. For instance, if we’re supplying the minerals that go into someone’s air-defence systems, that partner should also be investing in our upstream capability.”

That, she argued, means combining capital and trade through alliances that serve shared national interests — not just transactional ones.

Productivity on the slide

Economists like Amy love a data curve, and the next one wasn’t pretty. Mining labour productivity in Australia has fallen 18 percent since 2019. Despite being one of the country’s most productive sectors, it’s no longer improving.

“Productivity in mining typically comes from new technology,” she said. “But in critical minerals, smaller scale and more specialised production make it harder to achieve economies of scale. Leveraging new technologies becomes essential.”

China’s relentless investment in mining-related R&D, particularly downstream processing, shows what’s at stake. “China now accounts for nearly half of all global mining-technology patents,” Amy noted. “And it’s coupling that innovation with advanced manufacturing in its partner nations across the Asia-Pacific.”

Her numbers are sobering: research and development intensity in China rose from 2.4 percent of GDP in 2020 to 2.7 percent in 2024, equating to about 3.5 trillion yuan — a figure that dwarfs the investment capacity of most Western economies.

The decoupling question

There’s another emerging trend Amy believes will define the next decade: China’s apparent decoupling of GDP growth from emissions growth.

“If that decoupling is real — and the data suggest it might be — then we’re entering a new phase,” she said. “China may have reached the point where it can grow its economy without proportionally increasing emissions. That raises the question: where does the momentum for critical-minerals demand shift next?”

Part of the answer, she suggested, lies in China’s success in positioning itself as the world’s decarbonisation equipment manufacturer. “Ten percent of China’s GDP now comes from clean energy,” Amy said. “It produces 70 percent of the world’s electric-vehicle manufacturing capacity. That’s an extraordinary strategic position.”

Lessons for Australia

So what does all this mean for Australian miners, explorers and suppliers working in the critical-minerals value chain?

First, Amy said, Australia must continue diversifying its trade and investment partners — particularly within the Asia-Pacific. “We have to think more strategically about who we sell to and who invests in us,” she said. “It’s about building resilience into the system.”

Second, the industry must embrace technological innovation as its main lever for productivity growth. “If prices stay flat, margins will depend on efficiency,” she said. “That means automation, processing innovation, and digital capability.”

Third, she emphasised the growing role of governments as active participants in shaping supply chains. “Expect more state involvement — not just in funding and regulation, but in forming alliances and joint ventures. Strategic tie-ups will increasingly link energy, defence, and digital technologies through the common denominator of critical minerals.”

A market built on complexity

Amy closed her talk with a reminder that the critical-minerals market is unlikely to become simple or stable any time soon.

“It’s going to remain a complex market,” she said. “Efforts to diversify must continue to reduce vulnerabilities to price swings and geopolitics.”

Her tone wasn’t pessimistic — more like a seasoned navigator charting a foggy sea.

“We’ll see more partnerships based on shared strategic needs,” she concluded. “But to succeed, Australia must align its economic strategy with both decarbonisation and national security imperatives. That’s the reality of this new era of uncertainty — and the opportunity within it.”

In a world where alliances shift faster than lithium prices, Amy Lomas offered a steady-handed reminder that uncertainty doesn’t mean paralysis. It means preparation. The nations and companies that prosper will be those that adapt — diversifying relationships, investing in technology, and staying agile enough to move when the wind changes.

“For critical minerals, it’s a blessing and a curse,” she said, “but above all, it’s a chance for Australia to play smarter.”