Critical minerals supply chain risk isn’t primarily a sourcing problem, supply chain expert Kenneth Johnson argues — it’s a governance problem. As resource-rich countries increasingly seek to expand their share of value through export restrictions and local processing requirements, US companies face a compliance environment that is growing more complex and less predictable, often faster than their risk frameworks can absorb.
The US has entered a new phase of industrial policy, one defined not by market reliance but by strategic intervention.
In recent years, Washington has committed substantial public resources to rebuilding domestic capacity in sectors deemed critical to economic security and national defense. Semiconductor manufacturing, advanced batteries and defense technologies have all been prioritized through targeted legislation and institutional mandates.
The scale of this shift is significant. The CHIPS and Science Act allocates approximately $53 billion to strengthen domestic semiconductor manufacturing and reduce reliance on external supply chains. At the same time, institutions like the US International Development Finance Corp. have expanded their role in financing critical minerals projects abroad, while the US defense sector continues to maintain strategic reserves through the national defense stockpile to mitigate supply disruptions.
These actions reflect a clear policy direction: Supply chain resilience is now a core component of national security. Yet despite this progress, a fundamental gap remains.
US policy has focused heavily on strengthening domestic industrial capacity. However, the upstream and midstream segments that feed these industries — mining, processing and refining — remain largely external and structurally misaligned with US strategic objectives.
This is not simply a sourcing issue; it is a governance problem.
The structural imbalance
The global critical minerals system is characterized by a persistent imbalance.
Resource-rich countries, many of them in Africa, produce a substantial share of the world’s critical minerals but capture a limited portion of the value associated with them. In many cases, upstream producers retain less than 10%-15% of total value, while higher-value processing, refining and manufacturing activities are concentrated elsewhere.
At the same time, downstream processing capacity for several critical minerals is often 80%-90% concentrated in a single geography, creating systemic vulnerabilities for industrial economies, including the US.
This is a structural imbalance, not merely a geological one. For US policymakers and corporate compliance leaders, the implications are clear: Exposure is not limited to supply disruption; it extends to regulatory volatility, investment uncertainty and shifting policy regimes in resource-producing countries seeking to expand domestic value capture.
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Read moreDetailsLimits of current approaches
Two dominant policy approaches have emerged in response to this imbalance.
The first is resource sovereignty, where governments impose export restrictions or local processing requirements in an effort to accelerate industrialization. While grounded in legitimate development objectives, these measures often outpace domestic capacity, leading to disrupted supply chains and reduced investment.
The second is unstructured liberalization, where extraction proceeds with minimal domestic value addition. This approach supports short-term supply continuity but reinforces long-term dependency and increases the likelihood of future policy intervention.
Both models introduce risk from a US perspective, either through abrupt regulatory shifts or through the accumulation of unresolved structural tensions that eventually trigger them.
Closing the governance gap
Addressing this challenge requires a more disciplined alignment between sovereign policy, industrial capability and global supply chain integration.
A structured approach I developed is one way to address this alignment challenge. I call it proportional collaborative sovereignty, or PCS, and I believe it offers a practical execution model.
PCS is grounded in a clear operational principle: Sovereign control over mineral value chains should expand in proportion to demonstrated domestic capability. Rather than imposing immediate restrictions or maintaining open-ended extraction models, policy evolves in sequenced stages aligned with real capacity in processing, refining and manufacturing.
This sequencing reduces policy volatility while improving investment clarity, two factors that have consistently undermined both development outcomes and supply chain stability.
Equally important, the model emphasizes collaborative industrialization. Industrial capacity is developed through structured partnerships — joint ventures, co-investment and technology transfer — often at regional scale. This enables resource-rich countries to build sustainable industrial bases while maintaining integration with global markets.
The relevance of such an approach is reinforced by recent policy outcomes in multiple jurisdictions. Export restrictions implemented without sufficient domestic processing capacity have, in some cases, resulted in reduced revenues, constrained production and delayed industrial development. These outcomes highlight the risks of misalignment between policy ambition and execution capability.
Implications for US policy and compliance
For US policymakers, regulators and corporate compliance professionals, the implications are increasingly material.
First, supply chain resilience cannot be achieved through domestic investment alone. Upstream and midstream segments must be governed in ways that are predictable, investable and aligned with host country development strategies.
Second, regulatory complexity will continue to increase. US companies operating across critical minerals value chains must navigate evolving policy environments in multiple jurisdictions, particularly as resource-rich countries seek to expand domestic value addition.
Third, institutions such as the US International Development Finance Corp. will play a central role in structuring investments that align commercial viability with strategic objectives. This will require closer coordination between public and private actors, as well as a more integrated approach to risk assessment.
Finally, diversification must extend beyond sourcing. It must include partnerships, financing structures and industrial ecosystems. Overreliance on any single geography, whether upstream or downstream, introduces systemic risk that cannot be mitigated through stockpiling alone.
Conclusion
The US has taken decisive steps to rebuild domestic industrial capacity and reduce strategic vulnerabilities. However, the long-term effectiveness of these efforts will depend on how the global supply systems that underpin them are governed.
Critical minerals supply chains are inherently international. Their resilience depends on aligning the interests of producing countries, industrial economies and private sector actors within a coherent and predictable structure.
Closing this governance gap is not optional; it is central to the next phase of US industrial and national security strategy.
Kenneth D. Johnson is principal of Devconia. He is a value chain and private sector development expert with more than two decades of experience spanning global development and advisory institutions, including the African Development Bank, the World Bank Group, PwC and Accenture 
