NATO's critical raw materials list: legal and strategic stakes for the defence industry
The publication of NATO's list of 12 strategic critical materials highlights the vital importance of these resources for advanced defense technologies. Amid rising trade tensions between China and the United States, these materials have become strategic assets, directly affecting European, and particularly French, defense companies.
1. Interdependence under pressure: NATO and cross-sanctions
Rare minerals, such as gallium, germanium, and rare earth elements, are indispensable to modern defense technologies due to their unique physical and chemical properties. These materials are critical for manufacturing high-performance components used in advanced systems, including fighter jets, submarines, and precision-guided munitions. Their role extends to emerging technologies like AI-enabled platforms and renewable energy systems, which increasingly underpin military innovation.
China’s near-monopoly on the extraction and refinement of these minerals—controlling over 80% of global rare earth production—poses a significant strategic vulnerability. By leveraging its dominance, China has demonstrated a willingness to impose export restrictions as a geopolitical tool, as evidenced by its recent bans on key materials targeting U.S. supply chains.
Over the past decade, economic sanctions have played a central role in the strategic rivalry between China and the United States, a trend that is accelerating. The U.S. has adopted a proactive approach aimed at restricting China’s access to critical technologies, particularly in semiconductors. The recent addition of 140 Chinese entities to its blacklist reflects a deliberate strategy to curb China’s technological growth, perceived as a threat to U.S. national security.
In response, China has intensified its export restrictions on critical materials such as gallium, germanium, and antimony, essential for high-tech industries. For the first time, these restrictions have specifically targeted the U.S., marking a turning point in escalating trade and technological tensions. These actions underscore the strategic interdependence between the two powers and highlight the global repercussions of this conflict on supply chains, including those of NATO members.
This dependence on a single supplier heightens the risks of disruption and underscores the urgency for French defense companies to diversify sourcing, invest in recycling technologies, and collaborate on EU-wide initiatives to reduce reliance on Chinese-controlled supply chains.
2. Implications for French defense companies
a) Supply chain vulnerability
The cross-sanctions between China and the United States exacerbate tensions in global supply chains. French companies, heavily reliant on imports of critical materials, must adopt strategic foresight to prevent potential disruptions to their industrial capabilities in defense. While immediate supply disruptions are unlikely, current tensions underline the necessity of anticipating risks and strengthening supply chain resilience.
b) Necessity of diversification and innovation
Diversification and innovation are now imperatives for addressing fragile supply chains and reducing reliance on external suppliers. Supply chain resilience hinges on anticipating crises while mitigating geopolitical and economic risks tied to concentrated sources of critical materials.
Supplier diversification: Collaborate with companies specialized in the extraction and refinement of critical materials, prioritizing those with established capabilities and compliance with international standards, particularly in Africa and Asia, to secure sustainable and tailored supply chains for defense industries.
Alternative technologies: Accelerate investment in research and development to create substitutes or recycle critical materials.
European coordination: Strengthen collaborations within the European Union to establish robust and resilient supply chains.
c) Mastery of the legal framework
Navigating an increasingly complex regulatory environment has become a strategic imperative for defense companies. Cross-sanctions between major powers demand swift and precise adaptation to new legal obligations. Ensuring compliance with often divergent regulations between geopolitical blocs is essential to avoid supply chain interruptions or secondary sanctions.
Companies must:
Implement enhanced legal monitoring: Track changes in U.S., European, and Chinese regulations in real time to anticipate operational impacts.
Adapt contracts: Include clauses to mitigate operational impacts stemming from regulatory changes.
Train teams: Enhance the skills of legal and export control teams through specialized training on international regulations and cross-sanctions, ensuring effective and proactive compliance.
3. Collaboration with administrations and institutional actors
To ensure the security of critical material supplies, French defense companies must strengthen cooperation with national administrations and specialized institutions. In particular, the Bureau of Geological and Mining Research (BRGM) plays a central role in identifying and securing strategic resources.
This collaboration can include:
Information sharing: Actively participate in BRGM-led initiatives to map risks and identify reliable alternative sources.
Joint projects: Partner with public bodies to develop innovative solutions, particularly in recycling and technological substitutes.
Coordinated advocacy: Work with relevant ministries to influence European policies on critical materials and strengthen France’s position in international negotiations.
A coordinated approach between companies and public institutions is essential to anticipate crises, reduce dependencies, and ensure the long-term resilience of supply chains.
Conclusion
The publication of NATO's list underscores the vulnerability of supply chains in a context of heightened geopolitical tensions. The cross-sanctions between China and the United States highlight the urgency for French defense companies to reassess their strategies and strengthen their industrial autonomy. By working closely with national and European institutions, they can bolster their resilience by securing supply chains and investing in innovative solutions to address current strategic challenges.