As the global economy scrambles to acquire the essential minerals required for clean energy technologies, an ancient industry is once again turning into gold: resource nationalism. From Latin America to Africa and parts of Asia, countries rich in lithium, copper, and cobalt are reasserting control over their natural resources through higher royalties, export restrictions, and even outright nationalization.
Canada, in particular, has become the center of a geopolitical chess game, with some of the world’s largest mining companies and a legacy of being the global leader in mining exploration financing. The ramifications are widespread for investors, industry operators, and policymakers in this fragmented economy.
“Resource nationalism is a strategic reality,” says David Birkenshaw, Managing Director of Birkenshaw & Company Ltd., a Toronto mining investment company with several years of experience in capital markets. “The battle for control of supply chains has recast how countries value their resources and how investors weigh political risk.”
In recent weeks, actions taken by governments in Chile, Mexico, Indonesia, and the Democratic Republic of Congo, all holders of critical supplies of energy-transition minerals, have been flashing warning signs for multinationals. Tighter local ownership laws and changing tax regimes are causing companies to reconsider how and where they operate.
Meanwhile, the Canadian government has also made its move to ensure access to strategic resources at home. In 2022, Ottawa ordered three Chinese companies to sell off Canadian lithium holdings on national security grounds. That decision has been a turning point in how foreign investment is vetted in the country’s critical mineral sector.
“Canada is treading a dangerous line. We need to draw foreign capital to develop our resource base, but we also need to protect national interests and develop robust supply chains. Reconciling those two priorities is the hardest task right now,” says Birkenshaw.
Both the future of Canada’s mining sector and its future role in the global clean tech economy are at stake. As the world shifts to electrification (electric vehicles, renewables, and battery storage), demand for critical minerals is expected to skyrocket. The International Energy Agency believes demand for lithium alone could increase by a factor of 40 times by 2040.
Against this backdrop, global capital is becoming more cautious. Institutional investors and private equity firms are factoring geopolitical risk into their due diligence processes. Factors such as political stability, regulatory transparency, and ESG (environmental, social, and governance) compliance are also critical to risk control.
“Investors are adjusting their models. In the past, a large deposit in a developing country would have been sufficient to justify the risk. Now, they’re seeking places with legal predictability, good infrastructure, and access to skilled labour. Canada still does well on those measures, but we should not take that for granted,” says Birkenshaw.
Some industry observers fear that rising resource nationalism could fuel a version of economic decoupling, splintering global markets and slowing the transition toward cleaner forms of energy. Others suggest it might encourage more regional self-sufficiency and fairer resource development.
What is clear now is that the age of cheap, frictionless access to raw materials is over. Mining companies are also being pressed to invest more money in local communities, work within tighter environmental constraints, and forge partnerships that transfer more benefits to host nations.
“Smart institutions will see this as an opportunity to help build trust and long-term value. The days of extract-and-exit are numbered,” Birkenshaw concludes.
As governments push to assert their authority over critical minerals, diplomatic skill will become just as important as technical expertise. In this evolving environment, firms like Toronto’s Birkenshaw & Company Ltd. have an opportunity to lead in production alongside their governments and set a global standard for responsible resource development.
