Gaining Power By Losing Money

We often assume that a dominant system of supply chains simply provides more materials. In critical minerals, the monopoly of supply chains can shape the price environment that every other producer, processor, investor, and government must operate within. When one supply chain expands production and processing capacity at a scale others cannot match, it does not merely compete in the market; it can influence the market’s basic conditions. Prices shaped by large volume can decide which projects look financeable, which investors stay interested, and which alternative supply chains struggle before they mature — or die before they begin. In that sense, dominance is not only measured by how much mineral supply is produced, it is measured by the ability to set the economic conditions under which others must compete.

The annual reports on nickel show how this mechanism works. Indonesia’s mined nickel production surged from 780,000 tons in 2020 to 2.3 million tons in 2024, raising its share of global supply from 30% to 70%. That expansion was built heavily through Chinese investment and processing capacity, and it helped create the oversupply that pushed prices down and pressured producers elsewhere. The point is not simply that more nickel entered the market. The point is that such concentrated expansion changed the market conditions for everyone else. A dominant supply system can create enough volume to affect price, investment confidence, and the survival of competing supply chains. The deeper danger is not only that existing producers suffer when prices fall. It is that future supply becomes harder to finance before it is ever built. A mine, refinery, or processing facility may be strategically necessary, but if the pricing environment makes the project look uneconomic, capital hesitates. Investors wait, lenders pull back, offtake agreements become harder to secure, and timelines stretch. This is how price pressure can weaken tomorrow’s supply.

Strategic importance does not automatically make a project bankable. A mine, refinery, or processing facility can be politically necessary, industrially important, and still financially unattractive under depressed prices. Capital does not move because a material appears on a critical minerals list. It moves when a project can justify risk, cost, timeline, and return. This is the contradiction at the center of critical minerals policy: a project can be strategically essential and commercially impossible at the same time. Western countries’ policies have started admitting this pricing problem. Price floors, trading blocs, and price-support discussions are not emerging because governments suddenly want to manage commodity markets. They are emerging because ordinary commodity pricing is not delivering the kind of supply security governments say they need. If critical minerals are strategically essential but priced in a way that discourages new capacity, then price is no longer just an economic signal. It becomes a strategic pressure point — one that can decide whether alternative supply chains are built, delayed, or abandoned.

The question is not whether governments should interfere to create a fair market. The question is whether a fair market exists in critical minerals at all. If dominant producers benefit from state-backed financing, processing control, scale, and the ability to withstand weak prices, then alternative supply chains are not entering a neutral arena. They are entering a market whose conditions have already been shaped by concentrated power. In that environment, doing nothing may look like neutrality, but it can leave new supply chains exposed to pricing conditions they did not create and cannot survive. A government may believe it is letting the market work, when in reality it is allowing the strongest existing system to keep defining the terms of competition.

In ordinary markets, losing money usually signals weakness. In critical minerals, it can become a source of leverage if one actor can endure weak prices longer than everyone else. The ability to carry low margins, maintain production, and outlast competitors can shape the entire market. This is where losing money becomes the weapon: not because losses are desirable, but because endurance under pressure can decide which supply chains survive long enough to matter.