Three overlapping crises, a Middle East war, China's sulfuric acid export ban, and the EU's scramble to build a joint procurement platform, have converged on a single, underappreciated vulnerability: the industrial chemicals that sit between ore in the ground and metal in a battery. This analysis traces how these developments expose the midstream processing chain as the real point of fragility in Western critical mineral strategy, and asks whether current policy responses are equal to the scale of the problem.
Introduction
Here is a useful way to think about what has happened to critical mineral supply chains over the past two months. Imagine a factory that produces the components inside electric vehicles, wind turbines, and defense electronics. Most attention focuses on whether the raw ore arrives at the front gate. Very little attention is paid to the solvents, acids, and reagents required to turn that ore into usable metal inside the factory itself. Now imagine those chemicals suddenly become unavailable from two directions at once.
That, in practical terms, is where the global critical minerals industry finds itself today. The closure of the Strait of Hormuz, following the outbreak of the Iran conflict on February 28, severed roughly half of seaborne sulfur trade at a stroke. Sulfur is the feedstock for sulfuric acid, which is the workhorse chemical of copper, nickel, cobalt, and uranium production worldwide. Then, on April 10, China confirmed it would halt exports of sulfuric acid from May 2026 onward, pulling away the largest alternative source of supply just as buyers were scrambling for it.
The consequences are already visible in the places that matter most. Miners in the Democratic Republic of Congo have been forced to cut chemical consumption and contemplate output reductions. Copper producers in Chile are absorbing a 44 percent price surge for acid in a single month. Indonesia's nickel sector, which expanded aggressively on the assumption of cheap chemical inputs, faces costs rising 40 to 60 percent above pre-ban levels. Against this backdrop, the European Union launched a joint critical minerals procurement platform on April 13, a significant institutional step, but one that critics argue treats symptoms rather than causes.
The connecting thread across all three developments is the same one I examined in my April analysis of processing bottlenecks: the binding constraint in critical mineral supply chains has never been the ore in the ground. It is the capacity to process it, and the chemicals required to do so.
Two Disruptions, One Vulnerability
To understand why these events hit so hard, it helps to know what sulfuric acid actually does in mining. In heap leach operations, which account for roughly 20 percent of Chilean copper output, crushed ore is stacked on lined pads and continuously irrigated with a dilute acid solution. The acid dissolves copper from the rock over weeks or months, and the resulting solution is processed to recover the metal. Stop the acid, and you do not slow the process. You stop it entirely. There is no workaround.
The Strait of Hormuz is the world's most important corridor for sulfur exports. The Middle East accounts for around 24 percent of global sulfur production, and 50 percent of seaborne sulfur trade passes through that single waterway. When the conflict began and the strait was effectively closed, sulfur prices surged nearly 70 percent in March alone. The downstream effect on acid prices was immediate and severe. As CERA analysts noted in an April 13 report, what is usually a low-profile industrial chemical was suddenly acting as a binding constraint across both agriculture and metals processing.
China's ban was not a response to the conflict. It was driven by Beijing's own food security logic. Sulfuric acid is a precursor to phosphate fertilizer, and China had already been systematically restricting agricultural chemical exports since December 2025, including phosphate fertilizers and nitrogen-potassium blends. With spring ploughing approaching and China running its own sulfur import dependency above 50 percent, the NDRC chose to repatriate export-bound supplies to the domestic market. The timing, landing just as Hormuz dried up the alternative source, was not coordinated. It was simply catastrophic in its coincidence.
The numbers tell the story plainly. In 2025, China exported 4.65 million tonnes of sulfuric acid, a 73 percent surge that made it the world's largest exporter. Chile alone imported more than one million tonnes from China annually. In March 2026, China shipped zero sulfuric acid to Chile for the first time since July 2023. The reversal from record exports to a near-total ban is not a temporary adjustment. It is a structural shift that leaves buyers with no comparable alternative source and no near-term substitution pathway. New acid capacity requires 18 to 24 months to permit and ramp up.
The DRC and the Reality of Midstream Dependency
The Democratic Republic of Congo produces more than half of the world's cobalt and is Africa's largest copper supplier. Its mining operations, including those run by CMOC, Glencore, and Eurasian Resources Group, have been operating on what analysts describe as razor-thin logistical tolerances even in stable conditions. The Iran conflict has pushed those tolerances past their limit.
In recent weeks, miners have had orders for key leaching chemicals cancelled or withdrawn by suppliers. The response has been to cut chemical consumption to extend existing stockpiles, and in some cases to consider producing off-specification material or reducing cobalt output entirely. Transport premiums through the Dar es Salaam corridor have nearly doubled since the conflict began, and delivery timelines for chemical inputs have stretched from three months to as long as six. Miners currently hold 60 to 90 days of inventory. If disruptions extend past June, Goldman Sachs models up to 125,000 tonnes of copper output at risk in the DRC corridor alone.
This is worth pausing on. A war in the Middle East, operating through a chain of sulfur feedstock shortages, shipping disruptions, and transport cost spikes, is now directly threatening cobalt output in central Africa. The causal chain runs from Tehran to Kinshasa via industrial chemistry. It is a concrete illustration of a point that supply chain analysts have made in abstract terms for years: the processing chemical supply chain is not a logistics footnote. It is the single point of failure.
Zambia's own export ban on sulfuric acid in September 2025 had already tightened regional supply before either the Hormuz closure or China's ban. The current crisis is therefore not a sudden shock landing on a healthy system. It is a tipping point reached by a system that was already under cumulative stress. The DRC's reported move toward strategic mineral stockpiling, essentially applying OPEC-style supply management logic to cobalt and copper, signals that resource-holding nations are drawing their own conclusions about what this environment means for their negotiating position.
China's Strategy and the West's Structural Gap
It would be a mistake to treat China's sulfuric acid ban as simply an opportunistic move. It fits within a pattern that has been building for years. Beijing has imposed successive export controls on gallium, germanium, graphite, phosphate fertilizers, and rare earth compounds. Each restriction has been framed in domestic policy terms, food security, national resource conservation, value-added export promotion, while effectively tightening China's grip on downstream supply chains elsewhere.
As Jack Lifton, Co-Chair of the Critical Minerals Institute, put it when describing China's controls on the chemicals used to extract rare earths from ionic clays: the industry is not short of resources. It is short of chemistry. That framing applies with equal force to sulfuric acid. China controls roughly 70 percent of global refining capacity for 19 of the world's 20 most critical minerals, including over 90 percent of gallium, graphite, and rare earth processing. The acid ban extends that leverage into the upstream extraction stage, not just the refining stage.
What makes China's position structurally durable is not simply its scale. It is the integration. Chinese smelters produce sulfuric acid as a byproduct of processing copper and zinc ore. That acid is then sold domestically or exported to support further processing operations. Chinese firms can absorb losses at one stage because they recover margin at another, a model that Western firms operating in fragmented, separately financed stages of the value chain cannot replicate. As Adam Webb of Benchmark Minerals has noted, Chinese firms can run mines or processors at a loss if profits are recovered later in batteries or electronics. Western capital markets do not work that way.
The antimony situation underlines the same structural problem from a different angle. Canada classifies antimony as a critical mineral, but the country still lacks a specific policy framework to move projects from exploration to funded processing. The Iran conflict has sharpened focus on antimony's role in munitions, flame retardants, and military-grade alloys, with China having banned exports to the United States after tightening controls in 2024. Ottawa has reaffirmed broad critical minerals funding of more than C$3.6 billion, but as Canagold Resources CEO Catalin Kilofliski observed, Canada does not have an antimony-focused strategy. It is lumped within the general critical metals bucket. Even if new Canadian mines advanced, North America still lacks a processing route for antimony concentrate. The pattern is consistent: upstream announcements, midstream gap.
The EU Platform: Necessary but Not Sufficient
Against this backdrop, the EU's April 13 launch of its joint critical minerals procurement platform deserves a measured assessment. The platform, developed at a cost of nine million euros and built under the RESourceEU strategy, is designed to aggregate purchasing power across member states, connect buyers with suppliers and financial backers, and reduce the bloc's dependence on any single country for more than 65 percent of its strategic mineral needs. The first round of matchmaking focuses on rare earths, battery materials, and defense inputs, with results to be announced in September 2026.
This is a genuinely significant institutional development. The EU's Critical Raw Materials Act set out binding 2030 targets: 10 percent of annual needs mined domestically, 25 percent recycled, and 40 percent processed within the bloc. The procurement platform is a tool designed to accelerate progress toward those targets by giving European buyers collective weight in negotiations with suppliers. A parallel EU-US critical minerals partnership, formalized through a memorandum of understanding in April 2026, adds a transatlantic dimension to that strategy.
But the critics raise a legitimate concern. Centralized procurement can secure short-term supply, particularly by aggregating demand signals strong enough to unlock project finance. What it cannot do, on its own, is build the refining and processing infrastructure that represents the real bottleneck. As Viet Nguyen-Tien of the LSE's Centre for Economic Performance has argued, subsidies for mines will help but will not be sufficient. Displacing China's processing dominance requires sustained targeted support for midstream refining, investment in skills and research, allied coordination on demand and offtake, and serious recycling infrastructure. None of that is delivered by a matchmaking platform, however well designed.
The deeper risk, flagged by Lifton and others, is that centralized procurement may distort price signals in ways that undermine the private capital formation needed for long-term supply chain investment. If governments become the dominant buyer and set the terms of trade through procurement platforms, the investment logic for private midstream capacity becomes harder to model. Strategic project selection under the Critical Raw Materials Act also still lacks clarity on financing structures and risk-sharing mechanisms. In the absence of credible long-term demand signals such as price floors or guaranteed offtake, it remains uncertain how effectively project finance can be mobilized for the refining and processing assets that are actually needed.
What Comes Next
The immediate horizon is straightforward to describe, if uncomfortable to contemplate. As the May 2026 deadline for China's acid ban approaches, global buyers are expected to begin panic-buying, driving prices higher still. The DRC's 60 to 90 day inventory buffer means that decisions about output cuts will need to be made by June. In Chile, heap leach operators are absorbing cost increases of at least 50 cents per pound of copper at SX-EW operations, a significant margin compression in a market that had already been modeled with a thin surplus. Goldman's pre-crisis projections of a 490,000 to 616,000 tonne copper market surplus are being cut nearly in half by potential supply disruptions, shifting the market from comfortably balanced to fragile.
Over a longer timeframe, the structural gap will not close quickly. Building new sulfuric acid capacity takes 18 to 24 months under favorable permitting conditions. Building competitive midstream mineral processing capacity in the West takes considerably longer. Kazakhstan's state uranium producer, Kazatomprom, has been constructing a dedicated 800,000-tonne acid plant to reduce import dependency, a model that illustrates both what is possible and how long it takes even for a state-backed actor with a clear strategic rationale.
The most consequential question is not whether Western governments understand the midstream problem. After the events of the past several months, it is difficult to argue that they do not. The question is whether the policy frameworks being deployed are matched to the actual nature of the challenge. Procurement platforms, mining permits, and bilateral memoranda of understanding are useful tools. But as the situation in the DRC makes clear, the chain can break not at the mine or the battery factory, but at the industrial chemical depot in between. Closing that gap requires the kind of vertically integrated, long-horizon investment that China began making decades ago. The EU platform launched this month is a step in a necessary direction. Whether it leads to the midstream infrastructure that would actually matter is a question the September results will begin, but only begin, to answer.