The complex era of heightened geopolitical tensions affects every actor, firms included. Firms pursuing profits are caught in a situation where they have to pick sides, face export restrictions, or deal with state interference aimed at aligning firm objectives with the geopolitical goals of states. Firms are not uniform, however. They have different ownership structures and operate in different jurisdictions, and they therefore have different propensities to align, or not to align, with state geopolitical goals.
In this section, we compare three critical mineral processing firms in China, the US, and Indonesia and how these companies navigate different conditions. In China, state control is more direct, as most of the firms are state-owned. In the United States, economic statecraft relies on different tools, and while state involvement might not be direct, the government can still shape supply chains. While the first two are caught in a great power rivalry, Indonesia offers another context. As a non-hegemonic power and developing country, it offers an interesting case for examining how firms upgraded within the nickel processing value chain and how they dealt with external pressures.
We compare them along three dimensions: the mode of alignment each state uses, the ownership structure, and what firms give up in return. The mechanism differs across the three, but the underlying goal is the same: to shape firm behaviour toward the national interest. Across all three, the common thread is that firms gain market position but lose independent decision-making.
China Commanded Alignment – China Rare Earth Group
China Rare Earth Group operates in a country where the relationship between firms and state geostrategic goals is designed to enable a stronger alignment. Established in December 2021 in Ganzhou by order of the State-owned Assets Supervision and Administration Commission (SASAC), it merged the rare earth assets of China Minmetals, Chinalco, and China Southern Rare Earth Group with two state research institutes. The conglomerate now controls the majority of China’s rare earth supply. Given that, from the state perspective, the commercial and the geoeconomic logic are the same: the control of these elements gives China an advantage in great power competition. Hence, commercial interests are secondary to the geoeconomic leverage that this firm gives to the state. The creation of this conglomerate can be understood in economic terms, reaching economies of scale, making operations more efficient and more competitive globally. At the same time, the creation of this company led to better control over the production and export of rare earth minerals by the state, making it an instrument of economic statecraft. Since April 2025, medium and heavy rare earths require China Ministry of Commerce licenses, and the October 2025 expansion added extraterritorial "foreign direct product".
The creation of a conglomerate might put the firm in a stronger position globally, but this comes at the expense of losing the power for independent decision-making. The downside of it is that the future of the company depends substantially on the government's priorities.
USA Incentivised Alignment – MP Materials
MP Materials reveals a different mechanism. The company operates the only rare-earth mine in the United States and has invested heavily in domestic processing and magnet production. Yet, it remains exposed to a market dominated by China, where oversupply can quickly drive prices lower and squeeze competitors. Facing challenges and risks in 2025, the US Department of Defense acquired a significant stake in the company, provided financing, and helped with long-term firm stability.
The acquisition reflects a broader government strategy in the critical mineral industry. When minerals are seen not only as commodities but also as strategic assets, the state and private relations might shift abruptly. Government as a shareholder influences long-term priorities. A similar situation with China Rare Earth Group appears: the company enjoys a better market position facilitated by government intervention, but at the same time becomes more limited in terms of independent decision-making.
Indonesia: The Case of a Middle Power Upgrading
Indonesia plays a different game entirely. This is not great power economic statecraft but an actively developing state using resource leverage to climb the value chain. The 2020 ban on raw nickel ore exports, anchored in the 2020 Mining Law and the wider downstreaming agenda, made onshore processing the only lawful way to benefit from the country's reserves. This resulted in Indonesia accounting for roughly 60% of global nickel supply, led by Harita Nickel.
Harita is an example of how a company could quickly benefit from a changing regulatory environment due to geopolitical challenges. Following the government decisions, the company responded aggressively by expanding the facilities capable of producing high-value nickel products, but success came with a new dependency. Much of Indonesia's downstream nickel industry has been financed with Chinese capital, supported by Chinese technology and connected to Chinese customers. As a result, Harita's growth strategy has become closely linked to China's role in the global battery industry. Harita's downstream growth depends heavily on China, yet Indonesia preserves its independence upstream by restricting exports of unprocessed ore.
What these stories reveal
The experiences of these three companies in three different environments show that, in general, there is a tendency for states to align their domestic firms’ goals to the national interests. In a highly geoeconomically competitive era, companies can not simply function as profit-maximising entities. The increased level of intervention, especially in strategic sectors, is limiting the firms’ manoeuvring capabilities. Harita Nickel's growth also shows how firms can benefit when resource-rich middle powers use their minerals strategically. Indonesia's nickel policies increased the country's leverage in global battery supply chains, creating opportunities for firms such as Harita to attract investment and move into higher-value processing.
