Briefing

Critical mineral export bans: The impact on buyers

The global scramble to secure access to critical minerals has led to state intervention in the markets in various forms, including export controls and stockpiling. In this article, we consider the impact of export bans on buyers: where export bans are imposed, will buyers still be able to access the material they have contracted for?

What are critical minerals?

Critical minerals are minerals considered to be both (i) essential to a country’s economy, technology, or national security and (ii) subject to major risks to their security of supply.

The definition of “critical” is subjective. Critical minerals tend to be those on which a country is heavily import-reliant and this will vary from country to country. They are often associated with the energy transition and typically include battery metals such as lithium and cobalt. They also often include rare earth metals.

Why are critical mineral contracts susceptible to export bans?

Critical mineral purchase contracts are particularly susceptible to the risk of export bans. This is because available reserves can be concentrated in one country and because producing countries are increasingly incentivised to:

protect their reserves.
ensure strong pricing.
seek to move up the production value chain.

Recent notable examples of export controls or bans include:

For much of 2025, in response to the high level of stock on the market, the Democratic Republic of Congo (“DRC“) suspended the export of cobalt. The DRC is the world’s biggest cobalt producer and accounts for 70% of global supply.

Indonesia has progressively banned the export of raw nickel ore.¹ The policy has been successful in boosting domestic processing. Indonesia is the world’s biggest nickel producer, accounting for approximately 60% of the world’s mined nickel.

Equatorial Guinea is the world’s largest producer of bauxite. Its government is said to be on the brink of announcing plans to curb exports in response to sluggish global pricing. It is also known to be keen to boost its domestic refining capabilities².

China exercises close control over the export of its critical minerals, including by means of export bans. For example, in December 2024, it imposed a ban on the export to the US of germanium, antimony and gallium.

How do export bans affect the broader market?

These policies have a significant effect on the broader market, including the growth in stockpiling because of concerns about security of supply. For some years, China has adopted a strategy of building its critical mineral reserves. As global competition for these resources has increased, other nations are now following suit. For example:

“Project Vault”³ is the USA’s $12 billion strategic critical minerals reserve, designed to secure supply chains for civilian, industrial, and defence needs and reduce dependence on Chinese imports.

Australia’s new Critical Minerals Strategic Reserve⁴ focuses first on antimony, gallium and rare earth elements.

One express aim of the EU’s Critical Raw Materials Act is “the build-up of strategic stockpiles“.⁵

The combined effect of export bans and stockpiling can have a dramatic effect on global supply, particularly where available reserves are concentrated in one country.

What can buyers do if an export ban is imposed?

Given the competition for supply of many critical minerals, it seems likely that ensuring performance by the seller wherever possible is likely to be the priority. For buyers with contracts governed by English law, key questions to consider in the event of an export ban are:

Does this export ban amount to frustration?
Does this export ban amount to force majeure (FM)?
Is there anything else the seller can rely on to refuse to deliver?

Frustration

Export bans might in principle frustrate (and therefore discharge) a contract by making it illegal or impossible for the seller to perform. However, it is hard successfully to rely on the doctrine of frustration because it requires a party to show all of the following:

an event has occurred which was unforeseen when the parties entered into the contract.
the event affects an obligation at the heart of the contract that has now become illegal or impossible to perform, or performance would be radically different.
the inability to perform is through no fault of either party.

In the context of an export ban, a seller’s claim of frustration could be susceptible to challenge, for example on the grounds of foreseeability, or because the ban is likely to be temporary, or because goods could be supplied from elsewhere.

If the contract contains a FM clause which includes export bans, there may not be scope for a claim of frustration in any event: any discharge of the contract would take place under the FM clause and not by means of frustration.

Force majeure

Under English law, a claim of FM is only possible where the contract contains a FM clause. Typically, these provide for temporary or permanent suspension of performance of contractual obligations if certain defined events take place.

The English courts interpret such clauses strictly and the wording of the FM clause therefore requires close scrutiny. There can be scope to resist a claim of FM on a number of grounds. For example, it may be that the provision does not apply to the particular circumstances, or performance has not been prevented, that there has been a failure to comply with time limits, documentary requirements or notice provisions, or a failure to mitigate.

Typically, the key points to consider are:

Is the seller really prevented from performing because of the export ban?
Is there an alternative means of performance (can the goods be sourced elsewhere)?
Is the inability to perform temporary and will the obligation to deliver kick back in if and when the ban lifts?
What relief does the clause offer and for how long?
Has the seller complied with any notice requirements?
Has the seller tried to mitigate?

Given that the DRC dominates the global supply of cobalt, last year’s export ban saw sellers claiming that they were prevented from fulfilling their contractual obligations. For a hypothetical sale contract on an FCA DRC basis, those claims might have some force. However, for sale contracts on EXW China terms, for example, there was significant scope to push back – on the basis that the seller could source the cobalt elsewhere and still perform the contract.

This was the case in Agrokor AG v Tradigrain SA⁶, where the seller intended to supply goods originating from a particular country whose authorities then prohibited the export of goods of the contractual description. It was held that the description left it open to the seller to supply goods from other sources.

Other considerations

Brands

One feature of certain commodity markets is the use of brands. Some contracts provide for the sale of critical minerals of “XYZ” brand. This can be a complicating factor where that brand only sources from a country subject to an export ban. Nevertheless, the seller would still need to show that no existing stock of the branded product was available to purchase in the market. It is important to note that a seller is not obliged to perform by non-contractual means. For example, if the contract requires cobalt of “XYZ” brand, a buyer cannot insist on delivery of cobalt of “ABC” brand.

Delivery period

In Ross T Smyth & Co Ltd v WN Lindsay Ltd⁷, the Court held that the seller was not excused by an export prohibition. The relevant ban was announced ten days before it came into force. The seller could have shipped within those ten days – even though it might have intended to ship later during the shipment period.

Illegality clause

If the contract contains an illegality clause, this might allow the parties to terminate in the event that it becomes illegal to perform. For example, clause 14.10 of SCoTA⁸ would apply to sales of coking coal which, in some jurisdictions such as the EU, is considered a critical raw material.

Conclusion

Export bans are likely to remain a feature of critical minerals markets going forward. Careful drafting of relevant contractual provisions, in particular FM provisions, can allow for clear allocation of risk in the event of an export ban, maximise the options for performance to go ahead and reduce the risk of disputes arising. Where disputes do arise, buyers should take legal advice early on, in order to assess their exposure accurately and where possible, to ensure performance of the contract even where supply may be tight.

Footnotes