Energy, Data and Power: the New Geopolitical Chessboard of the Energy Transition

In a world where Energy has become simultaneously an instrument of power and a factor of vulnerability, critical minerals are emerging as the new arena of strategic competition among global powers. With China dominating more than 90% of the refining stages and the manufacturing of permanent magnets — essential to the Energy Transition and Artificial Intelligence — Energy Security is no longer merely a technical matter, but has asserted itself as a central issue of Foreign Policy and economic sovereignty.

In the current geopolitical context, marked by rising tensions, critical minerals have rapidly ascended the diplomatic and Foreign Policy agenda, particularly within the European Union and the United States, becoming a central element of Geopolitics and International and Energy Security. For several years, the International Energy Agency (IEA) has warned of the risks associated with the high concentration of critical mineral supply chains, especially in the processing and refining stages.

The Global Critical Minerals Outlook 2025 (IEA, 2025) showed that, in 19 of the 20 most important strategic minerals, China is the leading refining country, with an average market share of 70%. This concentration has intensified in recent years, thereby highlighting vulnerabilities to shocks and disruptions. The supply of rare earth elements remains one of the least geographically diversified among all critical minerals. In the case of rare earths used in permanent magnets for various industries — namely neodymium, praseodymium, dysprosium and terbium — China accounted for approximately 60% of global mine production in 2024, followed by Myanmar, Australia and the United States. Chinese dominance is even more pronounced in the separation and refining stages, representing around 91% of global output, with Malaysia emerging as the second-largest producer, albeit far behind.

Moreover, China has significantly strengthened its position in the manufacturing of permanent magnets containing rare earths — components that retain their magnetic properties without the need for external Energy. Two decades ago, China accounted for around 50% of the production of sintered permanent magnets, widely used in automobiles, wind turbines, industrial motors, data centres and defence systems. Today, this share has increased to 94%, making China the world’s largest supplier of a critical component for the Energy Transition, Artificial Intelligence and International Security.

This concentration represents not merely an economic imbalance; it also constitutes a strategic vulnerability for the global value chains underpinning the Energy Transition and the digital economy.

In the context of International Relations, where Energy constitutes not only a strategic asset but also a channel of cooperation and, at times, a trigger for Geopolitical disputes, Energy Security must be conceptualised as a multidimensional concept. Ensuring its long-term viability therefore requires an integrated and holistic approach encompassing technical, economic, political and environmental dimensions, capable of mapping supply and production chains, the various associated technologies, the interconnections among Energy sources, conversion processes and existing and planned infrastructure.

This gives rise to the need — and urgency — for a holistic approach to Energy Planning that also integrates Geopolitical, Geostrategic and International Security dimensions. Decision-support tools and predictive models can play a fundamental role in this vision, drawing extensively on the capabilities of Machine Learning and Artificial Intelligence.

These technologies make it possible to anticipate risk scenarios, optimise the balance between supply and demand, and strengthen the resilience of Energy Systems against external threats — whether cyberattacks, supply chain disruptions or Geopolitical fluctuations. By integrating these dimensions in a coordinated manner, decision-makers will be able to design more robust and adaptive energy policies capable of reconciling security, sustainability and competitiveness within an increasingly interconnected and vulnerable global framework.

Ultimately, Energy Security is no longer merely a matter of supply and infrastructure: it is now a pillar of sovereignty and international stability. The new Geopolitics of Energy is being played out as much in lithium and rare earth mines as in the algorithms that manage power grids and data centres. More than ensuring Energy supply, the challenge is to secure strategic autonomy, economic resilience and decision-making capacity in a rapidly transforming world. Energy is — and will continue to be — an instrument of power and of the future.

Original portuguese article published in Jornal Económico