Last night I went to see a talk delivered by Tim Marshall, a British journalist, author, and broadcaster, specialising in foreign affairs and international diplomacy. 

Just like all our personal journeys in life, we never know what good or challenging event, is around the corner, but invariably what we do know is that change is guaranteed. 

We are seeing change in a new world that Trump is trying his best to accelerate (and to some degree winning), one where Europe can no longer be the remora fish under the fin of the U.S – where we are seeing tariffs, new geopolitics such as Trump trying to buy Greenland (a position that seems ludicrous but actually makes sense from a self-preservation perspective considering their abundance of natural resources), and where Tech/AI are all changing the way in which we do business and the politics that drive it.

So, what do critical minerals have to do with anything and how is their geography impacting the PE, restructuring and insolvency landscape? Well thanks to my newfound admiration for Mr Marshall, I have a rough idea:

1. The resource map is changing — and with it, investment risk

The new era of critical minerals, that is to say, the elements that make up components of technology (and therefore economies) and national security as well as Electric Vehicles (“EVs”), rechargeable batteries and AI data centres – all contain lithium, copper, cobalt, nickel and other rare earth minerals — and this has shifted global supply chains into geopolitically exposed regions:

• Lithium: dominated by Australia and South America’s “Lithium Triangle”
• Cobalt: 70%+ from the Democratic Republic of the Congo
• Rare earths: over 80% refined in China
• Copper: concentrated in Chile and Peru with some presence on the west coast of North America.

Why does this matter? This concentration introduces sovereign, ESG, and trade policy risk at the foundation of entire industries: EVs, batteries, AI data centres, and renewable power infrastructure. 

Moreover, it overleverages specific relationships, both commercially and politically. This further adds to a risk profile that makes investment (and failure) more binary. 

The below illustrates a resource map and the key risk factors associated with the area:

With this backdrop we can start to look at how the geographical elements influence financial risk.

2. Volatile prices + leverage = new restructuring triggers.

Many ‘new economy’ businesses like battery start-ups, junior miners, and cathode refiners (impure metals being purified), were financed on the back of bullish pricing terms when the cost of money was cheap. These terms were at a time when demand for resources like lithium was on the rise.

• For example, lithium spot prices crashed by >80% in 2023–24 before partially recovering. This was because EV sales slowed down, and increased production in mining lithium products (due to the preceding years growing demand), which in turn lead to oversupply and downward price pressure.  
• The result was largely liquidity crunches, covenant breaches, and working capital shortfalls which all meant that smaller, and start-up businesses, hit a restructuring crisis.

A note on covenant breaches – Most debt financing agreements would have been completed at a time when money cost less, with new interest rates, and higher cost of borrowing – amend and extend or debt restructuring may also be the straw that breaks the camel’s back for some small mining and tech companies unable to service debt and interest repayments. 

For PE - commodity price volatility is now an operational risk that can trigger sudden distress, even in growth companies with strong demand. In turn, this will likely see an already increasing demand for restructuring and insolvency professionals’ knowledge and experience. 

Metaphorically speaking, there are multiple rocks being dashed in the water, with the ripple effects being felt far beyond the naked eye. 

Recent examples of this between 2023–25 include:

• Britishvolt (UK battery start-up): pre-pack after failed funding round due to cautious investment appetite given the market volatility in lithium price indexes.  
• American lithium junior: chapter 11 post price collapse, assets sold to Asian cathode maker.
• Northvolt (Sweden): cost overruns; sovereign-backed refinancing kept out of court.
• Rare earth processors outside China: strategic buyers appeared after Chinese export controls. 

3. Friend-shoring creates new winners and stranded assets

Governments (US, EU, Canada, Japan) now push to “onshore” critical mineral processing and battery production. This has been supercharged by Trump. This means:

• New capital flows into domestic refining, battery recycling, and local gigafactories (large scale factories for the use of mass battery production).
• Older offshore processors or China-dependent assets risk becoming non-compliant or economically obsolete due to increased cost of production and exhausting supply (such as oil and gas in North Sea or a reducing demand base).

So, the world of Tech and AI is driving business towards new shores and driving new behaviours creating bigger voids and threats to previously very stable investments. This in turn creates opportunities for some and risk for others:

1. What's the PE opportunity? They could acquire or recapitalize onshore assets that qualify for subsidies and diversify or aggregate assets on their investment books. This would be challenging given the current exit market and inability to sell on buy and builds (again impacted by Trump’s political unpredictability). 
2. What’s the restructuring risk: The risk will be balance sheet write-downs or distress in legacy offshore facilities forcing private credit and PE into amend and extend, moth balling or crystallising losses and instructing insolvency professionals. Unless sovereign wealth funds come to the rescue.

What about other, historically less obvious and tangible factors?  

4. Environmental, Social and Governance - compliance shift from marketing to real risk

• Supply chain due diligence now includes human rights, water usage, tailings management (safely and ethical disposing of mining waste), and carbon footprint. 

A note on carbon footprint – we are seeing live issues with declining demand for carbon capture, with start-ups backed by private credit and PE having to hedge risk and wind-down/liquidate operations. 

• Failures can create contingent liabilities and reputational crises, triggering liquidity events and accelerated maturities.

This all means that restructuring plans increasingly need to be embedded with ESG remediation and stakeholder engagement to preserve asset value. In other words – eyes open, ears listening, and mind open to adapting to what is going on to the evolution unfolding around us. 

Points 2, 3 and 4 can be summarised in simple terms:

• Volatile prices → liquidity & covenant risk.
• ESG breaches → hidden liabilities.
• Supply chain shifts → stranded offshore assets.

So, as I discovered last night – there is more to geography than I learnt in school! But the effects don’t end there. 

5. New buyers & exits: strategics chasing security

Automakers and tech giants (Tesla, VW, Apple, Microsoft) have become direct investors or distressed business buyers. What gives them the edge over other special situation debt funds is that their motive is not based on Initial Rate of Return, but supply security. 

This is likely going to change valuation dynamics and exit strategies for PE in times to come (if not already) and certainly will for the large cross-boarder players.

6. Practical implications for PE & restructuring teams

The reality is because of the simple geography, and the lottery of where resources reside across the world, there are immediate and direct impacts on PE and restructuring teams generally.

1. They will need to add commodity and geopolitical scenario analysis to diligence for downside risk protection.
2. It will be incumbent on them to map exposure to single-country or single-commodity supply chains. Take the tariffs imposed on lithium imports in the U.S (50% currently). On the face of it reckless when the supply of lithium is so narrow in terms of countries able to deliver. 
3. Identify assets that could qualify for friend-shoring incentives or battery passport compliance – Apple seems to already be doing this well having signed long-term cobalt supply deals with Congo, and invested in recycled rare earths in the US.
4. In restructurings, expect strategic buyers with supply motives and faster timelines.

The critical minerals transition is more than an energy story — it is rewriting the landscape of private equity, distressed investing, and restructuring:

• Volatile raw material prices can bankrupt even high-demand businesses.
• Geopolitics and ESG are no longer footnotes; they are deal breakers or makers.
• Supply security now drives cross-border M&A and exit, alongside traditional financial returns.

And all because someone, at some point, put a wooden stake in the ground and claimed that land as theirs. Thousands of years, and multiple iterations of sovereignty and treaties later, and we find the same foundations forming and shaping our whole business landscape once again.

It will be our job as professionals to stay on top of the risks, be able to give the best clear-cut advice to stakeholders, and boards as well as resolve issues to make the best of the challenges that lay ahead.