The global mining industry is no stranger to disruption. From resource nationalism to geopolitical tensions, labour strikes, and environmental disasters, critical supply chains have been upended time and again – often with far-reaching consequences for industries reliant on these essential raw materials.
Following this week’s events in the Democratic Republic of Congo that lit a fire under tin and cobalt prices, this article delves into the causes behind some historic disruptions, the immediate and long-term impacts on global supply and pricing, and how industries have adapted – or struggled – to recover.
In the past two decades alone, several high-profile mine shutdowns or supply disruptions have sent shockwaves through global markets, exposing vulnerabilities in supply chains and driving extreme price volatility.
One of the most striking examples of this occurred in 2010, when China, the dominant global supplier of rare earth elements (REEs), imposed a REE export embargo on Japan following a territorial dispute. With China controlling over 90% of the world’s rare earth production at the time, the move triggered a severe supply crunch. Prices for key materials like neodymium and dysprosium skyrocketed by hundreds of percentage points, forcing high-tech manufacturers in Japan, the US, and Europe to scramble for alternative sources.
The crisis ultimately accelerated investment in rare earth mining outside China, with Australian company Lynas and the US-based Mountain Pass mine playing key roles in diversifying supply. However, even after the market stabilised, the episode highlighted the geopolitical risks inherent in critical minerals, an issue that remains highly relevant today as nations compete for resources essential to advanced technologies and the energy transition.
A different kind of crisis unfolded in 2015 when the Samarco tailings dam in Brazil collapsed, unleashing a catastrophic mudflow that killed 19 people and devastated local communities. The mine, jointly operated by Vale and BHP, was a key producer of high-quality iron ore pellets, and its closure immediately reduced global supply.
The impact on iron ore prices, however, was relatively muted at first, as there was ample production elsewhere. But just four years later, in 2019, a similar but even deadlier disaster struck at Vale’s Brumadinho mine. This time, the market response was far more dramatic. Brazilian regulators forced Vale to shut down additional high-risk tailings dams, cutting the country’s iron ore output by nearly 10%.
With Vale accounting for around 20% of global seaborne iron ore supply, prices surged from around US$70 per tonne to over US$120 per tonne in just a few months. Australian miners like Rio Tinto, BHP and Fortescue were among the biggest beneficiaries, as demand shifted toward their operations. However, the regulatory fallout from these disasters increased compliance costs across the industry, making permitting and operational safety an even greater priority for investors evaluating future projects.
Geopolitical risk reasserted itself in early 2022 when Russia’s invasion of Ukraine led to sweeping sanctions on Russian exports, including key metals like nickel, aluminium, and palladium. Russia is one of the world’s largest producers of these commodities, and the uncertainty surrounding supply triggered some of the most extreme price swings in modern history.
Nickel saw its price more than triple in a single day, forcing the London Metal Exchange to suspend trading. Aluminium, heavily supplied by Russia’s Rusal, also saw sharp price increases, while palladium faced supply chain disruptions that sent automakers scrambling.
Investors who had exposure to non-Russian producers saw significant gains, while those reliant on Russian supply chains faced severe challenges. The long-term effects of these sanctions continue to unfold, with some markets adjusting through alternative trade routes while others, like Indonesia, ramping up efforts to develop new sources of supply, particularly for nickel.
Beyond these headline-making events, other disruptions have also had lasting impacts on commodity markets. In 2014, a labour strike in South Africa’s platinum sector, the longest in the country’s history, crippled production for five months and drove up prices.
Similarly, Indonesia’s decisions to ban nickel ore exports in both 2014 and 2020 created significant supply shortages, driving investment into local refining but also causing short-term market volatility.
The COVID-19 pandemic further underscored the vulnerability of supply chains, as lockdowns and labour shortages disrupted production of key materials, from copper to lithium to toilet paper, just as demand for electrification and green energy metals began to surge.
For investors, these cases highlight several key lessons. First, over-reliance on a single supplier or region poses significant risks for key industrial metals and so diversification at both a corporate and jurisdiction level are important.
Second, supply shocks often lead to price spikes that can create short-term trading opportunities but also drive longer-term structural shifts in capital deployment, production and investor sentiment. The Brumadinho disaster, for example, not only caused a temporary iron ore price surge but also reshaped global safety regulations, leading to increased costs for tailings management across the industry.
Finally, governments and corporations are increasingly prioritising resource security, with the US, EU, and other nations investing in domestic mining and refining capacity to reduce reliance on geopolitically sensitive suppliers.
As the world moves forward with an energy transition that depends heavily on critical minerals like lithium, cobalt, and rare earths, supply chain resilience will be more important than ever. Investors who understand the dynamics of mining disruptions and their broader market implications will be better positioned to navigate both the risks and opportunities.
