Drone wars deepen West’s critical minerals squeeze

The rapid proliferation of unmanned aerial vehicles (UAVs) is driving demand for specific minerals essential to military drone production, according to BMO Capital Markets. An estimated 15 million drones are projected to be deployed in the ongoing Russia-Ukraine conflict this year, with governments and military alliances allocating approximately $150 billion to develop drone and counter-drone technologies over the past two years.

Critical minerals such as gallium, germanium, and magnetic rare earths are identified as key components in the construction of military drones. BMO analysts assert that the era of mass drone warfare has arrived, with evidence of this trend visible beyond BMO's projections. Ukraine plans to produce over seven million drones in 2025, up from four million in the previous year, while NATO has committed over $40 billion over five years to counter-drone capabilities and aims to double its drone operators by the end of 2027.

The increased demand for critical minerals is particularly concerning, as supply chains for these minerals are heavily reliant on China, creating potential vulnerabilities in the global supply chain.