China’s critical minerals dominance spurring supply chain fears

As China consolidates its control over the world’s critical minerals, nations scramble to diversify supply chains and reduce dependency, risking a new era of geopolitical and industrial competition.

In 2025, the idea that “China controls 80% of the world’s critical minerals” is not merely rhetoric but, according to a report by Techovedas, a strategic reality shaping the global technology, energy and defence landscape. That assessment sits alongside independent data showing China’s overwhelming share in the production and, crucially, the refining of a long list of materials , from gallium and magnesium to natural graphite and rare earths , that underpin semiconductors, electric vehicles (EVs) and renewable-energy equipment. ^[1][4][2]

China’s edge comes from both scale and integration. Industry data shows Beijing dominates the mining of many key ores and, even more decisively, the downstream refining and processing that turn raw materials into components usable by manufacturers worldwide. Visual Capitalist and Statista charts underline China’s near-monopoly in specific minerals , gallium (about 99%), magnesium (95%), tungsten and graphite at roughly four-in-five global shares, and rare earth elements approaching 70% of output , while academic analysis from the Belfer Center documents years of state-backed investment, acquisitions and policy settings that cemented this position. ^[4][2][3]

That vertical integration matters because control of refining capacity creates choke points even when ore is mined elsewhere. The Belfer Center notes China’s role as top raw-ore producer for many items on the USGS critical-minerals list, and multiple industry analyses emphasise that a majority of global refining capacity for cobalt, lithium derivatives and rare-earth oxides sits inside China’s industrial ecosystem. This means supply shocks or policy shifts in Beijing can cascade through global manufacturing lines. ^[3][4]

The practical importance of these materials is stark. Semiconductors require gallium, indium and specialised silicon processes; EV batteries depend on graphite, lithium and cobalt; wind turbines and many clean-energy technologies rely on rare-earth magnets and associated elements; and defence systems use tungsten, tantalum and antimony. Disruption to any node in that chain risks slowing production, raising costs or forcing design compromises across multiple high-tech sectors. ^[1][3]

Beijing has demonstrated how resource control can become geopolitical leverage. In 2023 China tightened exports of gallium and germanium amid wider technology tensions, producing global price spikes and prompting immediate security and supply-chain alarm across the US, EU and allied governments. Financial-sector warnings underline the stakes: Goldman Sachs has flagged that even modest disruptions to rare-earths supply could shave hundreds of billions from output and push inflation higher. ^[1][7]

Those risks have prompted a vigorous policy response. The United States has marshalled funds under the Inflation Reduction Act and used the Defense Production Act to incentivise domestic mining, recycling and processing projects; the White House has signalled further “historic deals” with the mining sector to accelerate onshore capacity and strategic stockpiles. In Europe, the Critical Raw Materials Act sets targets to produce and process a greater share of essential materials within the bloc by 2030. Industry moves include proposals for new smelters and joint ventures outside China, such as Korea Zinc’s board-level discussion of a multi-billion-dollar U.S. smelter in a proposed government-partnered joint venture, and plans to produce germanium from non-Chinese sources by 2028. These efforts acknowledge that building mines and processing plants takes years and faces environmental, regulatory and technical hurdles. ^[6][5]

Market participants and policymakers therefore face a two-track challenge: reduce near-term vulnerability to Chinese control while accelerating the longer-term establishment of diversified, sustainable supply chains. Analysts warn that even with aggressive investment, the world may remain dependent on Chinese processing for some critical steps for the better part of this decade, meaning industrial strategy, stockpiling and diplomatic coordination will remain central to national security and economic resilience. According to Techovedas, investors are increasingly treating critical minerals as “the new oil” of the 21st century , a reminder that access to earth‑born inputs will shape who leads the next wave of technological and industrial competition. ^[1][6][7]

If the future of chips, EVs and clean energy depends on materials that largely flow through China’s industrial system, the immediate policy question is how quickly and at what cost alternative capacity can be built. Governments and companies are now balancing expedited permitting, public funds and international partnerships against environmental safeguards and commercial realism, aware that the tempo of the global tech race is, in important respects, set by who commands the core elements of modern industry. ^[1][3][6]

##Reference Map:

• ^[1] (Techovedas) – Paragraph 1, Paragraph 4, Paragraph 7, Paragraph 8
• ^[4] (Visual Capitalist) – Paragraph 1, Paragraph 2, Paragraph 3
• ^[2] (Statista) – Paragraph 1, Paragraph 2
• ^[3] (Belfer Center) – Paragraph 2, Paragraph 3, Paragraph 8
• ^[7] (Reuters/Goldman Sachs report via Reuters) – Paragraph 5, Paragraph 7
• ^[6] (Reuters/White House plans) – Paragraph 6, Paragraph 8
• ^[5] (Reuters/Korea Zinc) – Paragraph 6

Source: Fuse Wire Services