China’s control over rare earth minerals, a group of 17 essential elements, plays a pivotal role in the global supply chain, especially for high-tech and green energy industries. These elements are indispensable in the manufacturing of smartphones, electric vehicles, military equipment, and various clean energy technologies.
China accounts for approximately 60% of the world’s rare earth production. This dominance stems from decades of strategic investments and policies aimed at consolidating control over both the extraction and processing stages of these minerals. Historically, China declared rare earth elements as strategic resources in the 1990s, prohibiting foreign investment and ensuring that domestic companies maintained control over their production.
China’s real leverage comes from its near-monopoly on processing rare earth minerals. While it produces a significant portion of these minerals, it processes nearly 90% of them globally. This processing capability means that even rare earths mined outside China often need to be sent there for refining, giving China a critical choke point in the supply chain.
Below is a summary of China’s control over the top 10 minerals by percentage of raw material production and processing:
Rare Earth Elements (REEs)
- Production: 60% of global production.
- Processing: Nearly 90% of global processing capacity.
- Industries: High-tech devices (e.g., smartphones, computers) and clean energy technologies (e.g., wind turbines, electric vehicles).
Lithium
- Production: 16% of global production.
- Processing: 60% of global lithium refining capacity.
- Industries: Electric vehicle batteries and energy storage systems.
Cobalt
- Production: Significant control through ownership of 15 out of 19 major mines in the Democratic Republic of Congo, contributing to a large portion of global production.
- Processing: 77% of global cobalt refining capacity.
- Industries: Electric vehicle batteries and aerospace (e.g., jet engines).
Graphite
- Production: 67% of global natural graphite production.
- Processing: Controls nearly 100% of the graphite processing required for battery anodes.
- Industries: Battery anodes for electric vehicles and energy storage systems.
Nickel
- Production: China is a significant consumer and processor, although its raw production is smaller compared to countries like Indonesia and the Philippines.
- Processing: Around 35% of global nickel processing capacity.
- Industries: Stainless steel production and electric vehicle batteries.
Aluminum/Bauxite
- Production: China produces a significant portion of the world’s bauxite and alumina.
- Processing: Dominates the global aluminum production and processing market.
- Industries: Aerospace (e.g., aircraft manufacturing) and automotive (e.g., lightweight vehicle parts).
Copper
- Production: China is a major importer and processor, though it produces a smaller share of the raw copper ore.
- Processing: Significant smelting and refining capacity.
- Industries: Electrical wiring and renewable energy (e.g., solar panels, wind turbines).
Tin
- Production: China is one of the top producers of tin.
- Processing: Dominates the global market in tin smelting and refining.
- Industries: Electronics (e.g., soldering for circuit boards) and packaging (e.g., tin cans).
Magnesium
- Production: China is the largest producer, accounting for about 85% of global production.
- Processing: Dominates the global magnesium processing industry.
- Industries: Automotive (e.g., lightweight parts) and aerospace (e.g., structural components).
Tungsten
- Production: China controls over 80% of global tungsten production.
- Processing: Has a similar dominance in processing, controlling a large share of the global tungsten refining market.
- Industries: Tool manufacturing (e.g., cutting tools, drilling equipment) and electronics (e.g., filaments, contacts).
