China Extends Control Over Critical Minerals Amid Global Competition

China has strengthened its dominance over critical minerals essential for high-tech and renewable energy industries amid escalating geopolitical competition. Western nations are striving to regain market share, while countries in the Global South seek to capitalize on rising demand.

In 2023, Chinese companies invested $16 billion in foreign mines—the highest level in a decade, up from less than $5 billion the year before. This month, China announced plans to invest billions in mining operations in Afghanistan, Ghana, Zambia, and the Philippines.

Recent Chinese government measures aim to tighten control over rare minerals. On October 1, new regulations required exporters to trace how shipments of rare earth metals are used in Western supply chains, giving Beijing more control over which companies receive these materials. Additionally, China’s state-owned companies are acquiring the last two foreign-owned rare earth refineries, and export restrictions have been placed on antimony, gallium, and germanium.

China has classified rare earth mining as a state secret, further tightening control. Recently, two managers in the rare earth industry were sentenced to 11 years in prison for leaking information to foreigners.

In response, Western countries formed the Minerals Security Partnership—a coalition of 14 nations and the European Commission—to reduce dependence on Chinese supplies. However, Chinese state-owned companies have previously driven prices down to curb Western competition whenever they tried to ramp up production.

Chinese mining giant CMOC reached its cobalt production target three months early, indicating a strategy focused on maintaining dominance rather than pricing. This keeps Western competitors at bay, making it difficult for U.S., European, and Asian companies to eliminate Chinese influence from their supply chains.

The U.S. has considered expanding its stockpile of critical minerals to counter China’s influence. China’s stockpile strategy is used defensively and economically, stabilizing domestic industries. The specifics of China’s stockpile are unknown, but even rumors impact global prices. Though China accounts for less than 20% of lithium mine production, it refines over two-thirds of the world’s lithium and controls 90% of the graphite market.

The U.S. has also launched the $4 billion Lobito Corridor project to boost access to cobalt and copper from Angola, Zambia, and the Democratic Republic of Congo (DRC). However, critics argue that this approach prioritizes foreign interests over genuine local development.

African nations are increasingly pushing for local refining of their resources to foster economic transformation. Agreements between Zambia, the DRC, the EU, and the U.S. aim to support domestic refining and electric vehicle supply chains, gaining backing from both China and Western partners.

The China-Africa relationship, as emphasized during the 2024 Forum on China-Africa Cooperation (FOCAC), focuses on green energy and critical mineral value addition. Western nations are attempting similar partnerships, and the question remains whether African countries can leverage both relationships to their own benefit amid growing competition.