The green energy transition has fundamentally reshaped global geopolitics, transforming obscure geological elements into strategic assets that determine the pace of decarbonization and the balance of industrial power. At the heart of this transformation lies a deceptively simple question: who controls the critical mineral pipeline? The answer is far more complex than the geography of mining might suggest. While minerals are extracted across diverse jurisdictions—cobalt in the Democratic Republic of Congo, lithium in Australia and Chile, nickel in Indonesia—the pipeline that transforms these raw materials into the components of electric vehicles, wind turbines, and advanced weapons systems runs disproportionately through China. This concentration has triggered an intense geopolitical competition, as Western allies scramble to construct alternative mineral partnerships while China leverages its processing dominance as an instrument of geoeconomic statecraft.
China’s Structural Dominance of the Processing Stage
The critical mineral supply chain is not a single pipeline but a sequence of stages: extraction, refining, processing, component manufacturing, and final assembly. The critical chokepoint lies not in the ground but in the midstream—the refining and processing capacity that converts raw ore into usable industrial inputs. It is here that China has established a near-monopoly. According to the International Energy Agency, China serves as the leading refiner for nineteen of the twenty critical minerals it analyzes, with an average market share of approximately 70 percent. In rare earths, the disparity is even more stark: China controls over 90 percent of global processing capacity, and in heavy rare earths, its share reaches as high as 95 to 99 percent. For lithium, China holds roughly 60 percent of processing capacity; for cobalt, over 70 percent; for graphite, the figure is similarly dominant.
This dominance was not achieved overnight, nor did it result from geological endowment. China possesses few of these minerals in significant quantities, with the notable exception of graphite. Instead, Beijing pursued a deliberate, decades-long industrial strategy. Between 2001 and 2023, China poured approximately $94 billion into overseas critical mineral projects, securing access to extraction sites while simultaneously building the refining infrastructure that would give it leverage over the entire chain. Since 2023 alone, Chinese outbound foreign direct investment in cleantech sectors has exceeded $220 billion, encompassing not only mining but also battery materials, electric vehicles, solar photovoltaics, and renewable infrastructure. This vertical integration means that even when minerals are mined in Australia, Chile, or the DRC, they almost invariably travel to Chinese facilities before becoming usable industrial inputs.
The result is a self-reinforcing system of industrial advantage. Economies of scale in refining reduce input costs for downstream manufacturing, while dominance in battery and magnet production increases domestic demand for China’s own refined materials. China now produces approximately 80 percent of global lithium-ion batteries, 70 percent of electric vehicles, and 85 percent of solar panels—the “three new” products that represent 6 percent of Chinese GDP and form the backbone of the global energy transition. By 2024, China accounted for nearly 60 percent of global lithium-ion battery imports across 88 countries, in a market valued at roughly $140 billion. The pipeline, in other words, does not merely pass through China; it is constituted by China.
Weaponizing Interdependence: Export Controls as Geoeconomic Instruments
The strategic implications of this concentration became unmistakable as China began to wield export controls as instruments of geopolitical pressure. During the 2010s, Beijing imposed export quotas on rare earth elements, a policy challenged twice at the World Trade Organization and ultimately found inconsistent with China’s obligations. Rather than abandon the strategy, China adapted it. In 2023, it announced export licensing requirements on gallium and germanium, minerals essential for semiconductors and electric vehicles. Since 2024, export restrictions have extended to antimony and tungsten, with the price of tungsten—a critical input for missiles and ammunition—soaring 70 percent. Most significantly, a licensing provision now extends to any product containing 0.1 percent or more of Chinese-origin controlled rare earth materials, regardless of where the final product is manufactured—a measure scheduled for full extraterritorial enforcement, though temporarily suspended following initial announcement.
These measures have had tangible consequences. Chinese export controls introduced in April disrupted magnet supplies and forced some automakers to curtail or temporarily halt production. The message is unambiguous: access to critical minerals is no longer a commercial transaction but a geopolitical instrument. As one analysis observes, China’s mineral-processing industry gives it leverage comparable to Washington’s influence over dollar payments and advanced technology. The pipeline has become a weapon.
The Western Response: Partnerships without Production
Western capitals have recognized the vulnerability. Since 2021, over 70 agreements and regulatory frameworks on critical minerals have been signed globally, though only six are binding. The United States launched the Minerals Security Partnership in 2022, a coalition of resource-dependent countries including Australia, Canada, Japan, South Korea, and several European states, aimed at coordinating investment and information-sharing. In February 2026, this evolved into the Forum on Resource Geostrategic Engagement (FORGE), a 54-country coalition intended to build trusted supply chains outside China’s orbit. The G7 established its own Critical Minerals Resilience and Production Alliance in June 2026, targeting a reduction of dependence on Chinese rare earths and permanent magnets to under 60 percent by 2030.
Bilateral initiatives have proliferated. The United States signed a memorandum of understanding with the European Union in April 2026, formalizing a strategic partnership across the entire value chain—from exploration and extraction to processing, recycling, and recovery. The agreement contemplates coordinated price floors, subsidies, strategic reserves, and joint research investment. The EU has ratified similar agreements with Chile and Indonesia; the United States has reached binding agreements with Argentina, Ukraine, the DRC, and Cambodia. The ambition is clear: construct a parallel pipeline that bypasses Chinese processing.
Yet the gap between ambition and execution is vast. The fundamental obstacle is not geological—critical minerals are geographically dispersed—but financial and temporal. Critical mineral projects require 20 to 30 years of investment and operating certainty, without which private capital remains reluctant to commit. The International Energy Agency estimates that more than $500 billion in critical minerals investment will be needed to secure Western policy goals. Public financing institutions, however, were designed to promote exports and development, not resource security, and their mandates often conflict with the long-time horizons and risk profiles of mining projects. The United States has moved aggressively in unconventional ways—the Defense Department extended a $150 million loan and made a $400 million equity investment in MP Materials, a rare earths producer, while setting price floors and offtake guarantees for magnets. The International Development Finance Corporation deployed $1.2 billion in equity financing for critical minerals in 2026. But these figures remain modest against the scale of the challenge.
Producer Countries and the Limits of Exclusionary Alliances
A further complication is the shifting posture of resource-holding countries, which are no longer content to serve as passive quarries for either China or the West. Indonesia imposed a full ban on nickel ore exports in 2020 to compel domestic processing, and within a few years its nickel exports shifted from $1 billion in raw ore to over $20 billion in higher-value processed products. Zimbabwe has announced a ban on lithium concentrate exports beginning in January 2027. Chile released a National Strategy for Lithium in 2023, outlining plans for a national lithium company and majority state ownership in new projects. The DRC increased royalty rates on cobalt and imposed export bans to address oversupply.
These resource-nationalist policies create a dilemma for Western partnerships. The G7’s Critical Minerals Alliance, by focusing on midstream and downstream phases, largely excludes producer countries from the design of alternative value chains—a structural flaw that undermines its credibility. As one analysis notes, “by failing to recognize that part of Beijing’s success lies in its capacity to engage with these actors as economic partners, offering them benefits in exchange for resources, the G7 may find its ability to build a credible alternative limited.” The absence of direct dialogue with producing countries is compounded by a 23.1 percent decline in official development assistance from G7 countries, leaving them without the financing to develop the technical capabilities that new traceability and due diligence standards would require.
The Contestation of Control
The question of who controls the critical mineral pipeline therefore admits no simple answer. China controls the midstream—the refining, processing, and component manufacturing stages—to a degree that constitutes structural dominance. The West controls capital, technology, and the demand signal, but has allowed its processing capacity to atrophy over three decades of offshoring. Producer countries control the raw materials and are increasingly asserting the right to capture more value from them. No single actor controls the entire pipeline, but the balance of leverage at the most critical chokepoints rests overwhelmingly with Beijing.
The Western response—partnerships, memoranda, price floors, and equity investments—represents a necessary but insufficient counterweight. As one report concludes, “the challenge is not simply replacing Chinese supply but rebuilding an entire chain of industrial advantage outside China’s control, a process that will take years of coordinated investment and higher costs for participating countries.” The critical mineral pipeline is being contested, but it is not yet being rerouted. Until the West demonstrates the capacity to finance, construct, and sustain alternative processing infrastructure at scale, the pipeline will continue to run through China—and the leverage that accompanies it will remain a defining feature of twenty-first-century geopolitics.
