Western nations are growing increasingly anxious as China tightens its control over the global supply of minerals essential for semiconductors and green technologies like electric vehicles and solar panels. A series of export restrictions imposed between September 2024 and April 2025, with fresh curbs added just last month, have highlighted a deep-seated dependency that threatens to slow down the global green energy transition.
The Geopolitical Bottleneck in Critical Minerals
At the heart of this concern lies a group of so-called energy minerals, including copper, lithium, nickel, cobalt, graphite, and rare-earth elements. These materials are the building blocks of modern technology, powering everything from smartphones and electric car batteries to vast renewable energy grids and the data centers driving the artificial intelligence (AI) boom.
Despite a long-term trend of relatively muted price increases for most of these minerals, the supply chain is far from stable. For instance, while copper prices have risen by just 30% over the last 13 years and rare earth prices have actually fallen, lithium experienced a wild price swing, soaring six times between 2020 and 2023 before falling again. The recent closure of a key lithium mine in China in mid-2025 caused prices to spike once more, demonstrating the market's volatility.
China's Overwhelming Dominance in Refining
The core of the problem is not just mining but refining. China's dominance in processing these critical minerals is staggering. In 2024, China accounted for 96% of global graphite refining, 91% of magnet rare earths, and 78% of cobalt. This control has been built over decades through sustained state support and subsidies, insulating Chinese refiners from the market fluctuations that often deter long-term investment in the West.
Jonathan Evans, CEO of Lithium Americas, which is developing a key US lithium mine, recently testified to the US Congress, stating, “To maintain its dominance, China has depressed global lithium prices to discourage investment by non-Chinese firms and deter public or private capital from entering the market.” This strategy creates a significant barrier for Western companies trying to compete.
A Slow Path to Diversification
While there is growing talk of diversifying both the production and refining of these key metals, the International Energy Agency (IEA) forecasts a slow change. In a report released earlier this year, the IEA projected that China's stranglehold on refining will reduce only marginally in the coming years. Looking ahead to 2035, the concentration of supply is expected to remain high, effectively returning to 2020 levels.
Compounding the issue is policy uncertainty in the West. Recent moves in the US to remove incentives for green-energy investments have forced several companies to stall their plans to pivot to these technologies. Meanwhile, a slowdown in electric vehicle sales in key markets like Europe adds another layer of complexity to demand forecasts.
Nevertheless, the long-term demand picture remains robust. The green-energy sector accounted for approximately 19% of the demand for these minerals in 2024, a figure set to grow as the world pushes for a cleaner future. If the green transition is to succeed, securing a stable and diversified supply of these critical minerals is not just an economic imperative but a geopolitical one.
