U.S.-China Critical Minerals Race Heats Up

Mine your own business

Mineral Monopoly

The US-China rivalry and efforts for reaching net zero emissions have triggered a race to secure strategic minerals that are essential to the economic and political security of both nations. As a result, they are reforming global supply chains as emerging industries demand consistent access to these inputs.

This is in line with the thematic change of the newest phase of globalization markets, businesses, and policymakers have been operating around and attempting to navigate. Specifically, the prioritization of security over hyper-interconnectedness and the subsequent turmoil that follows the economic reforms necessary to adjust to this new global paradigm.

From a US security assessment, Washington is deeply concerned about China’s position in the mineral supply chain. Specifically, China’s dominance of key resources necessary for the mass production of green and military-applied technologies.

Data from the 2022 U.S. Geological Survey shows that the United States is 100 percent import-dependent on twelve critical minerals and more than fifty percent import-dependent on thirty-one additional ones; China is the largest source of imports for twenty-six of the fifty minerals classified as critical by the U.S. government.

As of 2025, recent estimates suggest this has shifted slightly, with the US 100% import-reliant on at least 13 minerals, and China’s exact share of the 50 critical minerals possibly varying but still dominant.

Furthermore, China alone employs roughly 2.7 million out of the total 4.3 million workers in the global solar energy industry based on 2021 data, and has outspent the US in this specific green technology by over $400 billion dollars historically.

Updated estimates for 2025 suggest the global solar workforce is closer to 4 million, with China’s share remaining dominant though not precisely 2.7 million, and 2024 data indicates China invested $675 billion compared to the US’s $315 billion, widening the gap beyond $400 billion.

The United States now imports 80 percent of its rare earth elements directly from China, with portions of the remainder indirectly sourced from the Asian giant through other countries.

In the 1980s, the United States produced more of these elements than any other country in the world. However, following the market reforms of Deng Xiaoping, China used aggressive economic practices to strategically flood the global market for rare earth elements and displace its competitors.

Forty years later, China, which already produces roughly 70% of the world’s rare earth minerals, supplied about 80% of America’s rare earth imports in 2018. State-owned Chinese companies have also been actively buying up critical mineral deposits outside the country.

Economic & Energy Security: Lithium Ion Batteries

The United States imports over 75 percent of the barite it consumes, and over 50 percent of its barite imports come from China. This little-known metal is necessary for the fracking industry, an energy extraction strategy that led the US to achieve energy independence and dominance.

Fossil fuels aside, China also has a major advantage with green technologies. While it may not have a monopoly, Chinese companies refine half of all cobalt in the world and process more than 75% of all cobalt-related chemicals globally.

Cobalt is a key component used in lithium ion batteries, and three-quarters of the global reserves are concentrated in a patch of land roughly four hundred by one hundred kilometers in size in the DRC. Stretching from Kolwezi in the southeastern corner of the DRC through northern Zambia is the Central African Copper Belt, where China has made significant investments.

As a result, Chinese companies are currently the world’s leader in cobalt mining. Their gargantuan market share complements their position in the supply chain for electric vehicles. And while Indonesia is the largest global producer of nickel,

China is the largest refiner of it, allowing them to maintain their centrality in the supply chain for this strategic resource in the energy transition. China is also the main producer of lithium ion batteries, and accounts for 70% of all production, and the US relies on them for importing these batteries.

China also dominates global graphite production, manufacturing over 60 percent of the world's supply and almost all high-purity graphite required for rechargeable batteries. This vulnerability highlights the underdevelopment of battery metal supply chains for EV deployment in the United States.

Critical minerals, including lithium, cobalt, nickel, manganese, and graphite, have value chains struggling with underinvestment, political risk, and poor governance.

Furthermore, former President Biden’s Inflation Reduction Act and efforts to move away from Chinese dependence require a significant regulatory overhaul of the global supply chain system.

Under the Act, EV consumer tax credits are available only if final assembly occurs within North America and no critical minerals are sourced from a “foreign entity of concern”; that is, Russia and China. The United States and FTA countries together may still struggle to account for the entirety of mineral demand within the broader EV industry - both in terms of quantity and type of mineral.

Argentina, for example, a top-five global producer of lithium, does not have an FTA with the United States. Japan, which is set to become a major player in midstream processing, would also be excluded. Any FTA or partner country processor that would otherwise allow a carmaker to qualify for the credit has to demonstrate a total separation from the Chinese supply chain.

This would require a traceability regime that is not likely to reach maturity for some time, and this in large part has to do with the current technical limitations. Companies and regulatory authorities are considering two potentially paradigm-shifting technology methods: