Highlights

• China controls 69.2% of global rare earth production.
• China controls 85-95% of global graphite processing capacity.
• The U.S. imported 70% of its rare earth compounds from China between 2020-2023.
• China's dominance extends beyond mining to refining, processing, and magnet manufacturing.
• These are critical midstream chokepoints where true supply-chain leverage resides.
• Export controls and trade restrictions are escalating.
• The window is narrowing for Western investors to build independent supply chains that bypass Chinese processing infrastructure.

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China dominates the global rare-earth space with hard data to back it: Chinese mine output hit approximately 270,000 t REO in2024 (opens in a new tab)—about 69.2% of world production.  On graphite, too, China’s grip is fierce: domestic control of spherical graphite and synthetic anode-material manufacturing runs at 85–95% (opens in a new tab) of global capacity.  On U.S. import sources: Between 2020–2023 roughly 70% of U.S. rare earth compound/metal imports came from China (opens in a new tab).

What’s New and Urgent

This isn’t just “a dominant China” headline—it’s a supply-chain emergency in slow motion.

• China’s control isn’t just upstream mining but processing, refining, and value-chain capture. One report says China processes about 90% of the world’s rare‐earth elements.
• China is moving aggressively on export controls of medium/heavy rare-earth and permanent-magnet materials in 2025.

Recent rare‑earth export/geo‑policy moves

• For companies and investors in upstream mining (e.g., in Africa or Australia), the big risk isn’t simply “finding the ore”—it’s bypassing the choke-points of midstream refining, magnet manufacture and trade restrictions.

What’s Iron-Clad vs What Deserves a Grain of Salt

China’s dominance in the rare earth and critical minerals universe is not an opinion—it’s a measurable, verifiable fact. In 2024, Beijing’s miners accounted for roughly 69.2% of the world’s rare earth oxide output, an industrial scale unmatched anywhere on earth. In graphite, the story is even starker: China controls between 85% and 90% of the global anode and spherical graphite supply chain, the quiet backbone of every electric vehicle battery on the planet. Meanwhile, the United States remains heavily dependent on China for about 70% of its rare earth compound and metal imports, a figure that underlines just how little has changed since “decoupling” became the word of the decade.

Yet, not every headline statistic survives the fact-check. The oft-repeated claim that China leads production in “16 of the 25 main critical minerals” sounds dramatic but lacks a consistent dataset to back it up. Percentages like 95% of magnesium or 82.7% of tungsten may be directionally true, but they fluctuate depending on the reporting year and the methodology used.

Even the popular statement that China handles “~90% of global processing” deserves nuance—definitions of “processing” and “refining” vary, and the scope can shift between raw separation and high-purity oxide finishing. Meanwhile, projections about how quickly non-Chinese supply chains can ramp up remain, at best, educated speculation.

There’s also an interpretive lens worth examining. Much of the Western narrative paints China as a monolithic threat—a supply-chain villain holding the world hostage. That view isn’t necessarily fully wrong, but it’s incomplete. China’s cost advantages have been eroding, its environmental regulations tightening, and domestic demand is surging as its own clean-energy sectors absorb more material. These internal pressures could narrow Beijing’s export leverage over time, creating unexpected openings for competitors. And while phrases like “16 of 25” are rhetorically powerful, they oversimplify a dynamic and evolving landscape that deserves precision over provocation.

For investors, the implications are immediate and profound. The ore itself is only half the game. The true leverage lies in refining, separation, magnet manufacturing, and export licensing—the invisible but decisive middle of the value chain. A mine in Malawi or a project in Australia may look promising on paper, but if its feedstock still ends up in a Chinese refinery, independence remains an illusion. Policy risks are escalating, from export controls to quota manipulations to full-blown trade wars.

These aren’t hypotheticals—they’re active instruments in Beijing’s geopolitical playbook. To truly diversify supply, investment must move downstream, not merely upstream. Finding new mines is essential, but without processing and manufacturing capacity outside China, the world remains trapped in the same old loop—digging itself deeper into dependency.

Final Word

China’s dominance in critical minerals is not just geological leverage—it is industrial-policy, processing-chain leverage, and now an export and trade weapon. The window for Western investors or junior producers to build credible, non-China supply chains is small and closing. Companies that ignore the mid-stream chokepoints do so at their peril.

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