Highlights

• China views the critical minerals race as a geopolitical battle for industrial dominance and national security, not just an economic competition.
• The U.S. and Western allies are slowly building resilience in critical mineral supply chains, but remain vulnerable to Chinese strategic control.
• Long-term success in the critical mineral race depends on comprehensive industrial policy integrating mining, processing, manufacturing, talent, and financing.

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A new paper by Tang Jinrong and colleagues from the China Geological Survey (opens in a new tab) and China University of Geosciences (opens in a new tab) (China Mining Magazine (opens in a new tab), May 2025) outlines Beijing’s perspective on the global race for critical minerals—and how China plans to defend its dominance. The study identifies five defining trends: a shift from upstream resource competition to full industrial chain control; the emergence of geopolitical mineral blocs; a growing risk aversion in global mining investment; a renewed push for mining self-sufficiency in the U.S., Canada, and Australia; and expanding demands by resource-rich countries seeking more than just export revenues—such as local development, environmental protections, and geopoliticalclout.

The authors acknowledge mounting pressure on China from U.S.-led efforts to “de-Sinicize” global supply chains and vilify Chinese mining firms under the banner of resource nationalism. The Rare Earth Exchanges (REEx) platform was founded in late 2024 to chronicle these overall trends. Beijing’s proposed counter-strategy includes deepening industrial-resource partnerships with neighboring nations, aggressively promoting its “green mining” credentials, and innovating new cooperative frameworks to maintain global influence in mineral trade.

So, what’s the Core takeaway?

China sees the critical minerals race not just as an economic contest but as a geopolitical battle for industrial dominance and national security. The paper’s tone is assertive and strategic, reinforcing the view that Beijing is doubling down, not retreating, from the center of global mineral supply chains.

What’s Missing?

While the authors diagnose external threats to China’s mineral dominance, they gloss over mounting internal challenges, such as declining domestic ore quality, environmental backlash, rising costs, and a growing global backlash against Chinese investments in Africa and Latin America. Nor does the paper acknowledge the potential of coordinated Western or allied critical mineral policies to shift long-term industrial dependencies away from China.  Could we be at the beginning of the end of China’s apex critical mineral power?

REEx Reflections

The U.S.–China critical mineral conflict is a geopolitical battle, not merely an economic competition. And yes, the United States must respond—but it is behind. China remains in a dominant position for now. However, internal strains and growing resistance to Chinese dominance in Africa, Latin America, and the West mean the foundations of its control are weakening. What unfolds over the next decade will be determined by policy resolve and industrial execution, especially in the U.S.  In these predictions below, several assumptions remain paramount and are subject to change.

Short Run (1–2 years)

Status Quo Disruption, But No Full-Scale U.S. Industrial Policy

As we see it at REEx, China now tightens control over exports of key rare earths used in semiconductors, lasers, and defense. This will continue to rattle U.S. defense and clean energy supply chains.

Now, Trump’s executive actions (e.g., permitting reforms, Section 232 investigation) may speed up mining projects on paper, but without corresponding downstream processing and off-take guarantees, few will cross the investment threshold. Some will, however.

We don’t believe sweeping U.S. industrial policy is likely at this stage, as Trump tends to prefer tariffs and deal-making over complex policy systems. The short-term response will remain reactive and fragmented.

China may temporarily cut prices in select REE markets to squeeze Western competitors and maintain dominance—but only surgically, not across all materials, as its costs and environmental issues make broad dumping unsustainable, even for state-backed entities.

REEx _Prediction_--U.S. firms remain vulnerable. Chinese restrictions sting, but the U.S. response is half-measured. Political posturing intensifies, but no deep policy alignment emerges. Trump may be able to secure a temporary deal for easier access to rare earth elements. The West starts waking up.

Intermediate Run (2027-20230):

Partial Decoupling, Fragile Western Momentum, Chinese Retaliation

Some U.S. and allied projects come online—especially in Australia, Canada, and parts of Africa—but they face capital constraints, permitting delays, and price volatility. Processing and separation remain chokepoints, especially for heavy rare earths like dysprosium and terbium. Some firms make progress (e.g., MP Materials on the processing front); however, U.S. defense contractors begin more overt lobbying for secure domestic supply chains.

Western countries begin coordinating industrial strategy, possibly via NATO or Five Eyes–aligned supply pacts. Europe launches more subsidies; Japan accelerates its stockpiling. China deploys “mineral shock tactics”—price flooding, investment blockades, and diplomatic pressure on African and Latin American governments to resist U.S. critical mineral overtures. Much of this depends on how Trump’s trade war and ensuing policy unfold.

REEx Prediction: Decoupling begins, but only partially. The U.S. builds resilience slowly, but it’s still playing catch-up. China remains dominant but starts burning goodwill and drawing global suspicion.

Long Run (2030+):

China’s Grip Weakens, U.S.-Led Alternatives Solidify—If Policy Holds

The U.S. may finally enact a full-spectrum industrial policy, especially if another crisis—military, supply chain, or economic—exposes systemic mineral vulnerability. Western-backed critical mineral zones (e.g., North American REE corridor, Africa partnerships, Australian expansions) mature, backed by aligned financing, education, and industrial capacity—the type of deep, collaborative networks REEx has called for since its launch.

China’s internal challenges mount by this point. Declining ore grades, rising costs, talent drain, ecological protests, and global resistance to Belt and Road–style projects.  However, China still retains dominance in some high-tech segments, such as magnet production and specialized metallurgy—unless Western reshoring or friendshoring is radically scaled up.  Note, this could be possible, especially if Trump’s team internalizes the deep crisis in 2025 with further policies to bolster accelerated resilience.

REEx Prediction: The U.S. and allies claw back ground. China no longer holds monopoly power, but it still commands strategic weight. Industrial alignment determines whether the U.S. becomes a stable mineral power or remains in a constant reactive cycle. In the meantime, China’s current strategic plans for economic dominance continue to unfold—e.g., owning vast parts of the extended downstream value chain and influencing digital currency.

Core Takeaway

The rare earth and critical mineral race is no longer just about economics—it’s about control, power, and future warfare readiness. China understands this, and the United States does, too, but its current response lacks the scale and coherence to win.

REEx suggests that unless the U.S. commits to a long-term industrial policy—integrating mining, processing, manufacturing, talent, and financing—it will remain vulnerable to Chinese mineral leverage, especially in times of geopolitical crisis.