Highlights

• China dominates 85% of global rare earth processing—not mining—creating the most consequential chokepoint in clean-energy and defense supply chains, leaving the U.S., Europe, and Africa vulnerable to geopolitical leverage.
• Africa holds 30% of global mineral reserves but exports raw ore while importing finished products, reinforcing a colonial-style trade model despite emerging domestic beneficiation policies in Zimbabwe and Ghana.
• Diversification through mining projects alone will not break China's monopoly; without investment in refining, separation, and downstream manufacturing, new supply sources simply feed the same system.

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A new multi-author policy volume (opens in a new tab) edited by African political economy scholars and published in African Perspectives on Trump 2.0, United States Foreign Policy and the New World Re-Order delivers a stark assessment of global critical-mineral dependencies, concluding that China’s dominance in rare earth element (REE) processing—not mining—remains the single most consequential chokepoint in the clean-energy and defense supply chain. Drawing on trade data, policy analysis, and case studies across Africa, the study finds that China now refines approximately 85% of the world’s rare earths, even as many of the raw materials originate elsewhere. The authors argue that this structural imbalance has left the United States, Europe, and Africa exposed to geopolitical leverage, supply disruptions, and long-term industrial dependency.

Study Approach and Scope

The study is not a laboratory experiment but a comparative geopolitical and economic analysis, combining government trade statistics, executive orders, African Union policy documents, and historical case studies—most notably China’s 2010 suspension of rare earth exports to Japan. The authors examine how China deliberately built refining and separation capacity over decades, while Western nations allowed processing to offshore due to environmental costs, price volatility, and short-term market logic.

For Rare Earth Exchanges™ community members, the distinction is critical: rare earth mining is only the first step. The difficult, capital-intensive, and environmentally sensitive work lies in _processing_—chemically separating individual elements likeneodymium or dysprosium. China controls thisstep.

Key Findings: Monopoly by Design, Not Accident

The authors find that China’s rare earth advantage was strategic rather than geological. While Africa holds roughly 30% of global mineral reserves, including rare earths, most African countries export raw ore and import finished products. China, by contrast, invested heavily in refineries, often at a loss initially, to dominate the middle of the supply chain.

The study documents how China leveraged this position to:

• Force downstream manufacturing and intellectual property to relocate to China
• Influence pricing and global availability
• Gain geopolitical leverage over defense and clean-energy industries

The United States currently imports about 80% of its rare earths directly or indirectly from China, with no meaningful domestic separation capacity at scale.

Implications for Africa, the U.S., and Global Industry

For Africa, the findings are double-edged. On one hand, Chinese investment has delivered infrastructure and market access. On the other hand, value capture remains offshore, reinforcing a colonial-style raw-material export model. The study highlights emerging African responses, including bans on exporting unprocessed lithium and rare earths in countries like Zimbabwe and Ghana, and the African Union’s Green Minerals Strategy aimed at domestic beneficiation.

For the U.S. and its allies, the implication is blunt: mining projects alone will not break China’s dominance. Without processing, refining, and magnet manufacturing, new mines simply feed the same system.

Controversies and Limitations

The authors acknowledge several limitations. First, much of the analysis relies on government and trade data that may lag real-time developments. Second, the study focuses more on structural power than on firm-level economics, meaning project-specific feasibility is not addressed. Critics may also argue that the work underplays environmental opposition in Western countries, which has constrained processing development outside China.

There is also controversy around framing: while China’s strategy is often described as coercive, the study notes that Western nations chose to exit processing decades ago, suggesting shared responsibility for today’s imbalance.

Conclusion: Processing Is the Real Battleground

The study’s central message is clear and unsettling: control of rare earth processing—not mining—defines power in the modern industrial economy. Until the United States, Europe, and Africa invest in refining, separation, and downstream manufacturing, China’s monopoly will persist. For policymakers and investors alike, the lesson is simple: diversification without processing is not diversification at all.

Citation

Khumalo, S., Manjonjo, A., Kuwali, D., et al. (2025). African Perspectives on Trump 2.0, United States Foreign Policy and the New World Re-Order, Volume I. Chapter 13.