One Country Is Refining Much of the World's Critical Metals. Welcome to Great Powers Era 2.0

Highlights

• China controls more than 90% of global refined supply for gallium, graphite, manganese, and magnet rare earths, creating acute geopolitical leverage.
• Since 2023, Beijing has tripled the number of mineral tariff codes under export controls, disrupting manufacturers of heavy rare-earth-dependent products.
• IEA projects critical-mineral demand to nearly double by 2040, with refining projects outside China facing up to 150% higher capital costs.
• The real supply-chain contest is midstream and downstream—refining, metallurgy, magnets, and technical know-how—infrastructure that cannot be rebuilt overnight.
• Governments and corporations may increasingly pay a security premium for diversified, traceable supply, redefining what a valuable supply chain means.

For decades, globalization operated on a simple premise: produce and process materials wherever it was cheapest, then trade them wherever they were needed. In critical minerals, that logic helped create an extraordinary concentration of processing capacity in China. China is the dominant refiner for most of the minerals shown, while Indonesia is the major exception for nickel. For gallium, graphite, manganese, and magnet rare earths, China now accounts for more than 90% of global refined supply. China also occupies commanding positions across smaller but strategically important markets including germanium, tungsten, and antimony.

For years, this arrangement worked remarkably well for Western industry. Chinese scale, infrastructure, technical expertise, and lower costs helped deliver inexpensive materials to global manufacturers.

But that system was built for the age of globalization. We are entering what Rare Earth Exchanges® calls Great Powers Era 2.0—a world in which economic efficiency increasingly competes with national security, industrial policy, and geopolitical leverage. That changes the meaning of supply-chain concentration.

China has increasingly demonstrated that strategic minerals are not simply commodities. Since 2023, Beijing has imposed or expanded export controls affecting gallium, germanium, antimony, graphite, and rare earths. REEx has reported that the number of mineral tariff codes covered by Chinese export controls has tripled since 2023. Heavy rare-earth controls introduced in April 2025 disrupted downstream industries sufficiently that some manufacturers outside China reduced utilization or temporarily stopped production.

Meanwhile, demand keeps climbing. Electrification, grids, AI infrastructure, data centers, robotics, aerospace, and defense increasingly compete for overlapping material inputs. Under stated policies, the IEA expects critical-mineral demand to nearly double by 2040, with lithium demand more than tripling and rare-earth demand rising 50–90%.

The Great Powers Era 2.0 Problem: Rebuilding Takes Time

The United States and its allies are responding with mines, separation facilities, refineries, metal plants, and magnet factories. But digging another mine is not enough. The real contest is increasingly midstream and downstream: refining, separation, metallurgy, alloys, magnets, specialized equipment, technical know-how, and qualified industrial supply chains.

That infrastructure cannot be recreated overnight. According to International Energy Agency (IEA) estimates (opens in a new tab), refining projects outside dominant suppliers can face 20% to more than 150% higher capital costs, while operating costs average roughly 50% higher.

So Great Powers Era 2.0 may require something markets spent decades eliminating:

a security premium.

Critical-mineral prices will still cycle. But governments and corporations may increasingly pay more for diversified, traceable, and geopolitically secure supply. The defining lesson of this new era is simple: The cheapest supply chain is no longer necessarily the most valuable one. Resilience itself now has a price.