By Pascale Massot

China is the dominant player in global critical minerals supply chains, especially in the midstream segments. The country controls, on average, two-thirds of the production or refining of major critical minerals such as lithium, graphite, cobalt, nickel, copper, and rare earth elements and above 90 percent for the latter. In 2022, the United States was more than 50 percent import dependent on 51 mineral commodities. According to the United States Geological Survey (USGS), China was the leading supplier for 17 of these and ranked among the top three sources for 24.

The U.S. was caught “sleeping at the wheel” – and it was not alone. Western governments have found themselves staring at the China challenge from the vantage point of decades of open-market-driven minerals procurement policy. Since the last quarter of the 20th century and until very recently, the neoliberal globalization paradigm in the West left to market forces the task of fulfilling critical mineral security objectives. This led to decades of internationalization, financialization, and global supply chain reconfiguration to align with profit motive and shareholder value maximization. In parallel, labor, environmental, civil society, and indigenous rights considerations continued to improve, a positive development that has also compounded the delocalization incentives of mining and refining industries.

As geopolitical strategic competition with China heats up, the realization that this paradigm is ill adapted to the pursuit of economic security has set Western governments scrambling to put together a set of responses building on the de-risking agenda popularized by Ursula von der Leyen in 2023 (coined months prior by German Chancellor Olaf Scholz). In North America, this agenda has tended to focus on three legs: onshoring/friend-shoring, diversification, and reindustrialization.

Yet current policy discussions suffer from growing pains resulting from an incomplete paradigm shift away from a market-led approach, insufficient appreciation of the scale and nature of China’s dominance, overly ambitious and underfunded targets, underspecified end goals, and too narrow an understanding of what ultimately constitutes resource security.

To help chart a way forward, I propose an approach of “asymmetric resilience,” which seeks to recalibrate the balance of strength and vulnerability between China and the West by modulating each side’s exposure to risk and developing targeted areas of dominance along global supply chains, while recognizing that China is also pursuing resource security. Asymmetric resilience seeks a recalibrated equilibrium that both sides can feel secure in.

 

China’s Crushing Level of Dominance in Critical Minerals Supply Chains

China has a few decades’ head start in thinking about commodities from a resource security perspective and implementing a multipronged strategy with domestic and international components. China has invested in all aspects of critical minerals development, all along the value chain, including on the technology front.

To take the global nickel industry as an example, the share of China’s refined nickel exports, while high at over 20 percent, does not capture China’s multifaceted dominance. Chinese investment in the accelerated high-pressure acid leach (HPAL) process has transformed the industry, and made the vast Indonesian nickel deposits economically viable. Chinese investors worked assiduously to develop a long-term presence in the Indonesian nickel processing and refining industry after Jakarta announced a national ban on raw nickel exports.

This led to a situation today where Ford Motors has chosen to partner with Vale Indonesia and Zhejiang Huayou Cobalt Co. – a Chinese firm – to develop its nickel processing facility in Indonesia. This illustrates the predicament facing Western firms looking to build critical mineral resilience: it’s impractical for Western firms to back a nickel project without the involvement of a Chinese firm bringing the technology, know-how, and project delivery capacity. In this case, the actualization of U.S. nickel supply chain resilience runs through an ASEAN country, the Canadian subsidiary of a Brazilian iron ore giant, and a private Chinese firm.

To give a sense of the level of U.S. exposure here, under the Biden administration’s Inflation Reduction Act (IRA) Foreign Entity of Concern (FEOC) thresholds (whose future is in flux), about 8-9 percent of global raw nickel supply and about 12 percent of refined supply is compliant. These figures would only rise to 10 percent and 13 percent respectively by 2034 taking current projections into account. A report from the Center for Strategic and International Studies pointed out that the IRA fails to incentivize critical mineral production in key partner countries that do not have a free trade agreement with the United States, including Indonesia, Brazil, South Africa, and Namibia.

The U.S. is not in a unique situation in this regard. The EU’s Critical Raw Materials Act puts the target at 10 percent domestic capacity for annual consumption by 2030. The act also aims to ensure that no more than 65 percent of annual consumption comes from a single third country. We all know who the third country is. Many observers have called even those objectives – which would leave the EU reliant on imports for up to 90 percent of annual consumption, 65 percent of which could come from China – overly ambitious.

The return of Donald Trump to the U.S. presidency continues to turn up the heat on this issue. It was during his first administration that intense attention was brought to the issue of critical minerals in the first place. Trump has already issued at least three executive orders that speak directly to the topic and seek to speed up development of mining (including critical minerals, oil and gas, and even coal), including by dismantling regulatory hurdles for the domestic mining industry. But the administration’s disregard for climate change considerations, the lack of an integrated industrial strategy, the broad tariff-based logic and aversion to multilateral, collaborative approaches are likely to lead to decreased critical mineral resilience overall.

 

China’s Vulnerability Paradox

Given the level of dominance, it is easy to gloss over the fact that China’s current dominance in global critical minerals supply chains stems from a deep historical sentiment of vulnerability and continued reliance on imports of raw commodities (and, as it turns out, the continued export of finished products at the other end of the supply chain as well).

This is still true for the supplies of most raw minerals, something I cover in my book, “China’s Vulnerability Paradox.” China’s large share of global rare earths production is an outlier. A 2018 study published in the Proceedings of the National Academy of Sciences (PNAS) estimated that China is more than 50 percent import dependent for 19 out of 42 nonfuel minerals, including iron ore and copper, but also cobalt, lithium, beryllium, niobium, chromite ore, platinum group metals (platinum, palladium, and rhodium), tantalum and others. And in some cases, China’s production capacity is plateauing (see potash, for instance).

This reality shows in the content of critical minerals export controls China has enacted over the past few years (in December 2023, December 2024, and February and April 2025). These have targeted relatively unique minerals (such as gallium and germanium), some niche metals (such as tungsten and bismuth), and rare earths that have strategic value, relatively low substitution potential, and where China has strong domestic production, not more broadly used base metals or minerals (such as copper or iron ore).

But China has other layers of vulnerability and exposure as well. Given the level of entwinement with global markets, there are second order effects and unintended consequences of using export controls as a tool to increase economic security, as the United States is discovering in the case of its own export control measures against China.

The Chinese government knows that export controls can raise global prices and incentivize production outside of the country. Rising global prices in minerals where China does not dominate raw production (say cobalt, nickel or lithium) would impact Chinese importers, in a context where low prices have served Chinese interests.

Here, it is always key to keep in mind the domestic political economy roots of China’s international behavior. China’s antimony production has actually been rapidly declining over the past few years, and antimony prices have risen sharply (by 250 percent in 2024 alone). This is hurting Chinese importers. Some analysts have argued that China’s antimony export restrictions were not so much aimed at a global audience, but rather at ensuring enough supplies stay at home to supply the domestic manufacturing industry.

Importantly, China has structured its export controls so that the extent of the control and its coverage can be adjusted over time.

 

A Path Forward: Asymmetric Resilience

The de-risking paradigm does not reckon with the fact that China’s dominance will continue to be a reality for the foreseeable future. It also fails to take good measure of the interconnectedness of global critical minerals supply chains as both a structural feature and an important component of supply chain resilience. We know, for instance, that a largely onshored supply chain would not necessarily be the most resilient, given the possibility of domestic supply shocks, quite apart from the fact that it remains uneconomical and unrealistic in most cases.

The asymmetric resilience approach I propose seeks to recalibrate rather than eliminate areas of vulnerability, building on defensive, assertive, plurilateral, and stability pillars.

To start, there is indeed a need for defensive resilience strategies. Certain defense considerations mandate a bolstering of supply security for niche minerals that can involve onshoring, but quantities needed are limited. Strategic stockpiling can also be a powerful ballast. In a productive example, the Australian government committed to investing AU$1.2 billion toward establishing a critical minerals reserve flexible enough to include offtake agreements and selective stockpiling, with the option to make this available to select partners. Urban mining (recycling) is another option for boosting domestic production.

Trade diversification as a general objective is valid. No country wants to overly depend on one source of supply. The difficulty here is to formulate comfort zones – the EU has formulated a ceiling of 65 percent dependence on one source.

The de-risking paradigm tends to lean on such defensive understandings of resource security. Yet, to thrive, an assertive posture is needed. This includes both investing at home to develop strong leadership in the face of the rapid changes required by the current tech/green fourth industrial revolution, and also targeting areas where positions of strength can be enhanced or created, given China’s deep enmeshment in global markets and remaining import and export vulnerabilities. In other words, instead of trying to duplicate Chinese positions of strength – for instance by seeking to match China’s refining prowess pound for pound in every mineral – efforts can be devoted to building targeted areas of dominance.

To more effectively drive critical minerals security, a more multifaceted understanding of supply chains is needed, close to Henry Farell and Abraham Newman’s “networked” understanding of market power. There are many nodes, players, and layers in global commodity markets, geographic and structural. Resource security does not stop at the border; investment flows and ownership structures, the technology frontier, industrial ecosystems, market power, pricing and the role of commodity exchanges, transport infrastructure, and even the role of the U.S. dollar deserve consideration. A strong industrial strategy should include upstream components – some critical minerals mining and refining, as well as magnet manufacturing, perhaps facilitated via some negotiated technology transfers and investments from China. But it must also include leaning on existing strengths, pushing hard on R&D and technology development, financing and pricing strategies, and third country relations.
There can be no one-size-fits-all strategy. Some commodities can be stockpiled, others less easily so. Some commodities are needed in such small quantities that many countries developing stockpiling strategies would overshoot collective resource security goals. In some cases, it may make sense to build more capacity at home, especially in the refining and processing segments. In others, it won’t make sense. Community engagement and consent as well as regulatory considerations make the opening of refining and processing plants in North America or Europe a more complex undertaking – and there are good reasons for this. This means other paths to resilience must be pursued, paths that will remain international in nature.

The third pillar must then be plurilateral. The U.S. or the EU cannot achieve critical mineral security on their own. A networked understanding of global commodity markets makes clear the need to forge plurilateral solutions. Close exchange and cooperation with multiple partners clearly yield benefits, and to some extent this was the approach taken with the Mineral Security Partnership. A significant change in how producers in the Global South are approached is also needed, if strong development pathways are to be supported.

Finally, a positive vision for an end game must be developed. Critical minerals have become securitized in a way that resembles an economic security dilemma, where both sides’ pursuit of security in the context of mistrust leads to a decreased sense of security everywhere. Drawing on Thomas Schelling’s influential 1966 work “Arms and Influence” – and as elaborated on more recently by Bonnie Glaser, Jessica Chen Weiss, and Thomas Christensen in the context of U.S. policy on Taiwan – it is important to conceive of the relationship between China’s perception of resource security, its behavior, and Western perceptions of resource security in an interactive way.

While increasing one’s own resource security is a worthy goal, beyond recalibration, it cannot feed the current escalatory dynamic and encourage the further weaponization of critical minerals, as this will have deleterious effects on everyone’s security. The creation of strength and leverage should be paired with the creation of credible reassurances, for instance regarding a commitment to stability, transparency, and continued open access for most metals and minerals.

Asymmetric resilience is thus at once a more systemic and a more targeted approach to fulfilling critical mineral security objectives, exploring the possibility of mitigating rather than eliminating vulnerabilities and developing targeted areas of dominance. Built on defensive, assertive, plurilateral, and stability pillars, it takes into account feasibility, the variegated nature of different critical mineral supply chains, a networked understanding of global critical minerals security, and the need to act in concert with others, aiming for a recalibrated global equilibrium in the pursuit of the shared end goal of security, resilience, and stability.

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