How does China become a real mineral champion and why does the world depend on it for critical minerals?

From the smartphone in your hand to the electric cars, and from wind turbines powering cities to fighter jets securing borders, the critical minerals are the invisible backbone of the modern economy. Yet, the supply chains of these indispensable resources are overwhelmingly dominated by one nation: China.  Over the decades, China has become a real mineral champion, controlling not only the mining but also the crucial refining and processing of rare earths and other critical minerals.

How does China become a real mineral champion? 

China holds vast reserves and has successfully discovered numerous types of minerals, including rare earths, lithium, copper, and silicon. It began to prioritise rare earths in the 1980s. Since the 1990s, Beijing has strategically built an industrial ecosystem for mining, processing, and refining. Former Chinese leader Deng Xiaoping famously declared in 1992: “The Middle East has oil; China has rare earths,” underscoring Beijing’s strategic intent. And today, China produces about 60-80% of the world’s rare earths, tungsten, gallium, germanium, and antimony.

• Rare earth refining: 85–90% of global capacity (approximately)
• Graphite: 65–70% of global supply (approximately)
• Lithium refining: 60% (approximately)
• Cobalt processing: 70% (approximately)
• Gallium and Germanium: over 90% 

China’s government invested heavily in rare earth mining and refining, and Chinese companies aggressively increased exports. By the mid-1990s, China was producing over 85% of the world’s rare earths. By 2010, China accounted for roughly 95% of global rare earth oxide supply, and that year it demonstrated its leverage by halting exports to Japan during the Senkaku Islands dispute.

The southern city of Ganzhou is a global hub for rare earth mining and processing. Its mines and factories, backed by generations of local expertise, are the bedrock of China’s dominance. However, depletion of resources is a growing challenge, forcing Chinese companies to import raw materials from Africa and Cambodia or invest in overseas projects such as a $25 million tungsten plant in Thailand.

China uses export licenses to regulate shipments of critical minerals, creating supply chain bottlenecks for countries like the US and Japan. Even when rare earths are mined outside China, Beijing’s dominance in refining ensures control.  For instance, the Mountain Pass mine in California, America’s only rare earth source, still sends its ore to China for processing. Cheaper labor, faster permitting, and more flexible environmental and labor regulations compared to many Western countries also contributed to China’s ability to develop its mineral resources efficiently. 

Why does the world depend on China?

China has long dominated the mining and processing of rare earth minerals, as well as the production of related components like rare earth magnets. It mines about 70 per cent of the world’s rare earths and processes approximately 90 per cent of the supply. China also maintains near-total control over the supply of heavy rare earths, including dysprosium and terbium.

The world depends on China for critical minerals because of its vast mineral reserves, substantial investments in exploration and mining globally, and, most crucially, its dominant role in processing and refining these materials. China controls the vast majority of the world’s processing capacity, particularly for rare earths, lithium, and silicon, making it a choke point in the global supply chain for industries like clean energy and defense. 

India’s reliance on China for critical minerals

India is heavily dependent on China for several critical minerals. Between 2019 and 2024, import data shows over 40% reliance on six key minerals: bismuth (85.6%), lithium (82%), silicon (76%), titanium (50.6%), tellurium (48.8%), and graphite (42.4%). These minerals are essential for sectors such as EV batteries, solar power, steel, and pharmaceuticals. However, with China controlling 58% to 80% of global refining and production, India faces significant supply chain vulnerabilities and risks of disruption.

Top 10 countries that produce the most minerals

According to the World Population Review, China is the world’s leader in mineral production by a significant margin, with 4.6 billion tons per year in total, compared to the United States in second place with 2.2 billion tons. Russia has the third most mineral production, roughly 1.7 billion tons, with Australia close behind at 1.4 billion. India is fifth with 1.1 billion, the final country to cross the billion-ton mark.

1. China  
2. United States  
3. Russia  
4. Australia  
5. India  
6. Indonesia  
7. Saudi Arabia  
8. Canada  
9. Brazil   
10. Iran 

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