China’s push into the overseas market is rapidly reshaping the global supply chain for critical minerals. The country’s grip on raw materials and the energy transition is tightening, raising concerns about Western competitiveness.

A report by Climate Energy Finance (CEF) shows that since 2023, Chinese firms have deployed more than $120 billion across lithium, copper, nickel, rare earths, and bauxite projects worldwide.

The control over these minerals is increasingly viewed through the lens of national security and military competition, as recent concerns over the tungsten price spike show.

“China grasped this reality earlier, and pursued it more systematically than many others,” Prof. Marina Zhang from the University of Technology Sydney said in the report.

According to CEF, China put more than $220 billion into downstream industries. These include battery manufacturing, electric vehicles, and renewable energy infrastructure – forming a vertically integrated system. China now controls about 90% of global rare earth refining, roughly 60% of lithium processing, and more than 70% of cobalt refining, giving it significant influence over pricing and availability in markets critical to decarbonization.

Price Watch: VanEck Rare Earth and Strategic Metals ETF (NYSE:REMX) is up 13% year-to-date.

Emerging Market Tug-Of-War

Much of the recent expansion has concentrated in resource-rich regions across Africa, Latin America, and Southeast Asia.

In the Democratic Republic of Congo, Chinese companies have deepened their dominance in copper and cobalt production, while in Indonesia, sustained investment has helped transform the country into the world’s #1 nickel supplier. Zimbabwe and other African nations have also seen the rapid development of lithium projects backed by Chinese capital.

The model itself has evolved. Instead of pursuing purely extractive projects, Chinese firms are increasingly partnering with host governments. In exchange for long-term supply agreements, China helps to build local processing capacity and infrastructure such as ports, railways, and power systems.

“Together with its scale, a defining feature of China’s outbound foreign direct investment surge is its approach to delivering tangible benefits to partner nations,” the report notes.

Risks and Opportunities

China’s impact on global production is monumental. Currently, it has domination from source materials (upstream) to completed products (downstream).

Efforts to counterbalance are underway, including the U.S.-led Minerals Security Partnership and the European Union’s Critical Raw Materials Act, but replicating China’s scale and integration is likely to take years. In the meantime, Chinese companies continue to expand.

For retail investors, China’s dominance presents both risks and opportunities. Greater control over processing and supply could amplify price volatility, especially for Western-listed miners that remain exposed to spot markets. That environment is excellent for short-term traders and speculators but requires high conviction for long-term buy-and-hold investors.

Meanwhile, constrained access to critical minerals outside China’s orbit may support higher long-term prices. This scenario benefits producers positioned within emerging non-Chinese supply chains.

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