China Controls Half of Critical Minerals Powering AI and EVs

While artificial intelligence and electric vehicles dominate technology headlines, a less visible competition determines which nations will actually build these systems at scale. China has secured control over the mines, refineries, and supply chains for the minerals that make modern technology possible.

Beijing now controls more than half of global critical minerals production, including 70 percent of rare earth elements and an estimated 87 percent of all processing and refining capacity, according to December 2025 data from the Africa Center for Strategic Studies. These materials—lithium, cobalt, nickel, and rare earth elements—form the foundation for AI hardware, semiconductor manufacturing, EV batteries, and defense systems.

Why it matters

Control over critical mineral supply chains translates directly into geopolitical leverage. Countries dependent on these imports face potential supply disruptions during trade disputes or conflicts, as the United States experienced in 2024 when China withheld rare earth exports during a tariff exchange. For nations racing to build AI infrastructure and transition to clean energy, mineral access has become as strategically important as oil was in the 20th century.

Aggressive acquisition strategy

Chinese state and private firms have accelerated their buying spree. The U.S.-based Center for Strategic and International Studies reported that Chinese acquisitions of strategically significant mineral deposits reached their highest level in a decade in 2024, with at least 10 deals valued above $100 million. Spending continued to climb in 2025.

Between 2023 and 2026, Chinese entities spent over $6.5 billion on critical mineral assets, including a $2 billion Argentinian lithium mine purchase and a $1.73 billion copper mine acquisition in Botswana. This aggressive positioning across South America and Africa has given Beijing the ability to influence global pricing and availability.

Western response takes shape

The United States has begun mobilizing countermeasures. In February, Vice President JD Vance announced plans to organize allied nations into a preferential trading bloc designed to reduce dependence on Chinese mineral supplies. "We want to eliminate that problem of people flooding into our markets with cheap critical minerals to undercut our domestic manufacturers," Vance stated at a meeting attended by representatives from 55 countries, including India and Japan.

The Trump administration also launched Project Vault, a critical minerals stockpiling initiative with $10 billion in seed funding, according to Reuters.

India's vulnerability

India faces particularly acute exposure. The country imports approximately 82 percent of its critical minerals, with lithium, cobalt, and nickel imports exceeding $8 billion in the 2023-24 fiscal year. In 2024-25, India imported nearly 54,000 tons of rare earth magnets, with 93 percent sourced from China.

The Indian government has launched a $3.6 billion National Critical Mineral Mission aimed at reducing import dependence from the current 85-95 percent range to 50 percent by 2035. New partnerships with the United States, United Kingdom, Australia, Chile, the Democratic Republic of Congo, and the European Union are intended to diversify supply sources.

However, the timeline for meaningful supply chain restructuring extends years into the future, leaving India and other import-dependent nations exposed to potential supply disruptions in the near term.

These details were first reported by NDTV.