The West Is Still Mining Around China’s Mineral Chokepoint

The mineral race has a bad habit of confusing holes in the ground with power. I keep seeing governments celebrate new lithium deposits, rare-earth talks and mining finance as if a shovel can undo two decades of industrial strategy. It cannot. A mine is the opening scene. The plot turns in refining plants, separation lines, magnet factories, battery-material facilities, export-license offices and the contracts that decide who gets paid.

That is why the new scramble for “critical minerals” deserves more skepticism than applause. Critical minerals are minerals judged essential to economic or national security and vulnerable to supply disruption, according to the U.S. Geological Survey¹. Rare earth elements are a set of 17 metals used in high-performance magnets, electronics, defense systems and clean-energy hardware, according to USGS publications². Lithium spodumene is a hard-rock lithium mineral that is commonly concentrated before it becomes battery-grade lithium chemicals, and USGS describes spodumene and brines as primary lithium sources for lithium-ion battery cathodes in its lithium research³. An offtake agreement is a contract to buy future production. Refining is the step that turns ore or concentrate into usable chemicals, oxides, metals or feedstock. Resource nationalism is the producer state’s push to control more value from its resources. Industrial policy is the state using money, rules or ownership to steer private investment toward strategic goals.

My view is blunt: the West has learned the right lesson, but it has not yet changed the balance of power. Current critical-minerals strategies are beginning to target the right chokepoints, but the evidence still shows more risk relocation than real independence from China.

The most important fact is also the easiest to miss. China does not need to own every mine if it controls the middle of the chain. In rare earths, the International Energy Agency says the value chain runs from extraction and beneficiation through chemical upgrading, separation into oxides, metal refining, alloying and magnet manufacturing, with separation as the technical core of processing in its rare-earth analysis⁴. In 2024, China accounted for 60% of mined magnet rare earths, 91% of refined output and 94% of sintered permanent magnet production, according to the same IEA report⁴. That is not a supply chain. It is a funnel.

The wider minerals picture is not much better. The IEA’s 2025 critical-minerals outlook found that the average share of the top three refining countries for key energy minerals rose from about 82% in 2020 to 86% in 2024, and that roughly 90% of refined supply growth came from the single leading supplier: Indonesia for nickel and China for cobalt, graphite and rare earths according to the agency⁵. For a broader group of 20 strategic minerals, the IEA says China is the dominant refiner for 19 of them, with an average refining share of about 70% in the same outlook⁵. If the test is “Can Western-backed ore become Western-usable materials without passing through Chinese processing?”, the answer is still often no.

Export controls make the chokepoint visible. On April 4, 2025, China’s commerce ministry announced export controls on medium and heavy rare-earth-related items, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium metals, alloys, oxides, compounds, targets and certain permanent magnet materials under MOFCOM Announcement No. 18⁶. The IEA later reported that April and May 2025 export volumes of affected rare earths and magnets fell sharply, leaving some automakers in the United States and Europe struggling to source permanent magnets in its rare-earth analysis⁴. This is the lesson: a non-Chinese mine can still feed a Chinese-controlled bottleneck.

The stronger Western response is real. The G7’s June 2025 Critical Minerals Action Plan does not simply chant “more mining.” It says members will coordinate on mining, processing, manufacturing and recycling; build standards-based markets; strengthen traceability; support local consultation; address pollution and land degradation; mobilize development finance institutions and multilateral development banks; and foster local value creation in mineral-rich developing countries under the G7 plan⁷. That is the right vocabulary. The question is whether it becomes enforceable contracts, not summit prose.

The United States has also moved from subsidies toward something closer to state capitalism with American legal characteristics. The Department of Energy restructured its Thacker Pass lithium deal in 2025 so the government received 5% equity ownership through warrants in Lithium Americas and another 5% through warrants in the Lithium Americas-General Motors joint venture, while financing facilities to manufacture lithium carbonate in Nevada according to DOE⁸. Lithium carbonate matters because it is a battery-grade chemical, not just dirt with promise.

The MP Materials deal is even more directly aimed at the rare-earth chokepoint. MP Materials announced a public-private partnership with the Department of Defense that includes a 10-year neodymium-praseodymium price-floor commitment, a 10-year magnet offtake agreement and a planned U.S. magnet capacity of about 10,000 metric tons after its new 10X facility begins commissioning in 2028 according to the company⁹. Reuters has described the broader Trump administration approach as converting support in strategic sectors, including critical minerals and semiconductors, into equity stakes to reduce reliance on China in a 2026 factbox¹⁰. I think that shift is significant. Price floors and offtake contracts solve a real market failure: nobody wants to finance a refinery whose product can be crushed by a low-cost incumbent before the loan is repaid.

But significant is not sufficient. The IEA says progress toward diversified refining is likely to be slow, with the top three refined-material suppliers projected to fall only marginally to 82% by 2035 under announced projects in its 2025 outlook⁵. In rare earths, existing and announced ex-China capacity meets only about 25% of projected 2035 refining demand outside China and well below 20% of magnet demand outside China, according to the IEA rare-earth report⁴. One U.S. magnet champion can reduce a U.S. vulnerability. It cannot, by itself, create a full alternative ecosystem of heavy rare-earth separation, metallization, alloying, magnet equipment, skilled labor and customers.

Producer countries are the other test. Zimbabwe’s lithium boom shows why. The country has pushed beneficiation, meaning more local processing before export, after first prohibiting exports of unbeneficiated lithium-bearing ore in 2022 and then announcing a lithium-concentrate export ban from January 1, 2027 according to the IEA’s policy tracker¹¹. That is resource nationalism in a rational form: Zimbabwe wants more than royalties from rocks.

Yet the boom also shows how easily the old extraction model mutates rather than dies. Transparency International Australia reports that Chinese companies have acquired the largest portfolio of lithium mining projects in Zimbabwe, that seven large lithium projects have been established with Chinese influence, and that governance risks include licensing, politically exposed actors, environmental and social impact assessments, consultation, community benefit and transparency in its Zimbabwe case study¹². Zimbabwe may win more processing. But if processing plants are foreign-financed, foreign-operated and tied to foreign downstream buyers, the country can still be stuck near the low end of the value chain, just one rung higher.

India’s Siberian rare-earth effort is even thinner evidence of diversification. Reuters reported on June 16, 2026, that India’s state-owned IREL is in talks with Rosneft to obtain samples from the Tomtor deposit in Siberia, with samples to be processed in Russia before shipment to India for analysis via MarketScreener’s Reuters feed¹³. Samples are not commercial output. Preliminary processing in Russia is not sanctions-proof logistics. A deposit controlled by Rosneft is not a clean allied supply chain.

The best counterargument is that Western governments are finally using the correct tools: public finance, equity participation, price floors, offtake agreements and standards-based markets. I agree. The IEA itself says diversification will not happen through market forces alone because projects in diversified regions face capital costs about 50% higher than incumbent producers and need tools such as price-stabilization schemes, volume guarantees, standards-based market access, co-investment, offtake agreements and shared de-risking in its 2025 outlook⁵. That is exactly why the G7, DOE and Pentagon moves matter.

But the correct tools do not prove the job is working. I would change my mind when I see three things at once: (1) commissioned non-Chinese refining, rare-earth separation, battery-material and magnet capacity operating through a price downturn, (2) a sustained fall in China’s midstream market share rather than more mine announcements, and (3) public project contracts showing revenue sharing, remediation funding, community consent and local training obligations that can actually be enforced.

My prediction is that by 2030 the West will have reduced a few acute vulnerabilities, especially in U.S. rare-earth magnets and North American lithium chemicals, but China will still dominate the midstream unless today’s plans become running factories. The indicator to watch is not the next mine ribbon-cutting. Watch whether Zimbabwe’s 2027 concentrate ban produces transparent local processing contracts, whether MP’s 10X facility commissions on schedule in 2028, and whether the IEA’s next few outlooks show China’s refining and magnet shares falling in measured tons, not press releases.