New analysis shows the degree to which critical minerals and rare earth elements are dominated by Chinese supply chains.
Over the past decades, China has expanded its critical minerals capacity and become the leading global producer of critical minerals. Despite years of diversification efforts by other countries, supply chains are growing more concentrated in China due to the nation’s ability to refine and process critical minerals at a lower cost than other countries.
Refined and processed materials are necessary inputs in advanced technologies, electric vehicles, military hardware, and clean-energy systems. These materials often make up only a small fraction of a finished product but are necessary to its function and are difficult or impossible to substitute. Because of this reality, western nations increasingly view Chinese dominance in the supply chains of critical minerals and rare earth elements as a liability to national security, industrial policy, and energy security.
To that end, in February 2026, a global coalition assembled to confront Chinese dependence head on. The White House hosted representatives from 54 countries at its inaugural Critical Minerals Ministerial, where the US Department of State announced the creation of the Forum on Resource Geostrategic Engagement (FORGE), a multilateral initiative designed to spur investments in supply chains outside of China.
FORGE was created as the successor to the Minerals Security Partnership (MSP), a small coalition of countries working together to build diversified supply chains outside of China’s orbit. FORGE members include all former MSP countries, along with several others that have signed multilateral or bilateral agreements, yet the membership list continues to evolve as new partners join. FORGE seeks to broaden that effort with a larger coalition of mineral diplomacy, with the intention of protecting emerging supply chains from Chinese market manipulation and guarding against practices such as smuggling, tariff evasion, and the exporting of products at prices lower than their domestic market value (called “dumping”).
To understand both the necessity of multilateral collaboration in combating Chinese control of mineral supply chains and the challenges allies face in doing so, we first need to measure how dependent on China the world already is and whether meaningful diversification is still possible.
We pulled global trade data from the UN Comtrade database to build a data set that measures global dependence on Chinese products. For each country and product, we measured China’s share of imports by dividing the value of imports from China by the total value of imports from all countries. In total, the data set covers 20 critical minerals, rare earth, and downstream technology products across 88 countries from 2012 to 2024.
China Dominates Rare Earth and Critical Mineral Supply Chains
To show how China came to control these supply chains, we will follow one mineral through the data: lithium.
Lithium is mined in many parts of the world, but mining lithium is not the same as controlling the lithium supply chain. The largest sources of lithium are Australia, where lithium is mined from hard rock, and Chile, where it is extracted from brine. Hard-rock lithium is mined as spodumene concentrate, then refined into lithium hydroxide. Brine-based lithium typically is processed into lithium carbonate. Both lithium hydroxide and lithium carbonate then require additional refining before they can be used in advanced manufacturing, especially battery production.
One of the key differences between lithium from brines and lithium from hard rock is the destination in the battery supply chain. Lithium hydroxide is the preferred form for advanced and high-performance battery chemistries—cathodes (the building blocks to batteries) that use hydroxides perform better, hold charge longer, and degrade more slowly over the battery’s life cycle.
In 2025, the top two refining countries, China and Chile, controlled 90 percent of refined lithium supply, with China being the top supplier for almost every major refined critical mineral. Australia, despite being a FORGE member and the world’s largest producer of hard-rock lithium, exports nearly 100 percent of its spodumene concentrate to China for refining.
Chinese firms process lithium chemicals to battery-grade purity, manufacture cathodes, and produce lithium-ion battery cells at a scale and price few countries can match. This integrated supply chain allows China to consolidate market share not only in refined lithium, but also in the finished batteries used in electric vehicles, consumer electronics, cell phones, and military hardware. For example, the United States does not import refined lithium from China, but does import a very high portion of its lithium-ion batteries from China. (Notably, the United States does not import electric vehicles from China due to extremely high tariffs on Chinese vehicle manufacturers.)
Figure 1 shows each country’s reliance on China for lithium-ion battery imports, with a dropdown menu showing other mineral-related products. We define reliance as the share of total import value sourced from China.
Using the dropdown in Figure 1, select lithium oxide/hydroxide and lithium carbonates, the refined lithium products that sit upstream in the battery supply chain. These products show different trade patterns than finished lithium-ion batteries. Countries without large manufacturing sectors are less likely to import unfinished or intermediate materials, while finished products containing critical minerals move through much larger global markets. China’s dominance in refining does not appear as refined-product exports because China’s own battery industry absorbs much of that refined material. Once lithium is refined to battery-grade quality, China’s comparative advantage for price, scale, and manufacturing capacity for batteries becomes unmatched. (We see a similar story with cobalt: we observe minor Chinese export shares, even as China controls the majority of global cobalt refining.)
Figure 2 shifts from the global market in 2024 to trends in individual country exposure. The black bar represents the total annual value of US imports, while the red bar shows the value of the imports that came from China over the past 12 years. Use the dropdown menus to select any country and product in the data set.
In Figure 3, the blue bar shows the total import market for lithium-ion batteries across all countries in the data set. The black line shows China’s share of that market in each year.
Over the 12-year period we measured, the import market for lithium-ion batteries increased more than 26-fold. By 2024, China accounted for almost 60 percent of the global market for lithium-ion batteries in our data set. That same year, the global market was about $140 billion for the countries measured.
In Figure 3, switch the selector to lithium oxide/hydroxide. The data show a sharp global shift over the past decade. China went from controlling 15 percent of the market to more than 80 percent. As China gained market share in lithium oxide and hydroxide, the country also strengthened its cost advantage and the manufacturing capacity, both of which support its downstream battery industry.
This same story is common across many of the raw or refined products in our data. When China refines lithium or other critical minerals and consumes them domestically, the true market concentration isn’t seen in export data alone. The refined product appears in the export of products like batteries or magnets, which contain several mineral components. Chinese exports of these products are close to 70 percent for all the countries surveyed.
Figure 4 shows how an individual country’s reliance on Chinese supply chains has changed over time across the five largest global product markets in our data set. The black line shows the value-weighted average across products, meaning larger import markets have a greater effect on overall average reliance. For the United States, that average rose from 45 percent of imports coming from China in 2012 to 70 percent in 2024.
China’s economies of scale are reinforced by concentrating market share at multiple stages of the supply chain. Dominance in refined products reduces input costs for technologies like batteries, while dominance in battery manufacturing increases domestic demand for China’s own refined materials. The result is a self-reinforcing system: cheaper inputs support cheaper finished products, and cheaper finished products deepen global dependence on Chinese supply chains. China is approaching near-monopoly levels of market dominance across many verticals, and the trend is moving toward an even higher level of consolidation.
Chinese Market Dominance Results in Multilateral Action
These changes in the global supply chain helped drive the creation of FORGE. Many participating countries, including the United States, have concluded that resilience in critical minerals processing and advanced manufacturing is essential for energy security and national defense. The goal is not necessarily for every country to produce every input on its own, but to build trusted supply chains that reduce dependence on a single dominant supplier. The coalition’s own framing emphasizes coordinated investment, secure supply, and policies to protect non-Chinese producers from market actions that may undermine them.
Diversification almost certainly will come at a cost. Countries participating in FORGE are betting that protected and trusted supply chains are worth higher prices, especially in sectors that are tied to energy security and national defense. The open question is what this new critical minerals order will look like. Can the coalition build shared capacity across allied countries, with different countries specializing in mining, refining, processing, and manufacturing? Or will each country try to build its own parallel supply chain, duplicating costs and weakening the advantages of coordination?
China is likely to remain the lowest-cost producer of many refined and finished products in the near future. Any alternative that FORGE creates will take time: financing a project, building a facility, and bringing batteries or other finished products to market can take years. The data we present in this blog post suggest that the challenge is not simply replacing Chinese supply but rebuilding an entire chain of industrial advantage outside China’s control.
