China's dominance in critical minerals

Topic: Primary Activities: Gathering, Pastoralism, Agriculture and Mining · NCERT: Beyond NCERT

Meaning

China's dominance in critical minerals means that China refines (processes into a pure, usable form) most of the world's rare earths, graphite, gallium, germanium and cobalt, even when the ore is mined in other countries. It matters because China has used this hold as a weapon: its export curbs from 2023 to 2025 pushed India, the USA, Japan and the EU to build alternative supply chains. For these countries, critical-mineral supply is now a question of national security.

Explanation

What critical minerals are and why demand is rising

• Critical minerals are minerals a country needs for clean energy, electronics and defence, and whose supply could easily be cut.

• Examples: lithium, cobalt, nickel, graphite, rare earths, gallium and germanium.

• Batteries, electric vehicles (EVs), wind turbines and solar panels need far more of these minerals than older technology did.

• How a mineral becomes a security issue:
• Demand rises fast.
• Only a few countries control the mining or the refining.
• Supply then becomes a matter of national security. This contest is called the "critical-minerals race".

How China's dominance works: mining vs refining

• Mining is spread out, but refining is concentrated.
• Copper comes mainly from Chile, the DR Congo and Peru.
• Lithium comes from Australia (hard rock) and the Lithium Triangle (brine).

• Cobalt is mined in the DR Congo but refined in China.

• China also leads in rare-earth mining:

• World rare-earth mine production in 2024 was 390,000 t REO (rare-earth-oxide equivalent: the standard unit for counting rare earths) [4].
• China mined 270,000 t, about 69% of the total [4].

• China also has the largest reserves, 44 million t [4].

• Rare earth elements (REEs) are the 15 lanthanides plus yttrium and scandium.

• Neodymium and dysprosium go into strong permanent magnets (magnets that keep their magnetism).

• These magnets are used in EV motors, wind turbines, missiles and phones.

• Result: control over refining gives China a "choke point". It can slow down or stop supplies to other countries.

Export curbs: minerals as a geopolitical weapon

• Export curbs are limits on selling goods abroad. China imposed them in stages:

Year	Minerals or technology restricted	Main use
2023	Gallium and germanium	Chips and solar cells
2023	Graphite	Battery anodes (the negative end of a battery)
2024–25	Rare-earth processing technology and magnets	EV motors, turbines, defence

• Effect:
• Importing countries saw how risky it was to depend on one supplier.
• They moved towards "friend-shoring", which means buying from friendly countries.

How other countries are responding

• Minerals Security Partnership (MSP): a US-led group of countries that pool money and projects for critical minerals. India joined in 2023.
• Quad critical minerals initiative: India, the USA, Japan and Australia work together on a secure supply.
• India's own steps:
• List of 30 critical minerals (2023), issued by the Ministry of Mines. It includes lithium, cobalt, nickel, graphite, REEs, gallium and germanium.
• National Critical Mineral Mission (NCMM, 2025). It aims at self-reliance, using minerals from both domestic and foreign sources [3].
  • It covers the whole value chain: exploration, mining, beneficiation (raising the grade of the ore), processing and recycling [3].
  • It runs from FY 2024-25 to FY 2030-31 [2].
• KABIL (Khanij Bidesh India Ltd) is a joint-venture company set up by the Ministry of Mines to buy critical-mineral assets abroad [1].

Where it occurs

• China:
• Bayan Obo, in Inner Mongolia, about 150 km north of Baotou, is the world's largest rare-earth deposit. Rare earths are mined there together with iron ore.

• Chinese refineries also process ore mined abroad, for example cobalt from the DR Congo.

• Other rare-earth producers, 2024 [4]:

• USA: 45,000 t, from Mountain Pass, California [4]
• Burma (Myanmar): 31,000 t [4]
• Australia, Nigeria and Thailand: about 13,000 t each [4]

• India: 2,900 t [4]

• Reserves: China 44 million t, Brazil 21 million t and India 6.9 million t [4].

• India's rare earths come mostly from monazite in the beach sands of Kerala, Tamil Nadu and Odisha.

• India's alternative-supply efforts:

• Argentina: on 15 January 2024, KABIL signed an agreement with CAMYEN SE, a state company of Catamarca, for lithium exploration over 15,703 hectares [1]. This is the first lithium exploration and mining project by an Indian government company [1].
  • KABIL holds 5 brine-type lithium blocks. Its feasibility study is targeted for December 2027 and production for end-2029 [2].
• Australia and Chile: KABIL is also exploring assets in these countries [1].

• Reasi, Jammu and Kashmir (2023): the GSI found inferred lithium resources at Salal-Haimana. This was India's first major lithium find.

• Lithium sources outside China: Australia is the top producer, from hard rock. Chile is 2nd, from brine [5].

Don't confuse with

• Mining share vs refining dominance: the key point is that China refines most critical minerals even when the ore is mined elsewhere. For example, DR Congo cobalt and lithium are mined outside China, but refining is concentrated in China.
• Bayan Obo vs Mountain Pass: Bayan Obo (Inner Mongolia, China) is the world's largest rare-earth deposit. Mountain Pass (California) is the USA's rare-earth mine, which produced 45,000 t in 2024 [4].
• India's critical minerals list (2023) vs NCMM (2025): the list names the 30 minerals India considers critical. The NCMM is the mission that secures them across the value chain, from FY 2024-25 to FY 2030-31 [2].
• Minerals Security Partnership vs Quad initiative: the MSP is a US-led group of many countries that India joined in 2023. The Quad initiative involves only four countries: India, the USA, Japan and Australia.

Prelims Hooks

• China mined 270,000 t of the world's 390,000 t of rare earths (REO) in 2024, about 69%. India mined 2,900 t [4].
• Rare-earth reserves: China (44 million t) > Brazil (21 million t). India holds 6.9 million t, mostly in monazite beach sands of Kerala, Tamil Nadu and Odisha [4].
• Bayan Obo, the world's largest rare-earth deposit, is in Inner Mongolia, near Baotou.
• China's export curbs: gallium, germanium and graphite in 2023; rare-earth processing technology and magnets in 2024–25.
• India joined the Minerals Security Partnership in 2023. India's list of 30 critical minerals also came out in 2023.
• KABIL–CAMYEN lithium agreement: Catamarca, Argentina, 15 January 2024, 15,703 ha [1]. Trap: KABIL is a joint venture under the Ministry of Mines, not the Ministry of External Affairs.

Mains Points

• Concentration risk (GS-III):
• Mining is spread across Chile, Australia, the DR Congo and the Lithium Triangle, but refining is concentrated in China.
• China's 2023–25 export curbs turned minerals into a geopolitical weapon and threatened EV, solar, electronics and defence supply chains.

• Importing countries are responding with friend-shoring through the MSP and the Quad.

• India's response and its gaps:

• Steps taken: the 30-mineral list, the NCMM covering exploration to recycling [3], KABIL's assets in Argentina, Australia and Chile [1], and the MSP and Quad.

• Gaps: weak processing capacity at home, and long delays between finding a deposit and producing from it (for example, the Reasi lithium find). India produces only 2,900 t of rare earths even though it holds 6.9 million t of reserves [4].

• Environmental cost of building other supply chains: new supply means more open pits and more brine evaporation in water-scarce deserts such as the Atacama. This raises the need for sustainable mining. It also involves resource nationalism (countries keeping control of their own minerals): Chile and Bolivia now keep lithium under state control.

Related concepts

• Chilean copper belt
• Lithium Triangle
• Pilbara
• Bayan Obo
• Shale gas
• Deep-sea mining
• International Seabed Authority

Read more

• World mineral regions and the critical-minerals race