RESOURCE RIVALRY

EUROPE AND THE US INCREASINGLY VIEW CHINESE CONTROL OVER SUPPLY CHAINS AS A STRATEGIC THREAT

- Bruno Surdel

Critical raw materials are a hot topic in global economics and geopolitics. They are essential to produce advanced technologies, energy transition, and national security.

Access to them has become a priority for key global players: the United States, China, and the European Union.

China has consistently established itself as a dominant player in the extraction, processing, and supply of critical minerals for years. Meanwhile, Europe and the US increasingly view Chinese control over supply chains as a strategic threat, seeking to diversify their raw material sources and reduce their dependence on Beijing.

China’s domination currently controls approximately 60% of global rare earth production and processes over 85% of these raw materials. These materials are essential to produce magnets for electric motors, wind turbines, solar panels, mobile phones, and various military systems. Beyond rare earths, China has the largest processing capacity for critical minerals such as lithium (58% of global market), cobalt (70%), and graphite (90%), making Chinese production and exports crucial for the electric vehicle sector, including in the EU.

In recent years, China has also invested in developing mineral extraction in Chile and Argentina, entering into lithium supply agreements. In the Democratic Republic of the Congo, China controls approximately 70 % of cobalt mining. In Indonesia they are expanding nickel smelters, controlling approximately 75% of production, and supporting local projects to more effectively control supply chains.