China's Dominance in Critical Mineral Supply Chains Poses Global Risks, IEA Report Warns

The International Energy Agency (IEA) has released a report highlighting the increasing concentration of critical mineral supplies essential for clean energy technologies, with China solidifying its dominance in refining and processing capacities.

According to the IEA's May 21, 2025 report, the top three producers accounted for 86% of the market share for key materials such as copper, lithium, cobalt, graphite, and rare earth elements in 2024, up from 82% in 2020. China, in particular, refines 19 out of 20 strategic minerals and holds approximately 75% of processing capacity. This concentration poses significant risks to global energy and economic security, as supply chain disruptions from trade tensions, weather events, or technical failures could lead to soaring prices and reduced industrial competitiveness.

China's control over critical minerals extends beyond mining to refining and processing. The country refines 99% of battery-grade graphite, over 80% of refined magnet rare earths, 70% of refined cobalt, and 40% of refined copper. Additionally, China has implemented export restrictions on critical minerals, including gallium, germanium, and graphite, affecting global supply chains.

In response to these challenges, the United States has undertaken several initiatives. Under President Trump, the U.S. is seeking alternative sources, including new deals with Ukraine and initiatives in deep-sea and domestic mining, while facing constraints from China's export restrictions. The IEA report also warns of a projected 30% shortfall in copper supply by 2030, critical for electric infrastructure, even as current global mineral markets remain well supplied and prices have generally fallen.

The concentration of critical mineral supply chains poses several risks. Disruptions due to trade tensions, weather events, or technical failures could lead to soaring prices and reduced industrial competitiveness. Dependence on a limited number of suppliers increases vulnerability to shocks and disruptions, even in a well-supplied market. China's dominance and export controls have heightened geopolitical tensions, prompting other nations to seek diversification strategies.

China's dominance in critical minerals has been growing over the past few decades, with current concentration levels among the highest recorded, underscoring the urgency for diversification efforts. The IEA calls for diversification and strong government policies to secure supply chains.

The IEA's report underscores the urgent need for diversification and strong government policies to secure critical mineral supply chains. As the global demand for clean energy technologies grows, addressing these supply chain vulnerabilities becomes imperative to ensure energy and economic security.