A strategic advantage with global implications

China’s dominance in critical minerals is shaping the global green transition—but at what cost?

The battery in an electric car and the magnets in wind turbines rely on critical minerals controlled by China. This gives the country a powerful role in the green transition, but it also creates challenges for the rest of the world.

China’s role in critical minerals

China has long been the global leader in producing rare earth elements—a group of 17 metals essential for technologies like electric vehicle motors, wind turbines, and mobile phones.

“China’s dominance gives it a strategic advantage but also exposes vulnerabilities for other nations,” says Gørild Heggelund, research professor at the Fridtjof Nansen Institute, Oslo, Norway. While China controls over 60% of global rare earth production, the country is heavily dependent on imports for certain materials, such as cobalt and lithium for batteries.

“Almost all the cobalt used in China comes from the Democratic Republic of Congo. This makes their supply chains vulnerable,” Heggelund explains. However, China has secured its position by dominating the processing phase, where raw materials are turned into usable components.

“China’s focus on processing has allowed it to maintain control without owning all the mines,” she says. “But it has become reliant on imports for parts of its supply as domestic policies aim at restricting mining and processing to conserve resources and reduce environmental pollution.”

U.S.-China rivalry

The competition between the U.S. and China extends to critical minerals, turning them into a key battleground in the race for green technology.

“China’s strategy of building entire value chains in renewable energy is not new—it started in the 1990s,” says Iselin Stensdal, a researcher on China at the Fridtjof Nansen Institute. China’s access to raw materials has been a cornerstone of its leadership in solar panels, lithium batteries, and electric vehicles. While the U.S. is catching up, China remains ahead in many key technologies.

Recent political tensions have escalated. China recently banned the export of three critical minerals to the U.S. in response to American efforts to restrict Chinese access to advanced technology stating national security grounds.

“The rivalry between the U.S. and China is marked by a retaliatory approach, with both nations responding to each other’s actions through countermeasures,” explains Stensdal.

What it means for the world

China’s dominance presents a dilemma for nations worldwide. While the world depends on China for critical materials, this reliance also creates risks.

Heggelund leads a project aimed at helping nations like Norway strike a balance: reducing dependency on China while building sustainable and competitive supply chains. “We cannot completely decouple from China, but we can diversify our sources and learn from their strategies,” she concludes.

Provided by
Fridtjof Nansen Institute