China's Pivotal Role in the Global Critical Minerals Supply Chain

China dominates the $450 billion global critical minerals market, controlling 60% of processed mineral exports and excelling in battery materials and electric vehicles (EVs). It leads in both imports and exports of raw and processed materials, cementing its supply chain influence. While Western nations focus on importing finished goods, India struggles to move beyond being a net importer. Efforts by the US and India to reduce dependence on China highlight the need for strategic investments to compete in this vital industry.

China has solidified its position as an indispensable player in the global supply chain of critical minerals, an industry valued at $450 billion in 2023. According to an analysis of UN COMTRADE data, the nation commands a staggering 60% share in processed mineral exports, worth $14 billion, and continues to dominate key segments of the market.

Although China ranked third in exporting raw materials such as lithium, cobalt, and graphite, it emerged as the undisputed leader in processed mineral exports, controlling nearly 59% of the global market. In comparison, Chile, the second-largest exporter, trailed far behind with just 7.1% of the market share. The significance of this dominance extends beyond raw and processed materials; it also plays a crucial role in the production of battery materials, where China accounted for 20.8% of global exports—just slightly behind South Korea’s 21.6%.

China's role in the electric vehicle (EV) ecosystem is even more pronounced. The country led the world in exports of both battery packs and EVs in 2023, capturing 26.1% and 31.8% of the market, respectively. These figures are nearly double those of the second-largest exporters in each category. Such dominance highlights China's strategic control over not just raw materials but also the finished goods that are critical to the future of energy and transportation.

Import Dominance: A Testament to Market Control

China's influence extends into imports as well, underscoring its comprehensive grip on the critical minerals trade. The country accounted for 62% of global raw material imports for lithium, cobalt, and graphite, while also holding significant shares in imports of processed minerals (15%) and battery materials (17.5%). This dual role as both a major importer and exporter reinforces its pivotal position in the global supply chain.

Interestingly, when it comes to processed mineral trade, China ranked second globally in 2023, but still led in battery material imports. This balanced dominance across exports and imports illustrates China’s ability to leverage its vast industrial capacity and infrastructure to maintain its supply chain hegemony.

Western Nations Focus on Finished Goods

While China excels in raw materials and intermediary products, Western countries dominate the import of finished goods. The United States, Germany, France, Belgium, and Italy were among the top importers of EVs and battery packs. Together, the US, Germany, the UK, and France accounted for over half of global EV imports. Additionally, Germany, the US, and South Korea alone were responsible for 40% of the world’s battery imports, emphasizing their reliance on these advanced products to support their domestic industries.

India’s Aspirations and Challenges

India, too, has been striving to establish a foothold in the critical minerals supply chain. However, its current position is more reflective of a net importer rather than a competitive exporter. India ranks as the ninth-largest exporter of raw materials, but its influence diminishes further along the supply chain. In processed mineral imports, it holds the 13th spot globally, and in battery material supply, it ranks 21st.

When it comes to finished goods, India fares slightly better. It was the eighth-largest exporter of battery packs in 2023 but ranked 14th in battery material exports. These figures highlight the challenges India faces in climbing the value chain, as it struggles to transition from being a consumer of finished products to a contributor of intermediary materials.

Global Efforts to Diversify Supply Chains

Amid China’s dominance, other nations are taking steps to reduce their dependence on its critical mineral supply chain. Recently, former US President Donald Trump signed an executive order aimed at securing the United States’ position in this strategic sector. The move seeks to strengthen domestic capacities and lessen reliance on Chinese exports.

India, too, has expressed aspirations to play a larger role in this market, but the path forward requires significant investment in infrastructure, technology, and policy frameworks to compete with China’s scale and efficiency.

China’s unparalleled dominance in the critical minerals supply chain is a testament to its strategic foresight and industrial might. From raw materials to finished goods like battery packs and EVs, the country’s influence spans the entire spectrum of this essential industry. As other nations, including the US and India, work to establish themselves as competitive players, China’s grip on the market underscores the importance of strategic planning and investment in this rapidly evolving sector.