China's Strategic Dominance in Transition Minerals: The Global Energy Shift

China's strategic control over these resources underscores the need for diversified supply chains and international cooperation to ensure a stable and sustainable clean energy future.

A select group of minerals is at the core of the global energy transition, driving clean energy innovations and supporting key industries such as electric vehicles and advanced manufacturing. As countries push to meet ambitious decarbonization goals, the strategic control and supply chain dynamics of these minerals are becoming a defining factor in geopolitical and economic power. Within this landscape, China has emerged as the dominant force in transition mineral production, processing, and downstream technologies.

China's Rise as a Transition Mineral Powerhouse

Over the last two decades, China has systematically strengthened its control over the transition minerals sector. A new report by AidData, Power Playbook: Beijing’s Bid to Secure Overseas Transition Minerals, unveils how China has steadily built its dominance by financing mineral extraction projects across the developing world. This strategic maneuver has positioned the country as a global leader in processing and refining essential materials.

Key Transition Minerals and China's Supply Chain Control

The report focuses on five critical transition minerals identified by the International Energy Agency (IEA): copper, lithium, nickel, cobalt, and rare earth elements. These minerals are vital for renewable energy technologies, including batteries, wind turbines, and electric vehicle components. China's approach to securing these resources involves significant investments in extraction and processing infrastructure, leveraging official development finance initiatives such as the Belt and Road Initiative (BRI).

Financial Influence and Global Supply Chains

AidData’s latest research highlights how China has utilized state-backed financial mechanisms to expand its influence in the transition minerals sector. The newly compiled Chinese Finance for Transition Minerals Dataset, Version 1.0 captures $56.9 billion in official Chinese loan commitments for overseas mineral extraction and processing projects between 2000 and 2021. The dataset provides granular details on financial contributions, mine characteristics, financiers, co-financiers, recipients, implementers, loan terms, ownership structures, and project descriptions.

Implications for Global Energy Security

China’s growing dominance in transition minerals raises concerns about supply chain resilience, national security, and global market stability. As countries seek to diversify supply sources and reduce dependency on Chinese-controlled minerals, new policies and strategic partnerships are emerging. Governments worldwide are exploring ways to strengthen domestic mineral supply chains, incentivize alternative processing facilities, and invest in new mining projects to counterbalance China's influence.