The Case:
In 2025, China’s role in critical minerals had moved decisively beyond market participation toward structural leverage. Over the past two decades, China had positioned itself across extraction, processing, refining, and manufacturing stages of multiple critical minerals supply chains. By 2025, this positioning allowed China not only to compete within global markets, but to shape how those markets function.
China’s influence derived less from ownership of resources and more from control over the chokepoints that transform raw materials into strategic industrial inputs—where pricing power, supply reliability, and technological standards are determined.
The Facts:
At the beginning of 2025, China already dominated global processing and refining capacity for several critical minerals, including lithium, cobalt, rare earths, graphite, and battery-related components. While upstream extraction remained geographically dispersed, downstream stages were highly concentrated within Chinese-controlled systems.
Throughout the year, authorities reinforced this position through export controls, licensing regimes, and industrial coordination measures affecting selected mineral products. These actions were not designed to disrupt supply, but to regulate access, timing, and availability—underscoring China’s capacity to influence markets without halting them.
By mid-year, international responses intensified. Governments and firms in the United States and Europe reassessed exposure to Chinese-controlled processing and refining, increasingly framing dependence as a strategic vulnerability. By December, production volumes had not shifted dramatically, but expectations had global actors adjusted to the reality that China’s leverage was embedded structurally, not episodic.
Why This Case Was Important in 2025
China’s expansion mattered in 2025 because it revealed how power in critical minerals had become structural rather than transactional. Market participation had evolved into systemic influence, allowing China to shape outcomes without overt confrontation. For the U.S. and EU, this concentration represented a strategic exposure rather than a conventional trade imbalance. Dependency was not limited to supply volume, but extended to processing capacity, technological standards, and industrial coordination.
The case clarified why diversification efforts accelerated: not in response to a single disruption, but to accumulated leverage that constrained strategic autonomy.