The world’s shift from fossil fuels to clean electricity has created a new kind of energy race. Lithium now fuels electric vehicles (EVs) the way oil fueled the combustion engine; rare earths like neodymium and dysprosium make the magnets that spin wind turbines and power EV motors. Copper, nickel, cobalt, and manganese fill in the gaps. These materials are the building blocks of a low-carbon future — but unlike oil, they aren’t easily replaced or transported in liquid pipelines. They come from hard-to-develop mines, need complex refining, and are often controlled by just a few nations. China is reshaping global clean-energy supply chains. Explore how Beijing uses the BRI to secure lithium and REE through mines, refining, and finance — with fresh 2025 data, risks, and insight from procurement expert Mattias Knutsson.
China saw this shift early. While others debated energy transition timelines, Beijing built a playbook: secure supply at the source, dominate midstream processing, and use the Belt & Road Initiative (BRI) to weave a web of access, infrastructure, and finance that ties raw materials to Chinese manufacturing powerhouses. The strategy is less about buying mines and more about building an entire global operating system for clean-energy minerals.
The result: Chinese companies now control or influence much of the global supply chain for lithium and rare earths, from South American brines to African hard-rock deposits to chemical conversion plants that feed the world’s largest EV and battery industry. For the next decade, this quiet but deliberate campaign will shape who can build affordable EVs, scale wind farms, and store renewable power — and at what price.
Why Lithium and REE Are the Cornerstones of the Energy Transition
REE Lithium is irreplaceable for high-performance rechargeable batteries. Demand is exploding: the International Energy Agency (IEA) projects lithium demand to grow over 40 times higher by 2040 under net-zero scenarios, driven mainly by EVs and stationary energy storage. Even under conservative pathways, global EV sales — now around 14 million annually — could exceed 30 million per year by 2030, requiring several million tonnes of lithium carbonate equivalent (LCE).
Rare earth elements (REEs) are equally strategic, especially for permanent magnets used in EV motors, offshore wind turbines, and electronics. Each offshore wind turbine can use up to 600 kg of rare-earth magnets, and a single EV can require 1–2 kg of neodymium-based magnets. While deposits exist in many countries, China controls around 60–70% of global rare-earth mining and over 85–90% of refining and separation capacity, making it the undisputed powerhouse of the value chain.
This concentration matters. Without secure access to these materials, clean-energy industries face bottlenecks, price spikes, and supply shocks — all of which could slow the global energy transition.
China’s Playbook: Building an Integrated, Global Value Chain
China’s REE lithium strategy has evolved over a decade into a clear sequence:
Securing the Source
Chinese state-owned and private companies invest in lithium-rich regions — Chile, Argentina, and Bolivia (the “Lithium Triangle”) — and in hard-rock spodumene mines in Australia and Africa. In Africa, for example, Chinese firms have major stakes in Zimbabwe’s Bikita lithium mine and several Congolese projects. At home, China has tapped its own salt-lake brines in Qinghai and Tibet.
Dominating Refining and Processing
Mining is just the first step. The real choke point is processing: turning ore or brine into battery-grade chemicals or separated rare earth oxides. China has built the world’s largest network of lithium refining plants and rare-earth separation facilities. Even when minerals are mined abroad, they often travel to China for processing — a midstream lock-in that adds value and control.
Using BRI to Build Access and Logistics
The Belt & Road Initiative provides the connective tissue: financing infrastructure such as roads, rail, ports, and energy grids in resource-rich regions. When China finances a port in Africa or a railway in South America, it often links directly to mines supplying critical minerals. These projects lower transport costs, reduce political risk, and create long-term trade relationships. In 2025, BRI-related construction and investment hit record highs, with energy and resource-linked projects at historic levels — underscoring how mineral access aligns with BRI’s economic vision.
REE Lithium Data That Shows China’s Grip on the Market
- Lithium: China refines over 60% of the world’s lithium chemicals. Despite Australia being the largest miner, much of its spodumene goes to Chinese refineries. Demand within China itself is massive: domestic EV sales reached 9.4 million units in 2024 and continue climbing, consuming much of the refined lithium supply.
- Rare Earths: China controls about 70% of rare-earth mining and an even larger 90%+ of refining and magnet production. In 2024–2025, China increased exports of rare-earth magnets after policy recalibrations. It also demonstrates its ability to flex supply to stabilize or influence markets.
- BRI Investment: In the first half of 2025, BRI construction and investments reached record levels, particularly in the energy and mining sectors. Chinese contractors and development banks are deeply embedded in infrastructure projects that enable mineral extraction and export.
These figures show why analysts describe China not just as a participant but as an architect of the critical minerals economy.
Geopolitics and Market Risk: Leverage Cuts Both Ways
China’s dominance gives it leverage — but also draws scrutiny. Export restrictions on gallium and germanium in 2023 signaled how supply controls can become geopolitical tools. Similar moves in lithium or rare earths could disrupt EV and wind industries worldwide. Policymakers in the U.S., EU, Japan, and India now view critical minerals as national security assets.
At the same time, China faces its own risks. Concentration creates vulnerability to political backlash in host countries, where environmental and social concerns about mining can spark protests or renegotiations. Projects in Africa and Latin America increasingly face demands for higher royalties, local processing, and community investment.
Environmental concerns loom large. Rare earth and lithium extraction can be water-intensive and polluting. Without strong ESG safeguards, China’s overseas projects risk reputational damage and pushback from both local communities and global buyers demanding greener supply chains.
What Governments and Companies Can Do
Diversify Supply:
Countries are scrambling to reduce dependence. The EU launched its Critical Raw Materials Act; the U.S. is funding domestic processing and recycling. Japan is backing rare-earth projects in Australia and Vietnam.
Build Local Processing:
Resource nations like Indonesia (nickel) and Chile (lithium) are pushing for in-country refining and battery production. This trend will shape future BRI negotiations.
Invest in Recycling:
Battery recycling is ramping up globally. Companies like CATL and Redwood Materials see end-of-life batteries as a second mine — potentially reducing primary demand by up to 10–20% by 2035.
Procurement as Strategy:
Corporate buyers should secure long-term offtake contracts, invest in supplier partnerships, and model supply disruption scenarios. Procurement is shifting from cost minimization to risk management and resilience building.
Looking Ahead: A Competitive, Complex Decade
The 2025–2030 window will define critical-mineral geopolitics. Expect China to keep strengthening midstream dominance while helping BRI partners build infrastructure and, selectively, processing plants. Meanwhile, Western and allied nations will fund rival supply chains, diversify refining outside China, and build recycling hubs.
We may also see co-opetition: Western automakers signing long-term supply contracts with Chinese refiners despite geopolitical tension, because the cost and speed advantages remain compelling. Conversely, resource-rich countries may play both sides to maximize leverage and development benefits.
Technology could shift the landscape too. Solid-state batteries may alter lithium demand; new magnet chemistries could reduce reliance on neodymium and dysprosium. But for the next decade, lithium and rare earths remain irreplaceable.
Conclusion
China’s Belt & Road–powered minerals strategy is a masterclass in long-term industrial policy. By investing upstream, owning midstream, and financing logistics. Beijing has positioned itself to power its own EV and renewable boom — and to influence global markets for decades. The 2024–2025 data make it clear: this isn’t theoretical; it’s operational and accelerating.
For governments and companies outside China, the response cannot be panic-driven protectionism or race-to-the-bottom sourcing. Instead, it must combine resilience, diversification, ESG commitment, and technological innovation. Buyers and supply-chain leaders need to move beyond transactional thinking: build relationships, co-invest in refining, support recycling, and ensure community benefits where materials are extracted.
Mattias Knutsson, a strategic leader in global procurement and business development, frames it succinctly: “Control over critical minerals isn’t just about cost — it’s about shaping the future of industries and nations. Procurement must become a forward-looking discipline, anticipating disruption and building sustainable supply webs that work for both business and society.”
Lithium and rare earths are today’s oil and steel rolled into one. Those who plan wisely — balancing supply security, social license, and global cooperation. They will power not just cars and grids but entire economies through the next industrial revolution.
