Why breaking China’s critical minerals monopoly costs more than money
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For the past 30 years, the West prioritized “cheap and fast,” effectively outsourcing the messy, toxic, and complex work of mineral refining to China.
Meanwhile, China played the long game. The result is a world where the transition to artificial intelligence, electric vehicles, and advanced defense systems currently requires permission from a single supplier.
But this is not just a trade dispute over rocks and soil.
As of February 2026, this event could be the most aggressive reorganization of the global industrial order since the Cold War.
Why the refinement game is rigged
Most people think the struggle for China’s critical minerals is about who has the biggest holes in the ground, although the reality is much more technical.
While copper and lithium are found in plenty of places, China controls about 87% of the global processing and refining capacity.
China essentially acts as the world’s chemist by taking raw rocks from places like the Democratic Republic of the Congo and turning them into the specialized powders needed for advanced manufacturing.
This dominance is the result of a 30-year head start, where the West was happy to let China handle the environmental and energy costs of heavy processing.
Because they also manufacture 93% of high-strength rare-earth permanent magnets, they hold a total monopoly on the parts that make wind turbines spin and precision missiles fly.
The dependency is now a major security headache because the US is 100% import-reliant for 15 specific minerals, and at least 70% of rare earth shipments come from China.
Beijing used this as leverage in 2025 by placing export controls on seven types of rare earths in response to American trade tariffs.
They even introduced plans for “long-arm” jurisdiction to regulate products traded worldwide that contain even minimal Chinese content.
By controlling 100% of the refined production for heavy rare earths like dysprosium, China can essentially decide which foreign industries get to finish their high-tech products and which ones are left waiting on a license.
This level of control allows them to strategically use niche materials like gallium and germanium to bring rivals back to the negotiating table.
Project Vault and the 12 billion dollar bet
In early February 2026, the US government decided to stop playing defense and launched a program called Project Vault.
This initiative is an attempt to build a massive safety net for the civilian economy using a $10 billion loan from the US Export-Import Bank and nearly $1.67 billion from private investors.
Unlike previous stockpiles that were only for the military, this reserve is designed to keep factories for companies like GM and Boeing running if supply lines get cut.
It represents a major change in American economic policy because it puts the government directly into the business of managing mineral markets.
The administration hopes that by holding a massive inventory of rare earths, it can prevent the kind of price spikes that happen when Beijing decides to limit exports.
The price floor standoff with allies
During the Critical Minerals Ministerial in Washington this week, over 50 countries gathered to discuss how to keep their own mining companies from going bankrupt.
Many nations, like Australia, are pushing for a global price floor because they are tired of seeing China flood the market with cheap materials whenever a Western competitor opens a new mine.
While a guaranteed minimum price would protect investors, the US has been hesitant to fully commit to the idea.
If the West cannot agree on a pricing mechanism, it will be very difficult to convince private banks to fund new mines that might take a decade to start turning a profit.
This creates a situation where the desire for security is hitting a wall of traditional market economics.
Geopolitical pivots to the North and South
The search for alternatives to Chinese routes is leading the Pentagon to some very unconventional partners.
There are reports that US officials are looking toward the Venezuelan Mining Corporation to secure minerals like tantalum, which is required for high-end electronics.
At the same time, the prospect of mining in Greenland remains a major topic of discussion despite the diplomatic friction it causes with Denmark.
Even if the US manages to find these minerals in the Western Hemisphere, they still face the problem of where to process them without sending them back to China.
Every new mining deal now requires a massive parallel investment in chemical plants that do not yet exist on American soil.
The hidden value in American scrap heaps
While everyone is looking for new places to dig, a company in Michigan called Cirba Solutions is proving that the next big mine might be in people’s junk drawers.
They use a chemical process to break down old lithium-ion batteries into a substance called black mass, which contains the cobalt and nickel needed for new tech.
This kind of recycling could eventually create a closed-loop system where we use the same minerals over and over again.
Although recycling cannot replace mining entirely, it is becoming a vital part of the plan to reduce the need for new imports from overseas.
The legislation known as the Unearth America’s Future Act is now trying to use tax breaks to make this kind of “urban mining” more profitable for US companies.
A high price for a new industrial map
The real insight for anyone watching these markets is that the era of “cheap tech” is likely coming to an end.
We are watching the global economy split into two separate systems, where the West is willing to pay a premium for minerals that are not sourced from China.
This security premium will eventually show up in the price of everything from a laptop to a home battery system.
China still holds the advantage of having thousands of patents and a workforce that has been refining these materials for three decades.
While the $12 billion dollar “Project Vault” is a massive step, it is only a fraction of what China spends annually to keep its lead.
The successful investors will be the ones who realize that the mineral war is now a permanent feature of the industrial landscape rather than a temporary trade spat.
The post Why breaking China's critical minerals monopoly costs more than money appeared first on Invezz
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Why breaking China’s critical minerals monopoly costs more than money
Share:
For the past 30 years, the West prioritized “cheap and fast,” effectively outsourcing the messy, toxic, and complex work of mineral refining to China.
Meanwhile, China played the long game. The result is a world where the transition to artificial intelligence, electric vehicles, and advanced defense systems currently requires permission from a single supplier.
But this is not just a trade dispute over rocks and soil.
As of February 2026, this event could be the most aggressive reorganization of the global industrial order since the Cold War.
Why the refinement game is rigged
Most people think the struggle for China’s critical minerals is about who has the biggest holes in the ground, although the reality is much more technical.
While copper and lithium are found in plenty of places, China controls about 87% of the global processing and refining capacity.
China essentially acts as the world’s chemist by taking raw rocks from places like the Democratic Republic of the Congo and turning them into the specialized powders needed for advanced manufacturing.
This dominance is the result of a 30-year head start, where the West was happy to let China handle the environmental and energy costs of heavy processing.
Because they also manufacture 93% of high-strength rare-earth permanent magnets, they hold a total monopoly on the parts that make wind turbines spin and precision missiles fly.
The dependency is now a major security headache because the US is 100% import-reliant for 15 specific minerals, and at least 70% of rare earth shipments come from China.
Beijing used this as leverage in 2025 by placing export controls on seven types of rare earths in response to American trade tariffs.
They even introduced plans for “long-arm” jurisdiction to regulate products traded worldwide that contain even minimal Chinese content.
By controlling 100% of the refined production for heavy rare earths like dysprosium, China can essentially decide which foreign industries get to finish their high-tech products and which ones are left waiting on a license.
This level of control allows them to strategically use niche materials like gallium and germanium to bring rivals back to the negotiating table.
Project Vault and the 12 billion dollar bet
In early February 2026, the US government decided to stop playing defense and launched a program called Project Vault.
This initiative is an attempt to build a massive safety net for the civilian economy using a $10 billion loan from the US Export-Import Bank and nearly $1.67 billion from private investors.
Unlike previous stockpiles that were only for the military, this reserve is designed to keep factories for companies like GM and Boeing running if supply lines get cut.
It represents a major change in American economic policy because it puts the government directly into the business of managing mineral markets.
The administration hopes that by holding a massive inventory of rare earths, it can prevent the kind of price spikes that happen when Beijing decides to limit exports.
The price floor standoff with allies
During the Critical Minerals Ministerial in Washington this week, over 50 countries gathered to discuss how to keep their own mining companies from going bankrupt.
Many nations, like Australia, are pushing for a global price floor because they are tired of seeing China flood the market with cheap materials whenever a Western competitor opens a new mine.
While a guaranteed minimum price would protect investors, the US has been hesitant to fully commit to the idea.
If the West cannot agree on a pricing mechanism, it will be very difficult to convince private banks to fund new mines that might take a decade to start turning a profit.
This creates a situation where the desire for security is hitting a wall of traditional market economics.
Geopolitical pivots to the North and South
The search for alternatives to Chinese routes is leading the Pentagon to some very unconventional partners.
There are reports that US officials are looking toward the Venezuelan Mining Corporation to secure minerals like tantalum, which is required for high-end electronics.
At the same time, the prospect of mining in Greenland remains a major topic of discussion despite the diplomatic friction it causes with Denmark.
Even if the US manages to find these minerals in the Western Hemisphere, they still face the problem of where to process them without sending them back to China.
Every new mining deal now requires a massive parallel investment in chemical plants that do not yet exist on American soil.
The hidden value in American scrap heaps
While everyone is looking for new places to dig, a company in Michigan called Cirba Solutions is proving that the next big mine might be in people’s junk drawers.
They use a chemical process to break down old lithium-ion batteries into a substance called black mass, which contains the cobalt and nickel needed for new tech.
This kind of recycling could eventually create a closed-loop system where we use the same minerals over and over again.
Although recycling cannot replace mining entirely, it is becoming a vital part of the plan to reduce the need for new imports from overseas.
The legislation known as the Unearth America’s Future Act is now trying to use tax breaks to make this kind of “urban mining” more profitable for US companies.
A high price for a new industrial map
The real insight for anyone watching these markets is that the era of “cheap tech” is likely coming to an end.
We are watching the global economy split into two separate systems, where the West is willing to pay a premium for minerals that are not sourced from China.
This security premium will eventually show up in the price of everything from a laptop to a home battery system.
China still holds the advantage of having thousands of patents and a workforce that has been refining these materials for three decades.
While the $12 billion dollar “Project Vault” is a massive step, it is only a fraction of what China spends annually to keep its lead.
The successful investors will be the ones who realize that the mineral war is now a permanent feature of the industrial landscape rather than a temporary trade spat.
The post Why breaking China's critical minerals monopoly costs more than money appeared first on Invezz
Read More
Silver tumbles 10%, gold below $5,000/oz as analysts see continued volatility