Which Country Controls 90% of Critical Minerals for EVs?

The global race for electric vehicles, renewable energy infrastructure, and advanced electronics is undeniably dependent on a critical bottleneck that, in my experience, most people rarely consider: Silicon Carbide (SiC) and other critical minerals. I’ve found that China currently controls approximately 90% of the global processing capacity for rare earth elements, which are the essential materials powering everything from EV motors to wind turbines to military systems. In fact, based on data from 2024, China is the leading producer or processor for roughly 99% of gallium, 95% of magnesium, 83% of tungsten, 79% of graphite, and over 69% of all rare earths.

Why This Matters Right Now: A Deeper Dive into 2026

As I look at the landscape in 2026, I see that global EV sales are projected to exceed 20 million units. Specifically, one forecast anticipates 22.7 million EV sales in 2026, with their share rising to 24.7% of the total light vehicle market. Every single one of these vehicles requires rare earth magnets, lithium, cobalt, and increasingly, Silicon Carbide chips for power electronics. The core problem, as I see it, isn't that these minerals are inherently rare in the ground; rather, it’s that one nation, China, dominates the entire processing chain.

My research shows that China processes 90% of rare earths, 75% of lithium, and 65% of cobalt globally. This isn't merely about mining; it encompasses refining, processing, and manufacturing at an industrial scale. While Western nations might mine some of these minerals, they often ship them to China for processing. This creates a dependency that, in my opinion, makes the oil dependency of the 1970s appear almost manageable by comparison. For instance, in the SiC supply chain, while major industry players are distributed globally, China has aggressively expanded its presence, particularly in epitaxial growth and device fabrication. However, Western companies like STMicroelectronics and onsemi are working to establish full supply chain control for SiC, from wafer to final device, to ensure reliability and meet demand.

The Strategic Implications and Geopolitical Chessboard

The United States and European Union have clearly recognized this risk. The US Inflation Reduction Act, for example, allocated $7 billion for critical mineral processing. I’ve found that the US Department of Energy (DOE) has announced initiatives including a $1 billion program to advance mining, processing, and recycling technologies, a $500 million grant for commercial-scale battery mineral processing, and $275 million for resource extraction from waste tailings. The EU Critical Raw Materials Act, for its part, sets ambitious targets for domestic production, aiming for 10% of annual needs for extraction, 40% for processing, and 25% for recycling by 2030. In March 2025, the European Commission adopted a list of 47 Strategic Projects to boost domestic strategic raw material capacities, with an additional 13 non-EU Strategic Projects announced in June 2025, mobilizing approximately €5.5 billion in private and public investment. These projects cover essential materials like lithium, cobalt, manganese, graphite, and rare earth elements.

However, the gap between ambition and reality is still enormous. Building processing facilities takes 5-10 years, and a February 2026 report from the European Court of Auditors indicated that the EU risks falling short of its CRMA targets due to heavy reliance on imports and limited progress in scaling domestic production, refining, and recycling. Four strategic raw materials—lithium, magnesium, gallium, and rare earth elements—already exceed the 65% import threshold from a single non-EU country at the processing stage.

This issue extends beyond just economic competition; it’s a geopolitical chessboard. China's dominance allows it to influence global manufacturing, trade negotiations, and tariffs. I noted that in 2022, Beijing increased rare earth processing by 25% to lower global market prices, which caused foreign producers to limit or halt production, effectively controlling entry into the rare-earth market.

China's Export Controls: A Clear Warning

If China decided to restrict exports of processed rare earths, the global EV industry would face immediate production cuts. Wind turbine manufacturing would slow, and defense systems would be compromised. This isn't hypothetical; I observed China's implementation of export controls on gallium and germanium in 2023, which were expanded in 2024.

Specifically, licensing requirements for gallium and germanium were introduced on July 3, 2023, with rules taking effect on August 1, 2023. China, which produces approximately 98% of the world's refined supply of these materials, used these controls to map sensitive technology flows. In October 2023, these controls were extended to high-purity graphite, a key material for EV battery anodes. By December 3, 2024, China issued a directive prohibiting, in principle, exports of gallium, germanium, antimony, and superhard materials to the United States. This escalation led to Chinese antimony exports falling by approximately 97% after August 2024 restrictions, and global prices surged by roughly 200%. Prices for gallium-containing parts jumped 6% within three months of the bans, and antimony parts rose 4.5%.

Then, on April 4, 2025, seven medium and heavy rare earths—including terbium, dysprosium, samarium, gadolinium, lutetium, scandium, and yttrium—were added to China's export control list. These elements are critical for high-temperature permanent magnets used in wind turbines, advanced motors, and defense systems. In October 2025, China unveiled a legal framework that would allow it to deny rare earth minerals and other dual-use components to any country. The International Energy Agency (IEA) stated in April 2026 that if these rare earth export controls were fully implemented, the economic value of downstream production at risk could reach US$6.5 trillion per year for countries outside China, with the US and Europe facing potential direct economic losses of over US$1.5 trillion each.

Diversification and the Rise of Urban Mining

The solution, as I perceive it, is diversification, but it is both expensive and slow. Recycling is emerging as a partial answer. Urban mining of old electronics, I believe, could supply 20-30% of rare earth demand by 2030. While less than 1% of global rare earth demand is currently met from recycled sources, the rare earth recycling market is projected to grow at a 12.4% CAGR, potentially reaching $18 billion by 2030. Japan, for example, is taking urban mining seriously, with studies estimating that used electronics in the country contain an estimated 300,000 tons of rare earths. However, the IEA concedes that recycling alone will not eliminate the need for mining investment.

Beyond recycling, I've observed a global effort to establish new mining and processing capabilities. Australia, a major rare earths producer with significant operations at the Mount Weld mine, is expanding its domestic processing capacity and has partnered with the United States, Japan, and the European Union to reduce reliance on China. Brazil, with the world's second-largest rare earth reserves (21 million metric tons), has recently begun commercial production at the Pela Ema deposit and is expected to become a more significant producer. The US-Australia Critical Minerals Framework committed $1 billion to joint minerals production projects in 2025. The U.S. has also partnered with Saudi Arabia on a rare earths refinery and entered agreements with Cambodia, Malaysia, and Thailand. Domestically, companies like US Critical Materials Corp. are advancing high-grade, domestically sourced rare earth elements from deposits in Montana and Idaho, partnering with Idaho National Laboratory to develop pilot-scale processing facilities.

What This Means For Investors, Entrepreneurs, and Professionals

For investors, this creates both significant risk and compelling opportunity. Companies building alternative supply chains—in Australia, Canada, Brazil, and parts of Africa—are attracting record venture capital. I've seen that the critical minerals investment market grew 35% in 2025 alone. The global EV market, currently valued at around $776 billion in 2026, is projected to hit $4.089 trillion by 2035, representing a CAGR of approximately 20.27% over the next decade. This massive growth underscores the urgent need for diversified critical mineral sources.

Entrepreneurs are finding fertile ground in developing innovative processing technologies, such as hydrogen-based extraction for magnet materials from e-waste, and advanced separation science. The shift towards 200mm SiC wafer production, for example, presents opportunities for companies that can overcome technical hurdles in yield and equipment compatibility.

Professionals across engineering, metallurgy, environmental science, and policy development are in high demand. Expertise in areas like sustainable mining practices, advanced recycling techniques, and navigating complex international trade regulations is becoming invaluable. I believe that companies that can solve the scalability and purity challenges in e-waste recycling stand to dominate a market that could exceed $100 billion in the coming decades. Furthermore, the increasing focus on Environmental, Social, and Governance (ESG) factors in critical mineral supply chains is creating new roles and demands for responsible production and traceability.

Bottom Line

The green energy revolution, as I’ve clearly outlined, depends on minerals that one country overwhelmingly controls. Every EV buyer, every solar installer, and every wind farm developer is, in essence, indirectly dependent on Chinese mineral processing. Until the West builds its own robust and diversified processing capacity—a multi-decade project, by my estimates—this remains the most profound and underappreciated geopolitical risk in clean energy.