China's $8.8B overseas mining blitz tightens grip on critical minerals

The money came first. Chinese firms spent $8.8 billion buying up mineral assets overseas in the first three quarters of this year, according to a Rhodium Group report released Wednesday — already the largest annual total since at least 2018. But Beijing isn't leaving the hunt to individual companies anymore.

Two new pieces of state machinery tell the story. In April, a dedicated overseas bureau was created to oversee foreign investments by central state-owned enterprises, with government agencies, ministries and policy banks mobilized to steer mining deals. By July, a mining investment vehicle followed, set up to coordinate those deals and advise Chinese companies on compliance, risk management and market conditions as geopolitical friction and regulatory hurdles stack up.

The driver is import dependence. Beijing treats 70% reliance on foreign supply as an implicit red line, said Dan Wang, China director at Eurasia — a constraint that puts copper, lithium, cobalt, nickel, bauxite and iron ore under hard national security pressure to expand abroad. Gold sits inside the 50% "safe" range, yet the government still wants more high-grade resources. Rhodium senior analyst Armand Meyer said the buying has mostly targeted minerals China lacks at home: lithium, nickel and cobalt during the mid-2010s EV boom, then gold in recent years. Eurasia expects outbound upstream critical mineral investment to roughly double from the 2021-2025 stretch.

Then there's the chokepoint China already owns. It refines about 92% of the world's rare earths, according to the International Energy Agency, handing Beijing the ability to withhold supply or flood the market. "If a rival builds a new refinery, China can produce more, oversupply the market and push prices below economic levels," said Brad Handler, director of the Energy Finance Lab at the Payne Institute.

Japan is the live example. China has required licenses for exports of seven medium and heavy rare earths since last year, and yttrium has become a pressure point for screen displays and semiconductors. Chinese customs data shows yttrium oxide shipments to Japan dropped to 4,000 kilograms in September, down from 51,000 kilograms a year earlier. The oxide's price outside China reportedly climbed to about $1,150 a kilogram — roughly 179 times its level two years prior — against about $9 a kilogram inside the country. Japan spent 16 years stockpiling after China's 2010 restrictions, yet "there is virtually no yttrium or lutetium separation capacity outside of China," Bedford said.

The push is running into resistance. Resource-rich governments are restricting exports of unprocessed minerals and demanding foreign partners refine on home soil, and Chinese firms have adapted by building processing capacity near the mines instead of simply buying them — most visibly in Indonesia, where a nickel ore export ban pushed Chinese companies to construct smelting and refining there. At home, Wang said greater centralization could curb disorderly competition among Chinese firms and sharpen their hand against Western rivals and newer entrants like Saudi Arabia and India, though longer reviews could invite corruption and drag on investment returns. Even so, the pursuit of scale and geopolitical strength may override the math on risk and profit.