China expands overseas mining stakes to secure critical minerals

China’s $8.8 Billion Mining Spree Marks Highest Spending Since 2018

Chinese mineral acquisitions abroad reached $8.8 billion in the first three quarters of 2026, already the highest annual total since at least 2018, CNBC reported, citing a Rhodium Group analysis released Wednesday. The surge signals Beijing’s accelerating effort to lock down overseas supplies of metals essential for electric vehicles, semiconductors and jet engines.

The state-led push moves decision-making from individual companies to a unified national plan. In April, a dedicated overseas bureau was established to oversee investments by central state-owned enterprises, followed in July by the creation of a mining investment vehicle to coordinate deals and advise companies on compliance and risk management amid growing geopolitical tensions.

Beijing’s 70% Import Red Line

The centralization drive is rooted in a hard national security constraint: Beijing treats 70% import dependence as an implicit red line, according to Dan Wang, China director at Eurasia Group. That threshold places copper, lithium, cobalt, nickel, bauxite and iron ore under urgent pressure to secure foreign reserves. Even minerals within the 50% “safe” range, such as gold, face continued pursuit for high-grade resources. Wang noted that the quest for scale and “ultimately geopolitical strength” could override traditional calculations of investment risk and profitability.

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Outbound investment in upstream critical minerals will likely roughly double from the 2021-2025 period, Eurasia projects. Acquisitions have concentrated on minerals China lacks domestically, said Armand Meyer, senior research analyst at Rhodium Group, naming lithium, nickel and cobalt during the mid-2010s electric-vehicle boom and gold in recent years.

The 92% Processing Chokepoint

According to the International Energy Agency, Beijing now refines roughly 92% of the world’s rare earths, creating a supply-chain bottleneck that reaches past extraction into the processing stage. The U.S. possesses abundant rare earth supplies but relies on China to refine them. This dominance allows Beijing to withhold supply or flood markets to influence prices, said Brad Handler, director of the Energy Finance Lab at the Payne Institute.

“If a rival builds a new refinery, China can produce more, oversupply the market and push prices below economic levels,” Handler said. Brad Handler

Export restrictions show how this strategy is already affecting trade. China has curbed exports of seven medium and heavy rare earths since last year, requiring licenses. Japan has been among the hardest hit, reportedly coming within months of exhausting yttrium supplies. According to Chinese customs data, shipments of yttrium oxide to Japan plunged to 4,000 kilograms in September, down from 51,000 kilograms a year earlier. The price outside China surged to roughly $1,150 a kilogram—about 179 times its level two years earlier—compared with approximately $9 a kilogram domestically.

Host Countries Push Back on Raw Exports

The strategy faces growing resistance from resource-rich nations demanding local processing. Indonesia’s ban on nickel ore exports forced Chinese firms to build smelting and refining capacity within the Southeast Asian country rather than shipping raw materials home. More countries are restricting unprocessed mineral exports and requiring foreign partners to refine locally, challenging China’s traditional model of importing raw ore for domestic processing.

Despite these hurdles, Chinese companies have adapted by ramping up greenfield investment and establishing processing capacity near mines. Japan spent 16 years building stockpiles after China’s 2010 restrictions, yet there remains virtually no yttrium or lutetium separation capacity outside China, leaving Tokyo vulnerable to supply disruptions despite its preparation.