China’s growing use of export controls on critical minerals has transformed a long-running supply chain issue into a strategic contest involving governments, manufacturers and defence industries, according to a Financial Times report that traces how Beijing’s dominance over niche metals is reshaping global trade and industrial policy.
The Financial Times reported that minerals such as yttrium, gallium, germanium, tungsten and rare earth elements have become central to geopolitical competition because they are essential for semiconductors, artificial intelligence, defence systems, electric vehicles and advanced manufacturing. While demand for these materials has surged, China’s overwhelming control of mining, processing and refining has given Beijing considerable influence over global supply chains.
Yttrium, first identified in the late eighteenth century after Finnish chemist Johan Gadolin examined an unusual mineral discovered near Stockholm, has become one of the metals attracting the greatest strategic attention. According to the Financial Times, the element is now indispensable in semiconductor manufacturing and has emerged as one of the most sensitive supply chain bottlenecks confronting Western technology industries.
The report said China has steadily expanded export restrictions on several critical minerals during its escalating trade dispute with the United States. Those measures include controls on gallium, widely used in radar systems, germanium, which is essential for thermal imaging technologies, and other specialised metals used in electronics and defence manufacturing.
Industry executives told the Financial Times that the tightening restrictions have created significant uncertainty across supply chains. One semiconductor industry supplier described yttrium as “the killer chokepoint,” warning that no fully diversified supply chain currently exists outside China. Nick Myers, chief executive of rare earth startup Phoenix Tailings, told the publication that defence contractors, semiconductor manufacturers and automotive companies have been urgently seeking alternative supplies, with some warning they could face production disruptions if shortages continue.
According to the Financial Times, concerns over supply security had already been growing because of ageing mines and rapidly increasing demand driven by electrification and artificial intelligence. China’s export controls have intensified those concerns, exposing the consequences of decades during which many Western countries shifted mineral processing capacity overseas.
Experts interviewed by the Financial Times said China’s current position reflects more than thirty years of sustained investment in mining, refining and processing industries. The country has supported production across a wide range of strategic minerals while simultaneously becoming the world’s largest consumer of many of them. Tim Biggs, professor at the Camborne School of Mines, told the newspaper that Western countries had deliberately allowed mineral processing to move to China because of environmental concerns and lower production costs.
The report noted that Beijing had already demonstrated its willingness to use mineral exports as a geopolitical tool in 2010, when it restricted rare earth exports to Japan during a diplomatic dispute. Despite that episode, much of the world’s manufacturing sector continued relying heavily on Chinese supply chains.
According to the Financial Times, China’s export restrictions have not halted international trade in critical minerals but have instead introduced a licensing system under which authorities determine which overseas buyers receive access. Companies seeking export licences must provide detailed information regarding the intended civilian use of materials, while approval times have become increasingly unpredictable.
Kyle Sullivan of the U.S.-China Business Council told the Financial Times that the system has evolved into a managed export regime, although companies continue to face commercial uncertainty and regulatory complexity. Industry participants said the unpredictability has encouraged many businesses to build stockpiles while others increasingly consider shifting procurement toward Chinese suppliers that remain outside export licensing scrutiny.
The Financial Times reported that shortages have become particularly acute for industries with limited flexibility. Defence manufacturers have struggled to secure tungsten supplies, while semiconductor companies have focused more on material availability than rising costs. Executives told the publication that reserve inventories of gallium have declined significantly, forcing companies to prioritise securing supplies regardless of price.
The growing dependence on a single supplier has triggered a major policy response across Europe, North America and allied countries. According to the Financial Times, the United States has announced approximately $40 billion in support for critical minerals projects since 2022, including investments and equity stakes in domestic mining companies. The European Union has also accelerated permitting procedures for strategic mining projects while committing billions of euros toward expanding domestic production.
Governments are also exploring strategic stockpiles to reduce vulnerability during future disruptions. Former Rio Tinto chief executive Jakob Stausholm told the Financial Times that coordinated stockpiling could strengthen supply resilience if managed cooperatively, drawing comparisons with coordinated oil reserves established after the energy crises of the 1970s.
At the same time, several resource-rich countries are seeking greater control over their mineral industries. According to the Financial Times, nations including Guinea and the Democratic Republic of Congo are increasingly requiring more mineral processing to occur domestically rather than exporting raw materials. The report also noted that the United States has actively encouraged American companies to acquire overseas mining assets as part of efforts to secure future supplies.
The rapid expansion of competing investment plans has also created concerns about market distortions. The Financial Times reported that six non-Chinese companies have announced gallium production projects capable of collectively supplying nearly half of current global annual demand. Industry executives cautioned that simultaneous production increases could eventually create oversupply, placing pressure on prices and challenging the commercial viability of new entrants without long-term government support.
Mining companies told the Financial Times that sustained public funding and guaranteed purchasing agreements would be necessary to ensure that alternative supply chains remain economically viable, particularly if China later increases exports and drives prices lower. William Oplinger, chief executive of Alcoa, said government-backed diversification would help establish multiple reliable suppliers after the vulnerabilities exposed during the COVID-19 pandemic.
The Financial Times also reported that building resilient supply chains extends beyond opening new mines. Industry leaders said affordable energy, consistent industrial policy and long-term government commitment are essential because critical mineral projects often require decades to become operational. Former Rio Tinto chief executive Stausholm told the newspaper that China had successfully implemented the long-term strategy many Western countries failed to pursue.
Meanwhile, Chinese companies continue expanding their international presence through investments in mining projects across Africa and South America. George Bennett, chief executive of Rainbow Rare Earths, told the Financial Times that his company had rejected a takeover proposal from one of China’s largest rare earth producers because of its commitment to supporting Western supply chains.
The Financial Times concluded that governments and industry now face the challenge of creating diversified mineral supply networks without further fragmenting global markets. As strategic competition increasingly shapes access to critical resources, companies, policymakers and miners are adjusting to a global trading environment in which access to niche metals has become inseparable from national security, industrial strategy and international diplomacy.
