America must invest in mining now to match China's grip on critical minerals

China's three-decade dominance

China has spent the last three decades building a dominant share of global mineral production.

The West's temporary fix

Washington and European capitals are investing in refineries and recycling infrastructure to reduce reliance on China. But refining facilities are valuable only if they have a steady, long-term supply of raw materials.

Building a mine takes 20 years

Ensuring a long-term supply of minerals requires investing in new mines now. Because building a mine takes roughly 20 years, the West must start this process immediately to meet future demand.

Japan's slow progress

Japan has invested for 15 years since China blocked rare earth exports in 2010 over the Senkaku Islands dispute.

The valley of death

Junior mining companies explore deposits but cannot afford feasibility studies costing tens of millions of dollars. Commercial lenders avoid these projects because they have no revenue, no collateral, and no guarantees of viability.

China fills the gap

Chinese companies are willing to take on high-risk financing that Western lenders avoid. At a key financing stage, China is often the only viable option for junior mining companies seeking capital.

“China's dominance in global supply chains relies on Western companies' exploration. It endures not because China offers more competitive terms but because at a key financing stage, it is the only game in town.”

China's record spending in 2025

In 2025, China spent a record 32 billion dollars on metals and mining projects through its Belt and Road Initiative, breaking the previous year's record of 21 billion dollars.

China's portfolio approach

Chinese firms invest in equity stakes and resources-for-infrastructure deals. By investing in a broad portfolio of mineral projects across several countries, Chinese firms let profits from successes cover losses from failures.

China's geological expertise

Beijing relies on specialized state-owned enterprises, geological firms, private companies, and government officials to vet projects and secure permits. Only Japan among G-7 countries maintains comparable on-the-ground presence for mining projects.

Africa's investment gap

In 2023, the United States invested about 300 million dollars in critical mineral projects in Africa. China invested about 8 billion to 10 billion dollars on the same continent.

Congo's cobalt and copper

Chinese companies control about 70 percent of cobalt and copper mines in the Democratic Republic of the Congo. Between 2008 and 2020, Chinese banks extended over 9 billion dollars in credit for mine development.

Kamoa-Kakula: the missed opportunity

In 2015, Canadian mining company Ivanhoe Mines sought funding for its Kamoa-Kakula copper project in Congo.With no Western investors willing to take the risk, Chinese firm Zijin Mining acquired an ownership stake.

Ownership controls output

When Chinese firms own a mine, the output flows to their refineries or downstream manufacturers in China.

Western mining capacity exists

In 2024, two Toronto-based stock exchanges hosted nearly 1,100 publicly listed mining companies, 40 percent of the global total.

Private investors are wary

Chinese overproduction has depressed prices for key commodities. Lengthening permitting timelines lower private investors' appetite for risk because they must wait longer for returns. These factors discourage new players from entering mining.

US government spending falls short

Official announcements claim US investments total around 50 billion dollars, but the value of signed deals is closer to 9 billion dollars, and money actually moving is around 4 billion dollars.

Canada's tax credit model

The Canadian government offers tax credits to companies engaged in mineral exploration and a flow-through shares system that helps mining companies finance exploration by offering tax incentives to investors. The G-7 should adopt this approach.

A joint G-7 financing facility

G-7 countries should set up a joint facility to pool financing for feasibility studies, establishing a broad portfolio so losses from failures are covered by winners.

Future threats are at the mines

Today's chokepoints for critical minerals sit mostly at the processing or refining stage.But future threats to minerals needed for manufacturing, energy, artificial intelligence, and defence technology will be at the mines.