Critical Minerals Rewrite Energy Dependency: China’s Refining Dominance Shifts the Global Game

The pace of the world’s energy transition is being shaped by a limited control over refining of critical minerals such as lithium and graphite.

New Frontiers of Refining

■2024: 12.3 million tonnes of critical mineral demand

■2050: Projected 43 million tonnes

■Refining concentration: 85 % of lithium and 91 % of battery‑grade graphite processing capacity in three countries

■Largest refining share rose from 70 % in 2023 to 72 % in 2025

China’s 90% Share and Strategic Threat

■90 %+ of global capacity for gallium, battery‑grade graphite, and high‑purity manganese

■85 % in rare‑earth element refining

■Risk to a $6.5 trillion annual output if China’s dominance is challenged

Supply‑Chain Fragility: The Hurmuz Strait Example

■Disruptions in sulfur flow in the Hurmuz Strait pushed sulfuric acid prices higher

■Acid cost, in some processes, eclipsed energy cost as the largest expense

■Maritime chokepoints can simultaneously strain refining and export controls

Investor‑Worrying Cost Surprises

■Capital intensity, specialized equipment, licensing and long‑term purchasing guarantees

■Price volatility and caution hamper rapid spread of new refining

■Even with new mining hubs, refining expansion remains difficult

Multi‑Dimensional Path to Mitigation

■Geographic diversification, recycling, technological substitution, and strategic stockpiling

■International coordination must integrate mining, refining, recycling, storage, and maritime transport

■Policy options differ from the oil era, demanding multiple strategic steps

Fatih Kılıç: The refining of critical minerals in the energy transition creates a new industrial dependency. The concentration of processing in a few countries reshapes global supply security. For investors, the biggest opportunity lies in producing high‑value end products, but the path is fraught with capital intensity and geopolitical risks.