Key Takeaways:
- The author says the West’s problem is not mines but midstream: Western firms control ~71–81% of critical-mineral extraction (much DRC ore still in the ground) while China processes 19 of 20 minerals used in EVs, AI chips, and defense. Zinc is the exhibit: mine output down 2.6% this year, Chinese-led refining up ~6%.
- Cases: Korea Zinc’s Onsan smelter and U.S.-backed Project Crucible (Tennessee, 11 minerals) sit beside a 2024 Young Poong–MBK fight; MBK’s China-linked funds raise governance and know-how worries. Anglo American’s Brazil nickel sale to MMG (China Minmetals-controlled) drew a 16 Sept. 2026 EU statement of objections over low-carbon ferronickel. Indonesia: ~66% of nickel mine and ~40% of processing, three-quarters under Chinese control.
- REEs: Mountain Pass plus July 2025 DoD money into MP Materials still faces China’s ~70% mine / ~90% process share. Security is competitive mid- and downstream capacity—and who owns it—not ore in the ground
The imbalance that exists between large-scale Western ownership and control of mines alongside the lack of adequate access to processing and refining capabilities, is likely the most significant challenge which policymakers will have to overcome in order to build truly independent supply chains.
Western-based companies control between 71%-81% of critical minerals extraction globally, although countries like the DRC host significant physical reserves, as much as 90% of which remain untapped. Beijing on the other hand, maintains a near-monopoly over global refining, dominating the processing of 19 out of 20 critical minerals essential for electric vehicles, AI chips, and defense systems. Western stakes in global critical mineral processing pales in comparison.
Building the missing infrastructure between the mine and the factory, is proving to be an arduous undertaking. The immense capital required, created a role for public-private partnerships, especially as Western governments are looking to replicate certain parts of China’s state-backed investment model.
South Korea is an example of both the opportunities and risks involved. Seoul is actively seeking to diversify its critical minerals and high-tech supply chains. One of its largest companies, Korea Zinc, is not only a leading supplier to South Korea’s domestic zinc market, but is also consequential globally. Its non-ferrous smelter in the city of Onsan is the largest in the world. The company is also active in the production of zinc, lead, silver and indium as well as sulfuric acid necessary in the semiconductor industry.
This business portfolio has made Korea Zinc an attractive partner for public-private collaboration. South Korea’s government has backed the firm’s construction of a new smelting and refining hub, Project Crucible, in Tennessee, for 11 critical minerals. The U.S. government has supported the joint venture with equity, federal loans and subsidies. Nevertheless, challenges in insulating the project from competing foreign influence emerged early on.
The high-profile corporate battle that Korea Zinc’s largest shareholder, the Young Poong Group, launched in 2024 has raised concerns about whether Beijing can penetrate an emerging Western-allied supply chain through third-party corporate arrangements. Young Poong joined efforts with MBK Partners, a private equity firm with notable business ties to China, to increase its control over Korea Zinc.
With China’s sovereign wealth fund among the investors in one of MBK’s latest buyout funds, and having entered into joint collaborations with Chinese state-owned entities on past projects, MBK’s newly acquired influence over Korea Zinc should be closely examined. MBK can jointly exercise the rights that come with Young Poong’s shares, securing a call option on some 12% of Korea Zinc shares, alongside other governance controls. For Korea Zinc, this could, in practice, translate into greater influence over corporate decision-making alongside insight into sensitive processes and proprietary corporate know-how by investors with links to Chinese state-owned entities. Beijing may thus see this corporate battle as a strategic means of infiltrating Western critical mineral supply chains. However, should Beijing secure further influence in Korea Zinc through private sector proxies, the specialized knowledge required to successfully operate the project would be sorely missing.
Recent reports from the global zinc industry highlight why the creation of independent supply chains is a Western priority. While global mining of zinc fell 2.6% this year, Chinese-led zinc refining increased nearly 6%, showing access to the ore does not translate into independence from foreign processing.
The recent sale of Anglo American’s Brazilian nickel businesses introduces a different problem: a mismatch between corporate and government priorities. The proposed sale of projects in Brazil which produced approximately 40 thousand tons of nickel to MMG Singapore Resources, has attracted significant government scrutiny, especially in Europe. From Anglo American’s perspective, the transaction represents the simplification of its portfolio. From the perspective of Western governments, however, when strategic mineral assets change hands, especially processing and refining, the deal becomes geopolitically sensitive. The concern stems from the fact that MMG is majority-owned and controlled by the state-owned China Minmetals Corporation.
On September 16, 2026, the European Commission issued a formal statement of objection against MMG’s acquisition, warning that the transaction could leave European stainless-steel manufactures with lower access to low-carbon ferronickel. Europe’s stainless-steel industry might, therefore, be exposed to a supply chain in which Chinese companies maintain substantial control. The global nickel industry is heavily concentrated in Indonesia, accounting for 66% of mining and 40% of processing, three quarters of which operate under Chinese control.
The rare earth elements (REE) industry presents an extreme case of the same problem of incomplete supply chains. Despite the U.S.’s access to ample REEs at Mountain Pass, a rare-earth mine in California, the question remains if Washington can separate these into materials, metals and magnets.
In July 2025, the U.S. Department of Defense made a large investment in MP Materials with the goal of rebuilding the REE supply chain. The deal targeted separation capacity, refining and the production of permanent magnets. Value is further increased by China’s extraordinarily integrated REE supply chain, concentrating 70% of mining and a staggering 90% of processing worldwide. Even with substantial government backing over ten years, rebuilding these links requires commercially viable downstream markets.
The lesson from zinc, nickel and REEs is that mineral security cannot be measured by supply or extraction. It depends on whether countries can process those materials at a competitive scale. Western policymakers need to focus more on developing mid- and downstream capacity. Alongside capital and policy support, new facilities need to operate at a competitive scale. Importantly, even if processing capabilities are physically located in Western-aligned countries, strategic objectives can suffer if Chinese-controlled shareholders gain access to this new network.
The alternative carries significant national security risks: China spent decades building its advantage across the middle and downstream stages of the critical minerals supply chain. The Korea Zinc battle, the Anglo-MMG deal and the U.S. investment in MP Materials all point to the same conclusion: the critical-minerals race will not be determined by access to upstream resources, but by the ability to develop competitive midstream and downstream capacity.
