Technology thesis · Critical Materials
high conviction established matureCritical minerals supply chains
China has turned its ~90% grip on mineral processing into an active weapon — April 2025 rare-earth licensing and military-buyer bans — and Western reshoring is a decade from blunting it.
Position maintained continuously · last reviewed Jun 24, 2026
The thesis
Core thesis
China controls 90% of rare earth refining, 80%+ of gallium/germanium, 60%+ of lithium refining, 70% of cobalt processing, and 95%+ of LFP cathode materials. This is not just a mining problem — it's a chemical processing problem. 'Those who say they'll produce heavy rare earths had better say where they'll get ammonium or magnesium sulfate' — both overwhelmingly manufactured in China. The top-3 supplier concentration is projected to decline only marginally to 82% by 2035. Western diversification is a decade-long project that has barely begun.
State of the art (2026)
The chokepoint is no longer theoretical. China's April 2025 licensing regime on seven heavy rare earths, then Announcement No. 61, which would have denied export licences to military-affiliated buyers from 1 December 2025 before the Busan truce suspended it, turned processing dominance — roughly 90% of rare-earth separation — into an active lever. Washington has responded with capital, not just rhetoric: the Pentagon took a ~15% equity stake in MP Materials in July 2025 with a $110/kg NdPr price floor, and committed up to $725m to Energy Fuels' separation and metallisation plant in June 2026. Beijing answered by adding MP Materials and USA Rare Earth to its own control list. Lithium, meanwhile, has rebounded sharply — battery-grade carbonate near $26,000/t in Q1 2026, roughly double a year earlier though still well below the 2022 peak. The Busan truce holds only into late 2026; the April controls remain fully intact beneath it.
China has already weaponised this leverage
Gallium and germanium export controls (2024), tungsten export controls (2025), antimony restrictions, rare earth processing restrictions — each escalation tests Western resilience. The EU selected 60 Strategic Projects. The US held critical minerals talks with 54 countries. But chemical processing capacity takes 7-10 years to build and requires precursor chemicals that China also dominates.
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Signal stack
Evidence stacked leading → lagging
Technology-native KPIs
Metrics that predict trajectory, tracked over time
Landscape map
Who builds what — and who depends on whom
Catalyst calendar
Dated events that will move the position
Technology roadmap
Milestones on the path to maturity
Watchlists
Companies, people and papers — each with a remove-by condition
Decision frameworks
The same call, framed for your desk
Thesis changelog
When our view changed, and why
Change our mind
3 disconfirming conditions
Comparable wave
The historical analogue on the S-curve
Common mistakes
What the market gets wrong right now
The rest is inside
You've read the verdict. The file is much deeper.
The full signal stack, technology-native KPIs tracked over time, the landscape of who depends on whom, the dated catalyst calendar, decision frameworks for every desk, live watchlists and the changelog of every time our call on Critical minerals supply chains has changed — all live inside CanaryIQ.