China invests $120b in overseas mining, tightening grip on critical minerals: Report

China has invested more than $120 billion in overseas mining and mineral processing projects since 2023, expanding its control over critical minerals supply chains vital for clean energy technologies, according to a report by Climate Energy Finance, an Australian think tank.

The report, titled “Raw Power”, said Chinese firms have focused on lithium, nickel, copper and rare earths—materials essential for electric vehicles, renewable energy and industrial decarbonisation.

It added that China dominates global processing capacity, accounting for around 90% of rare earth refining and battery component production, and about 60% of lithium processing.

Chinese companies have increasingly paired mining investments with the development of local processing facilities and infrastructure such as ports, railways and power plants, often in exchange for long-term resource access and supply agreements.

“This approach aligns Chinese national, energy security, geopolitical and economic interests with partner governments’ development and energy transition goals,” the report said.

The strategy marks a shift from earlier overseas investments under the Belt and Road Initiative, which were more focused on traditional power generation, to building integrated supply chains for clean energy materials.

The report identified developing regions—including Indonesia, Chile and several African countries—as key destinations, with Chinese firms helping establish domestic value chains in host countries.

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In some cases, resource nationalism policies have reinforced this trend. Countries such as Indonesia and Zimbabwe have banned exports of raw mineral concentrates, prompting Chinese investors to build local processing capacity rather than rely solely on extraction.

Beyond Southeast Asia, China has significantly expanded its footprint in Africa’s mining sector through a mix of acquisitions, joint ventures and infrastructure-for-resources deals.

Companies such as CMOC Group Limited have emerged as major players in the Democratic Republic of Congo (DRC), where high-grade copper and cobalt deposits are critical to global battery supply chains. CMOC has ramped up output at key projects, positioning itself among the world’s largest cobalt producers.

Other firms, including Zhejiang Huayou Cobalt, have invested heavily in lithium processing in Zimbabwe, while Chinese-backed joint ventures continue to expand copper and cobalt production in central and southern Africa.

Chinese investments often follow a “minerals-for-infrastructure” model, in which companies—backed by state financing—build roads, hospitals and other infrastructure in exchange for mining rights and long-term supply agreements.

While the approach has helped accelerate industrial development and clean energy supply chains in host countries, it has also raised concerns over rising debt burdens, limited local job creation and lack of transparency in some agreements.

Chinese firms have also increased overseas manufacturing activity in response to higher tariffs and shifting decarbonisation policies in the United States, further embedding themselves in global clean energy supply chains.

The report said the strategy is reinforcing China’s position at the centre of the global energy transition, even as it reshapes resource development models across emerging markets.

Editing by Reiner Simanjuntak