China has established a dominant position in the global supply chain for critical battery materials, including lithium, cobalt, and graphite. This dominance spans mining, refining, and export policies, shaping the geopolitical landscape of battery production and energy storage. The country’s strategic investments, control over processing infrastructure, and trade policies have made it a pivotal player in the industry, with significant implications for global markets and supply chain security.

Lithium is a cornerstone of modern battery technology, and China controls a substantial portion of its refining capacity. While Australia is the largest producer of lithium raw materials, contributing over half of global lithium mine supply, China processes approximately 60% of the world’s lithium. This refining dominance allows China to influence lithium prices and availability, even as other regions ramp up mining operations. Chinese firms have also secured long-term supply agreements with lithium-producing countries in South America, such as Chile and Argentina, further consolidating their market position.

Cobalt presents a more complex scenario due to its concentrated supply chain. The Democratic Republic of Congo (DRC) supplies around 70% of the world’s cobalt, but China dominates the refining and processing stages. Over 80% of cobalt refining occurs in China, with major Chinese companies controlling significant mining assets in the DRC through direct investments and partnerships. This control has raised concerns about supply chain vulnerabilities, particularly given the geopolitical instability in the DRC and ethical issues surrounding artisanal mining. Western nations and other regions are exploring alternatives, including investments in cobalt projects in Australia and Canada, but these efforts face challenges in scaling to match Chinese capacity.

Graphite, another critical material for battery anodes, is another area where China holds a commanding position. The country produces roughly 65% of the world’s natural graphite and refines over 90% of the material used in battery anodes. Even as other countries develop graphite resources, China’s refining infrastructure and cost advantages make it difficult for competitors to displace its market share. Export restrictions and tariffs on processed graphite have further reinforced China’s leverage, prompting battery manufacturers to seek alternative sources or develop synthetic graphite solutions.

China’s export policies play a crucial role in its dominance. The government has implemented export controls on certain refined materials, including graphite, citing national security concerns. These policies can create bottlenecks for manufacturers outside China, forcing them to rely on Chinese suppliers or invest in alternative supply chains. Additionally, China’s Belt and Road Initiative has facilitated infrastructure investments in resource-rich countries, securing access to raw materials while expanding its influence in key regions.

Geopolitically, China’s control over battery materials has prompted responses from other nations. The United States and the European Union have identified critical mineral supply chains as a strategic priority, launching initiatives to reduce dependence on Chinese refining and processing. The U.S. Inflation Reduction Act, for example, includes incentives for sourcing battery materials from domestic or allied sources. Similarly, the European Union has introduced regulations to secure sustainable and ethical supply chains for critical minerals.

Australia has emerged as a significant alternative supplier, particularly for lithium. The country’s stable regulatory environment and high-quality lithium deposits make it an attractive partner for Western battery manufacturers. Australian firms are also investing in refining capabilities to reduce reliance on China, though scaling these operations remains a challenge. Africa, particularly countries like the DRC and Zimbabwe, holds vast mineral resources but faces infrastructure and governance hurdles. Western investments in African mining projects aim to diversify supply chains, but progress is slow due to logistical and political complexities.

Trade restrictions and geopolitical tensions further complicate the landscape. China’s export controls on graphite and rare earth elements have raised concerns about supply disruptions, particularly amid rising U.S.-China trade tensions. In response, manufacturers are exploring stockpiling strategies and long-term contracts to mitigate risks. Some companies are also investing in secondary sources, such as recycling or alternative materials, though these solutions are not yet scalable enough to replace primary supply chains.

The dominance of China in battery materials has far-reaching implications for the global energy transition. As demand for electric vehicles and renewable energy storage grows, securing stable and diversified supply chains becomes increasingly critical. While alternatives in Australia and Africa offer potential pathways, China’s entrenched position in refining and processing ensures its continued influence over the market. Policymakers and industry leaders must navigate these dynamics carefully, balancing economic, environmental, and geopolitical considerations to ensure sustainable growth in the battery sector.

Looking ahead, the competition for critical battery materials will intensify as nations and corporations vie for control over resources. China’s strategic investments and policies have given it a formidable advantage, but shifts in global trade dynamics and technological advancements could reshape the landscape. The development of alternative supply chains, coupled with advancements in material efficiency and substitution, may gradually reduce reliance on Chinese dominance. However, for the foreseeable future, China remains the central player in the battery materials ecosystem, with its policies and market actions reverberating across the industry.

The interplay between resource control, trade policies, and geopolitical strategy underscores the complexity of the global battery supply chain. As nations seek to secure their energy futures, the race for critical minerals will remain a defining feature of the 21st-century economy. China’s leadership in this arena sets the stage for ongoing competition, collaboration, and innovation as stakeholders work to balance growth with sustainability and resilience.