By Tanmay Goel, Researcher, Nitisara

Global Mining value chains have become increasingly concentrated in specific regions and countries, creating significant strategic vulnerabilities for the world economy. While Australia dominates iron ore production and the Democratic Republic of Congo controls cobalt mining, China has established overwhelming control over mineral processing and refining across multiple commodities. Regional supply chains demonstrate stark dependencies, with North America and Europe relying heavily on imports for critical minerals while Asia-Pacific benefits from proximity to major processing hubs. These concentration patterns create supply chain risks that governments and industries are actively working to address through diversification strategies and domestic capacity building.

Introduction

Mineral value chains form the foundation of modern industrial economies, connecting raw material extraction through complex processing networks to end-use applications across virtually every sector. According to the U.S. Geological Survey’s Mineral Commodity Summaries 2024, the estimated value of nonfuel mineral production in the United States alone reached $105 billion in 2023, representing a 4% increase from the previous year. These supply chains encompass more than 90 individual minerals and materials that enable everything from steel production and electronics manufacturing to clean energy technologies and defense systems. The complexity extends far beyond simple extraction, requiring sophisticated processing facilities that transform raw ores into high-purity materials suitable for advanced manufacturing applications.

The global distribution of mineral production and processing capabilities has evolved dramatically over recent decades, with significant concentration emerging in specific countries and regions. The International Energy Agency’s Global Critical Minerals Outlook 2024 highlights that China controls approximately 85-90% of global rare earth element refining capacity, 87% of magnesium production, and maintains substantial market shares across numerous other strategic materials. This concentration has created both opportunities for economic efficiency and unprecedented vulnerabilities in global supply chains. The Democratic Republic of Congo accounts for over 70% of global cobalt production, while Australia dominates iron ore exports with 898.3 million metric tonnes in 2024. These patterns of geographic concentration, combined with the increasing demand for critical minerals driven by clean energy transitions and digital technologies, have forced governments and industries worldwide to reassess their supply chain strategies and develop new approaches to ensure resource security.

How concentrated is global mining production and processing across different regions?

Global mineral production and processing demonstrate extreme concentration patterns that vary significantly by commodity and stage of the value chain. For raw material extraction, regional specialization has created distinct global leaders in different minerals. Australia produces approximately 898.3 million metric tonnes of iron ore annually, representing about 35.4% of global production, with most exports destined for China which imports 82.8% of Australian iron ore shipments. The major Australian export terminals include Port Hedland (534.2 million tonnes), Port Walcott (177.0 million tonnes), and Dampier (130.1 million tonnes), demonstrating the scale and infrastructure supporting these trade flows.

Global Production of Key Minerals by Major Producing Countries (2024), Source: Author’s Own

China’s dominance becomes even more pronounced in mineral processing and refining operations. According to data from the China Magnesium Association, China produced 1,025,800 tonnes of primary magnesium in 2024, representing 91.6% of global production, with Yulin city alone accounting for 55.08% of worldwide magnesium output 2. For cobalt, while the Democratic Republic of Congo dominates mining with approximately 135,000 metric tonnes annually representing 70% of global production, China controls 73% of global cobalt refining capacity. This creates a two-stage dependency where raw materials flow from mining countries to Chinese processing facilities before reaching end markets.

China’s Market Share in Global Mining – Processing and Refining (2024), Source: Author’s Own

The concentration extends across multiple critical mineral categories. China processes 90% of global rare earth elements, 99% of graphite, and 68% of nickel refining capacity. The U.S. Geological Survey notes that the United States is 100% import reliant for 12 critical minerals and has net import reliance greater than 50% for 49 nonfuel mineral commodities 1. European Union data shows that Europe imports 98% of its rare earth magnets from China, highlighting the extent of processing concentration 1. These patterns reflect decades of strategic investment by China in downstream processing capabilities that other regions allowed to migrate overseas during globalization.

What are the regional patterns of mineral supply chain dependencies and trade flows?

Regional mineral supply chain dependencies reflect a complex web of specialization, with each major region exhibiting distinct patterns of production, consumption, and trade relationships. North America demonstrates significant domestic mineral production capabilities but faces critical dependencies in processing and refining. The United States produces substantial quantities of zinc ores and concentrates (824 million kg in 2019) which are exported for smelting, while refined zinc is primarily imported. Canada serves as a major supplier to the United States for 23 different mineral commodities, while China supplies 24 commodities, creating a delicate balance between regional and global dependencies.

Regional Mineral Import Dependencies and Domestic Production Capacity, Source: Author’s Own

Europe faces the most severe import dependencies among developed regions, with limited domestic mineral production outside of specific countries. The European Union’s Critical Raw Materials Act sets ambitious targets for 2030: producing 10% of critical materials domestically, processing 40%, and recycling 25%. Currently, Europe’s strategic projects span 13 member states and focus on materials vital for the energy transition, including 22 lithium projects, 12 nickel projects, and 10 cobalt projects 3. The European Commission has identified 47 Strategic Projects to boost domestic supply and reduce dependencies, particularly in battery metals and rare earth elements.

Asia-Pacific demonstrates the most complex regional dynamics, with China serving as both a major producer and the dominant processor for most minerals. Japan’s trade patterns illustrate typical regional dependencies, importing copper-zinc alloys primarily from South Korea ($29.996 million), China ($20.695 million), and Thailand ($4.987 million). Australia’s role as a major raw material exporter creates significant trade flows within the region, with iron ore shipments from Australia to China representing one of the world’s largest mineral trade relationships. The Asian Development Bank notes that while Indonesia is a major producer of cobalt, copper, and nickel, and the Philippines produces significant nickel, the bulk of extracted minerals are exported as raw materials rather than processed domestically.

Africa and Latin America represent regions rich in mineral resources but lacking processing capacity. The Democratic Republic of Congo’s cobalt dominance creates supply chain vulnerabilities, particularly given the reliance on South Africa’s Durban port for exports to Asia. According to the UN Panel on Critical Energy Transition Minerals, developing countries with significant mineral reserves often face environmental degradation, human rights concerns, and limited local value addition. Latin American countries like Chile and Peru are major copper producers, but processing capabilities remain limited, creating dependencies on external refining capacity.

What are the primary risks & challenges associated with concentrated mining supply chains?

The concentration of mineral production and processing creates multiple layers of systemic risk that extend beyond traditional trade relationships. Geopolitical risks have become increasingly prominent, as demonstrated by recent export restrictions and trade tensions. The IEA Global Critical Minerals Outlook 2024 warns that such concentration represents a significant vulnerability for countries pursuing clean energy transitions 2. Supply chain disruption risks have been dramatically highlighted by recent events. The COVID-19 pandemic affected 25% of global zinc mine supply, with mine closures in key producer countries including Peru and Mexico. The magnesium supply crisis of 2021, when Chinese production curtailments to reduce power consumption created worldwide shortages, demonstrated how domestic policy decisions in concentrated production centers can create immediate global disruptions.

Economic and strategic risks compound these vulnerabilities. However, the International Energy Agency notes that 70-75% of projected supply growth for refined lithium, nickel, cobalt, and rare earth elements through 2030 comes from today’s top three producers 2. This increasing concentration, combined with rising demand, creates potential for supply bottlenecks and price volatility that could derail decarbonization efforts. Environmental and social risks represent another critical dimension of supply chain concentration. The UN Environment Programme’s work on critical energy transition minerals emphasizes that current supply chains often involve environmental degradation and human rights abuses, particularly in artisanal and small-scale mining operations 5. The OECD Due Diligence Guidance for Responsible Supply Chains highlights the need for transparent mineral supply chains to prevent extraction and trade from becoming sources of conflict and human rights violations 6. These risks are exacerbated when production is concentrated in regions with limited governance frameworks or enforcement capabilities.

Conclusion

In conclusion, the analysis of global mining value chains reveals complex interdependencies that pose significant challenges for economic security and sustainable development. The extreme concentration of processing capabilities, particularly China’s dominance across multiple critical minerals, creates systemic vulnerabilities that extend far beyond traditional trade relationships. While raw material production shows regional specialization with Australia leading in iron ore and the Democratic Republic of Congo dominating cobalt, the downstream processing concentration represents the most significant strategic chokepoint in global supply chains.

Regional responses to mineral supply chain challenges are taking shape through ambitious policy frameworks including the European Union’s Critical Raw Materials Act, the United States’ critical minerals initiatives, and emerging international cooperation frameworks, though the scale of investment required and time needed to develop alternative processing capabilities suggest current dependencies will persist for years to come. The path forward requires recognition that mineral security has become inseparable from economic security and climate goals in the 21st century, with success depending on sustained international cooperation, significant capital investment, and innovative approaches to recycling and material efficiency that address not only supply security but also environmental and social sustainability as emphasized by the World Bank and UN Panel, ultimately enabling countries to develop resilient, diversified mineral supply chains with ethical sourcing standards essential for navigating the complexities of the clean energy transition.

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