Is China’s minerals chokehold breaking?

Grab your hard hats, Intriguer. The boffins at the Paris-based International Energy Agency just dropped their latest critical minerals outlook and it’s a doozy, starting with…

1. ⛔ Triple

That's the surge in mineral tariff codes China has slapped with export controls since 2023. And given China's market dominance, it’s turning a seemingly niche risk (play nice or we'll cut you from our dysprosium!) to something much more systemic.

How systemic...?

2. 😧 $6.5 trillion

That's the rest of the world's economic output now at risk — think auto, defence, tech, energy — if China fully implements all those rare earth export controls (largely now on pause until November).

That, dear Intriguer, is what you call leverage, just as US trade talks limp on. Tiny random molecules making the difference between EVs, wind turbines, iPhones, and F35s or... not.

And yet somehow, China isn't the only chokepoint anymore, because...

3. 🚢 Half

That's how much of the world's seaborne sulphur trade would ordinarily pass through Hormuz if it wasn’t now grinding back towards a halt amid the renewed US-Iran war.

Who cares about an element that smells like fart, you ask? You could've picked a less crude way to ask, but sulphur is the base feedstock for sulphuric acid, which is essential for leaching critical minerals (copper, nickel, some lithium) for the energy transition.

Acid costs have already spiked from (say) 3% of lithium cash costs to over 11% by May. Apparently an oil-war in the Gulf doesn't care about our net-zero targets.

And yet while acid gets more pricy upstream, something downstream in China now costs...

4. 🆓 Zero

That's been China's record low benchmark copper smelter fees lately. Spot fees have been negative, paying to smelt your copper! Why? China’s subsidies helped build 90% of the world's new smelting capacity since 2005, totalling half the global capacity today.

But the result is these smelters are now so starved for raw materials they actually bid against each other to get the inputs they need just to keep their facilities running. Good if you're Chile, left keeping the entire value of your copper.

But for everyone else? That means half our copper supply rests on a subsidised machine that can go from free to gone with the flick of a switch in Beijing.

So the world's investors are rushing to break these bottlenecks, right? Right…?

5. 📉 9%

That's how much critical minerals investment actually declined last year. Even exploration spending dropped 10%. What's going on? It depends a bit on the mineral: copper investments still grew (we still can't really electrify without it), while various battery metals crashed (partly due to rapid shifts in chemistry).

But it's also a result of all the price volatility and international intrigue (💅) — how do you drop a few billion on a new processing plant when your prices can go to the moon or the basement based on Xi Jinping's mood that evening? You don't, unless you're...

6. 🏛️ Quadruple

That's the explosive growth in Western government financing commitments for mineral projects since 2023, filling the gaps left by spooked investors. Maybe more importantly, capitals are also committing to price floors — ie, don't worry about Beijing crashing those prices, just keep building and refining because we promise to keep buying.

And you know what? It's working. The report notes new refining projects and ramp-ups (like Australia's Lynas in Malaysia) have chipped China's rare earth refining dominance from 90% down to... okay, still 85%. But if all the other pledges and announcements actually become reality? It might drop further to… okay, still 70% by 2035.

So there you have it, dear Intriguer. The race to decouple is officially underway, but that finish line? Ufff, it's still decades and a few trillion away.