If you have ever used a smartphone, a battery, or anything with a chip in it, you have depended on China, whether you knew it or not. Beijing is now making that dependency more explicit.
From June 15, China will enforce sweeping new controls over its strategic mineral sector. The 79-article regulatory framework, signed by Premier Li Qiang, gives the state authority to cap total mining output, vet who is permitted to operate in the sector, and conduct national security reviews on any foreign investment in Chinese mines. Critically, the rules also require that strategic mineral reserves be stored at their source for a minimum of five years, meaning China is not just controlling what leaves the ground, but ensuring it stays within reach.
To understand why this matters, consider the scale of China's dominance. It controls over 60% of the world's mined rare earth supply and, more importantly, nearly all of its processing capacity. Rare earths are not niche materials. They are essential inputs for fighter jets, EV motors, wind turbines, and semiconductor manufacturing. When China restricted exports of seven heavy rare earth elements in April 2025, prices for some minerals, including yttrium, spiked sharply and left Western manufacturers scrambling.
These new rules do not come in isolation. They land days after a Trump-Xi summit where rare earth supply was a central point of negotiation and just months into the operationalisation of the US-led Pax Silica initiative, a coalition formed to build alternative supply chains for critical minerals and semiconductor inputs outside of Chinese control.
The tension is structural: China is locking down supply precisely as the West is trying to route around it. For Australian investors, this is not background noise. Australia sits on significant reserves of rare earths, lithium, and cobalt and is a Pax Silica signatory. The question is no longer whether demand will come. It is whether Australia can insert itself appropriately to process and supply at scale before the window narrows.
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