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Despite the Western push to diversify critical minerals supply away from China, Beijing is set to further tighten its grip on the market of key battery metal lithium.
China is poised to become the world’s biggest lithium miner by next year, surpassing Australia, commodity price reporting agency Fastmarkets forecasts.
China already has an outsized dominant position in the refined lithium market, where it held a 73% market share as of 2024, per data from the International Energy Agency (IEA). Sourcing more of the raw material at home – even at a loss in current market prices and conditions – would give China additional strength in the lithium market.
China actually holds a market share of between 73% and 98% in each of all markets for the critical and rare earth minerals, except nickel, where Indonesia is the dominant player.
In 2024, China accounted for 83% of refined copper, 73% of global refined lithium supply, 97% of cobalt, 98% of graphite, and 96% of the rare earths market, according to the IEA’s estimates.
In the lithium mining industry, China is set to boost its extraction volumes and beat Australia by 2026 to the top spot as the world’s biggest miner, according to a forecast by Fastmarkets cited by Reuters.
Australia became the biggest lithium miner in 2017 when it surpassed Chile.
However, the 80% crash in lithium prices over the past year upended the near-term prospects of the lithium mining industry.
Australian lithium mining companies have halted extraction at several projects amid the price crash. Lithium miners have seen profits and margins shrink and projects curtailed or deferred until market conditions improve.
While Australian lithium miners scaled back output, China has been stepping up – its government is heavily subsidizing lithium and other key minerals extraction, also in view of keeping or strengthening Beijing’s global dominance.
Unlike Australian firms, Chinese lithium miners haven’t cut back on production, due to the central government’s support and “pressure” from local governments to keep output – and jobs – even amid a price downturn, according to Paul Lusty, head of battery raw materials research at Fastmarkets.
Then there is also the goal to keep market share in the global market amid rising lithium demand, Lusty told Reuters on the sidelines of this week’s Fastmarkets Lithium and Battery Raw Materials Conference in Las Vegas.
“This continued production – despite the lack of profitability within the market – starts to make a lot more sense when you consider all those factors,” Lusty said.
While China looks to grow its lithium mining and refining, even if it’s currently unprofitable, lithium miners in free-market economies are suffering—delaying project expansions, cutting jobs, and reducing near-term investments.
Despite major deals and government support in the West for building domestic supply chains, China has raised its market share in critical and rare earth minerals over the past few years, the IEA’s annual report, Global Critical Minerals Outlook 2025, found.
“Diversification is the watchword for energy security, but the critical minerals world has moved in the opposite direction in recent years, particularly in refining and processing,” the agency noted.
In the past five years to 2024, while the rest of the world was looking for ways to bolster domestic supply, growth in refined material production was heavily concentrated among the leading suppliers.
China dominates refining for 19 of the 20 minerals the agency has analyzed, holding an average market share of around 70%.
“Three-quarters of these minerals have shown greater price volatility than oil, and half have been more volatile than natural gas,” the IEA said.
Despite well-supplied markets, export controls and rising supply concentration, especially in China, are raising the risks to the security of supply.
