Western critical minerals projects are hampered by public funding gaps, limiting their ability to challenge China’s dominance, according to a report from the SAFE Center for Critical Minerals Strategy.

China controls more than 90 per cent of global processing capacity for rare earths and minerals such as cobalt, nickel and lithium. Between 2001 and 2023 it poured $94bn into overseas critical minerals projects, securing a dominant refining position. The International Energy Agency estimates $500bn in investment will be needed to meet Western policy goals, while the US‑China trade war and the Iran conflict have intensified the push for self‑sufficiency; tungsten prices have surged 70 per cent since the war began.

The US has moved aggressively: the Department of Defense extended a $150mn loan and a $400mn equity investment to MP Materials, set price floors and an offtake backstop for all magnets produced over the next decade, and struck similar deals with Lynas Rare Earths and an MP‑Maaden joint venture. The International Development Finance Corporation deployed $1.2bn of equity financing for critical minerals in 2026. Abigail Hunter, executive director of the Center, stressed that governments must move from agreements to rapid capital deployment.

However, export credit agencies and development finance institutions face mandate mismatches, as they were built to promote exports and development, not resource security. Milo Mc Bride of the Carnegie Endowment for International Peace noted the debate over whether public finance should target return on investment or geostrategic interests, warning that without aligned mandates private capital will stay on the sidelines.