Copper Refining: China’s 40% Control Creates the Real Bottleneck

Just like for rare earth minerals, the bottleneck is not the reserves but the refining and processing. Whoever controls refining controls the bottleneck. China’s position mirrors its dominance in rare earth processing: modest resources transformed into supply chain leverage through downstream investment.

The Numbers

The Rare Earth Playbook

China has only the eighth-largest copper reserves but controls over 40 percent of global refined production. This mirrors the rare earth pattern exactly:

1. Invest in downstream processing while others focus on mining
2. Build scale and expertise that becomes difficult to replicate
3. Convert processing dominance into supply chain leverage

Modest resources transformed into strategic control through deliberate industrial policy.

The Dependency Problem

The energy transition and AI buildout depend on a metal whose processing is concentrated in one country. This creates:

• Supply chain vulnerability for Western companies
• Geopolitical leverage for China
• Strategic urgency for diversification investments

The Strategic Implication

Control over vertical integration in critical minerals—from mining to refining—determines who captures value and who holds leverage. Countries with reserves but without processing remain dependent on those who invested in downstream capability.

The lesson applies beyond copper: in critical supply chains, processing often matters more than resources. China understood this; Western nations are learning it.

What This Means

Diversifying copper refining requires massive capital, years of construction, and expertise that China has spent decades developing. The window for building alternative capacity is narrow—and closing.