Dig, Baby, Dig? China’s Mineral Dominance and Ripple Effects into the Arctic

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Silicon Carbide. China is a significant producer of silicon, which has recently been recommended for inclusion to the 2025 US critical minerals list. Photo: United States Geological Survey

The Arctic Institute China Series 2025

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As Trump began his second presidency, he renewed his interest in Greenland uttering statements such as, ‘ownership and control over Greenland to be a necessity.’¹⁾Edvardsen A (2025) Trump Jr. visited Greenland after dad’s new proposals about buying the country, High North News, 8 January, https://www.highnorthnews.com/en/trump-jr-visited-greenland-after-dads-new-proposals-about-buying-country. Accessed on 26 May 2025 ‘We need Greenland for our national security,’ President Trump stated in January 2025. ‘You look outside – you have China ships all over the place’.²⁾Trump D (2025) President-elect Trump announces $20 billion foreign investment to build data centers. CNBC Television. YouTube. 7 January, https://www.youtube.com/live/1foNDJQ0GG8?si=X3Ihj-fR_gE0P4wc&t=3037. Accessed on 20 August 2025

In addition to his own family members visiting the island, Vice President JD Vance also flew to Greenland in March 2025.³⁾Keaten, J & Gera V (2025) Donald Trump Jr. arrives in Greenland with a message from his dad: ‘We’re going to treat you well’, AP, 8 January, https://apnews.com/article/greenland-us-trumps-son-visit-56bc01f1d3431c035b22ad6564579938. Accessed on 26 May 2025 As Vance’s visit was not welcomed by the Greenlandic government, he scaled back on the visit’s agenda.⁴⁾Grieshaber, K (2025) Vance and wife to tour U.S. military base in Greenland after diplomatic spat over uninvited visit. PBS NewsHour, 28 March, https://www.pbs.org/newshour/world/vance-and-wife-to-tour-u-s-military-base-in-greenland-after-diplomatic-spat-over-uninvited-visit. Accessed on 2 June 2025 While distant from China, the President’s interest in Greenland has a connection to the Asian country. Greenland is located centrally in the Arctic. It is home to plentiful minerals that its residents depend on for future economic activities. China dominates the global extraction and processing of minerals, and Trump views China’s dominance as a threat. Whereas Biden sought partnerships, Trump’s America First logic undermines international cooperation and alienates allies. His approach to Greenland has become yet another dimension by which the US differs in opinion from the other six Western Arctic countries.

The securitization of critical mineral supply chains

Critical minerals are those that have significant economic importance for a country and are associated with supply risks. They can be crucial for a country’s security and are often referred to as strategic minerals. Critical minerals are essential for a green transition, defense, electronics, and other industries. Examples of critical minerals include rare earth elements (REE), lithium, and graphite. China dominates the supply chains for many of these raw materials, from extraction to finished products, and has up to 90 percent of the global processing capacity, according to the International Energy Agency.⁵⁾Cozzi, L, Petropoulos, A, Wanner, B et al. (2024, April). Batteries and Secure Energy Transitions. World Energy Outlook Special Report. International Energy Agency. https://iea.blob.core.windows.net/assets/cb39c1bf-d2b3-446d-8c35-aae6b1f3a4a0/BatteriesandSecureEnergyTransitions.pdf. Accessed on 1 January 2026

While the demand for critical minerals continues to rise, and the world is facing a shortage of these minerals to produce clean energy technologies needed in the green transition, an additional challenge is that extraction and processing are concentrated in a small group of countries. The securitization of critical mineral supply chains creates challenges for the green transition and the defense industry of Western countries.

China’s path to dominance

China and the US are competing for control over critical minerals supply chains, and China currently has the upper hand. China’s position within supply chains is hardly accidental; it is the result of political decisions and economic advantages.

Since the 1990s, China has pursued a targeted policy to achieve dominance in relation to REEs and other critical minerals, implementing a national policy to prioritize selected minerals and technologies. China’s then-leader Deng Xiaoping is said to have remarked in 1992 during his trip to southern China to launch his economic reforms that, “the Middle East has oil; China has rare earth elements.” Additionally, Western countries at that time were content to move their polluting mining and processing activities to another continent.

In the years that followed, China developed an industrial sector with incentives to encourage companies to supply strategic materials and products. There were national plans for mineral resources, as well as specific plans for provinces and sectors and specialized plans for specific minerals and raw materials. These plans set production targets and guidelines to ensure a steady supply of minerals.

China’s position was solidified not only due to its industrial policy but also due to the country’s natural wealth of some of these resources, cheap labour, economies of scale, lower capital expenditures, and lower environmental standards. This industry has caused significant environmental damage in China. Many Western countries have had other industrial priorities and have been reluctant to invest in mining due to pollution and environmental destruction. In Europe, social acceptance of mining is low, and it has been cheaper to import materials from China.

Arctic countries’ response

With rising global awareness of the strategic importance of critical minerals, Western countries are forming alliances to establish supply chains independent of Chinese influence. In response to China’s dominance and geopolitical tensions, the US and the EU have implemented strategies to reduce dependency on Chinese minerals. One example of this alliance is the Minerals Security Partnership (MSP), established under President Biden, which encompasses a coalition of 14 countries collaborating to build new value chains through the coordinated financing and political backing of “strategic projects”.⁶⁾United States Department of State (2022) Minerals Security Partnership. https://www.state.gov/minerals-security-partnership/. Accessed on 1 January 2026 Ensuring a stable long-term supply has become a key goal for politicians in many Western countries, including Norway. The Nordic region has thus emerged as a potential key contributor in the development and supply of critical minerals, not least in relation to European demand.⁷⁾Eilu P, Bjerkgård T, et al. 2021. The Nordic supply potential of critical metals and minerals for a Green Energy Transition. Nordic Innovation Report. https://www.nordicinnovation.org/critical-metals-and-minerals. Accessed on 22 August 2025 Greenland, Finland, Norway, and Sweden share a diverse geology with various critical mineral deposit types and extensive active mining industries.

For Europe, this creates a dilemma between the green transition and security considerations. Critical minerals are central both to the renewable industry and the defense sector. Norway, for example, is dependent on Chinese magnesium, which is on the Norwegian list of critical raw materials. Magnesium is pivotal for the production of aluminum, which is crucial in the defense industry.

Given China’s dominant position in the supply chain of critical minerals, European countries wish to reduce their dependency on China. There is a fear that China may halt sales, delay deliveries, or significantly increase prices, thereby affecting important industries.

Also Russia seeks to have its own supply chains of REEs independent from China, despite the two countries having decided to intensify the “mutual supply of basic materials, mineral resources and agricultural products” in the context of “the comprehensive partnership and strategic interaction”.⁸⁾Kremlin (2025, May 8) Joint Statement of the Russian Federation and the People’s Republic of China on Further Deepening Comprehensive Partnership and Strategic Interaction in the New Era in Commemoration of the 80th Anniversary of the Victory of the Soviet Union in the Great Patriotic War, the Victory of the Chinese People in the War of Resistance against Japanese Aggression and the Founding of the United Nations. http://www.kremlin.ru/supplement/6309#sel=29:24:UjT,29:33:njk;70:19:Uha,70:23:Uja. Accessed on 22 August 2025

The Russian government is actively seeking to achieve “industrial and technological sovereignty” and to develop its mining and processing capabilities through a newly announced national project aimed at creating a comprehensive supply chain of REEs.⁹⁾Kremlin (2025, February 21). Plenary session of the Future Technologies Forum. http://www.kremlin.ru/events/president/news/76304#sel=14:23:yjW,14:57:ngU;20:18:Uho,20:33:eia. Accessed on 22 August 2025

Russian actors, such as the Ministry of Trade and Rosatom, view China as a competitor and have opted to diversify their supply, including by seeking alternative Asian suppliers of minerals such as dysprosium.¹⁰⁾Roscongress (2025) Rare and rare earth metals are an integral part of high-tech production, 20 February, https://roscongress.org/sessions/fbt-2025-delovaya-programma-redkie-i-redkozemelnye-metally-neotemlemaya-chast-vysokotekhnologichnykh-proizvodstv/translation/# Accessed on 22 August 2025

The contentious geopolitical situation has also impacted China’s opportunities to engage in the Nordic Arctic. For example, the Swedish Space Corporation had cooperated with Chinese customers since the 2000s but decided not to renew contracts with them in 2020, citing reasons such as a changing global environment.¹¹⁾Andersson, P (2024) The recent backlash against China in the Nordic Arctic: Prospects for future Chinese engagement in the region. Swedish National China Centre, Brief No. 5. https://www.ui.se/globalassets/ui.se-eng/publications/other-publications/the-recent-backlash-against-china-in-the-nordic-arctic-prospects-for-future-chinese-engagement-in-the-region.pdf. Accessed on 31 December 2025

In Norway, the latest example is the large, state-owned shipping company China Ocean Shipping Company (COSCO) and the port authorities of Kirkenes, which had entered discussions about a possible collaboration that was “shut down” by the Minister of Justice due to national security concerns.¹²⁾Regjeringen.no (2024) Kirkenes Havn: Mehl klar på at kinesiske etableringer kan bli stanset [Kirkenes Havn: Mehl is aware that Chinese establishments may be stopped]. https://www.regjeringen.no/no/aktuelt/kirkenes-havn-mehl-klar-pa-at-kinesiske-etableringer-kan-bli-stanset/id3052357/. Accessed on 22 August 2025

In its Arctic Strategy, the US Defense Department has stated that China is not an Arctic state, “yet it identifies China as the main challenge to U.S. interests in the region”.¹³⁾Bekkevold, J I & Hilde P S (2024) The new U.S. Arctic strategy is focused on the wrong country. Foreign Policy: (1) 11 November) https://foreignpolicy.com/2024/11/11/us-arctic-strategy-china-russia-alaska-geopolitics/. Accessed on 11 November 2024

China’s counterpolicies

Geopolitical uncertainty has also increasingly affected China, especially when it comes to the US’s tariffs and European scepticism towards the country. It also exposes China’s vulnerabilities in its supply chains. The country relies on imports from many countries in Africa and Asia, several of which are close allies of the US, such as the Philippines, from which China sources nickel. To ensure control over these supply chains, China has implemented various strategies to manage risks related to geopolitics, resources, and markets. China also depends on critical minerals such as REEs for its green transition. China is the largest global emitter of CO2 and aims to reach peak emissions before 2030 and achieve carbon neutrality by 2060. Critical minerals are also crucial in the context of clean energy, which has become a significant economic engine for China, accounting for 10 percent of the country’s GDP in 2024.¹⁴⁾Myllyvirta L Qin Q & Qiu Cc (2025) 19 February Analysis: Clean energy contributed a record 10% of China’s GDP in 2024. CarbonBrief. https://www.carbonbrief.org/analysis-clean-energy-contributed-a-record-10-of-chinas-gdp-in-2024/. Accessed on 21 August 2025

Although China is the largest producer of REEs and has the largest global reserves, the country has become dependent on imports for parts of its supply. This dependency is due to domestic policies aimed at limiting mining and processing to conserve resources and reduce environmental pollution. For some important materials, including metals such as lithium and cobalt used in battery production, China relies on imports. Nearly all cobalt used in China comes from the Democratic Republic of the Congo, making China’s supply vulnerable.

China has introduced several measures to secure its position. For instance, the country has implemented export controls on minerals that are vital for clean energy technology through measures such as the Export Control Law of 2020. Furthermore, China is increasing domestic production and stockpiles of strategic minerals to mitigate supply disruptions and price fluctuations. At the same time, China uses quotas to limit the production of certain critical minerals, such as specific reserves of rare earth elements, to prevent the over-extraction of resources. China is also diversifying its mineral imports and investing in countries where resources are concentrated. Additionally, China is increasing domestic exploration to secure new reserves.

From an environmental perspective, which has become more important in recent years, China emphasizes recycling resources, reducing waste, and developing new technologies. In terms of national security, the country has also strengthened the regulatory framework for mining, which includes less transparency around mining planning. Furthermore, the Chinese authorities have strengthened governance and oversight of the mineral sector, making it more difficult to obtain information about guidelines and national plans for mineral resources.

Trump 2.0: the battle intensifies

Trump is heavily focused on outcompeting China and on securing the US’ access to necessary and critical minerals. Trump toyed with the idea of purchasing Greenland already in his first term. Trump has once again set his sights on Greenland in the battle for minerals. The Arctic has drawn substantial attention in recent years due to its critical mineral resources. Although the extraction of critical minerals in the Arctic can potentially contribute to a green shift, it can also have serious environmental consequences and impact the lives of Indigenous peoples and local communities.

Trump has attempted to secure access to critical minerals abroad, for example by establishing the Reconstruction Investment Fund between the US and Ukraine in April 2025, which is intended to give the US exclusive access to Ukraine’s mineral potential in exchange for continued US military support. Domestically, Trump has launched aggressive measures to increase production both on land and at sea, including in the executive order “Unleashing America’s Offshore Critical Minerals and Resources” from April 24, 2025.¹⁵⁾The White House (2025) Unleashing America’s Offshore Critical Minerals and Resources. https://www.whitehouse.gov/presidential-actions/2025/04/unleashing-americas-offshore-critical-minerals-and-resources/. Accessed on 22 August 2025 The high tariffs against China were justified by the need to protect American industry and secure the US’s access to critical minerals.

Trump has also signed an Executive Order activating the Defense Production Act to increase the production of critical minerals, a crisis law from the Korean War that gives the government control over industrial production during emergencies.¹⁶⁾Maher K & Liu J (2025) Trump invokes wartime powers to increase production of critical minerals. CNN, 21 March, https://edition.cnn.com/2025/03/21/business/trump-increase-production-critical-minerals-hnk-intl. Accessed on 21 August 2025 The battle for minerals also takes place on the seabed, with both the US and China eager to start mining under the ocean surface.¹⁷⁾Hvinden I S (2025) Er havbunnen neste stopp for Trump? DN, 8 April, https://www.dn.no/kronikk/mineraler/havbunnen/havbunnsmineraler/er-havbunnen-neste-stopp-for-trump/2-1-1801879. Accessed on 22 August 2025; The Economist (2024) China is itching to mine the ocean floor, 28 July, https://www.economist.com/china/2024/07/28/china-is-itching-to-mine-the-ocean-floor. Accessed on 22 August 2025

As a response to US sanctions related to the export of technology to Chinese companies, China introduced export controls on graphite to the US in December 2024, an important mineral in batteries for electric vehicles. Furthermore, China responded in April 2025 to US tariffs on Chinese goods by introducing new export restrictions on seven rare earth minerals and magnets. According to Bloomberg¹⁸⁾Bloomberg (2025 U.S. and China take a step back from sky-high tariffs and agree to pause for 90 days for more talks, 14 May, https://www.bnnbloomberg.ca/tariffs/2025/05/12/us-and-china-take-a-step-back-from-sky-high-tariffs-agree-to-pause-for-90-days/. Accessed on 22 August 2025 China and the US at their first bilateral meeting in Geneva in May agreed that China will pause the restrictions for 90 days, in exchange for the US reducing the tariff from 145 to 30 percent. In May 2025, Trump ordered American software suppliers used to design semiconductors to stop selling to China.¹⁹⁾Sevastopulo D Wu ZJ & Acton M (2025) Donald Trump orders US chip software suppliers to stop selling to China. Financial Times, 28 May, https://www.ft.com/content/2c0db765-03ac-4820-8a02-806469848bee. Accessed 22 August 2025

China views Trump’s trade policies as “malicious attempts to block and suppress China” and has been unwilling to be the first to chicken out, pledging to “resolutely defend” its interests.²⁰⁾FMPRC (2025) Foreign Ministry Spokesperson Lin Jian’s Regular Press Conference on May 30, https://www.fmprc.gov.cn/eng/xw/fyrbt/202505/t20250530_11637703.html. Accessed on 22 August 2025 Increasing retaliatory actions from both countries have created economic challenges and geopolitical tensions.

What this could mean for Arctic countries?

As the competition for critical minerals intensifies, the Arctic is once again at the centre of the strategic interests of the major powers USA and China. Critical mineral extraction in the Arctic could potentially provide materials essential for the green transition and renewable energy technologies. However, it also poses serious environmental risks and could impact the lives of Indigenous peoples and local communities. The increased focus on the Arctic for mineral resources may accentuate geopolitical competition in the region.

Nordic countries are striving to balance the economic opportunities presented by mineral extraction with the need to protect their environments and communities–risking their own supply chains by collaborating with allies to ensure a stable and secure supply of critical minerals. This presents an insurmountable challenge. In the worst-case scenario, Nordic countries are poised to follow the Russian practice of Arctic extractionism with proforma rubberstamp environmental assessments and without free, prior, and informed consent for the indigenous population. In a recent example, local Indigenous residents of Tyanya, Sakha Republic, urgently appealed to Russian authorities to defend their traditional lands against the perpetuation of colonial practices in extensive gold mining projects, which steal reindeer-herding lands and poison rivers²¹⁾Residents of Tyanya village in the Olyomkinsk District (2024) An Open Letter, 17 May, https://aartyk.ru/wp-content/uploads/2024/05/%D0%9E%D1%82%D0%BA%D1%80%D1%8B%D1%82%D0%BE%D0%B5-%D0%BF%D0%B8%D1%81%D1%8C%D0%BC%D0%BE-%D0%A2%D1%8F%D0%BD%D1%8F.pdf. Accessed on 22 August 2025

Increased attention to mineral extraction must be understood in the geopolitical context of the trade war between China and the US, national security, and the desire for independence from China’s dominance in the area. This illustrates the challenges Europe faces. Trump’s approach is to secure the US’s access. Security comes at a cost. The West cannot yet completely detach from China, and even if it were possible to become independent of goods from China, it would be more costly and less efficient. It would also mean a total transformation of the international economy. Is Europe willing to take on the environmental consequences that come with the extraction and processing of rare earth elements on its own soil? If European countries are not to buy Chinese renewable products, such as solar panels, we will have to buy raw materials and minerals from China in the foreseeable future. Are we ready to pay more for inferior products that we could buy from China because we want them to be “homemade”? Much is at stake in this critical battle for minerals.

Gørild M. Heggelund is a Research Professor, Iselin Stensdal is a Senior Researcher and Erdem Lamazhapov is a PhD Research Fellow, all at the Fridtjof Nansen Institute.