Why America Is Building a 'Mineral Cartel' Against China

China controls over 70% of the world's critical mineral processing, from lithium for your phone battery to rare earths powering wind turbines. Now America wants to change that game entirely.

Washington just wrapped up a "Critical Minerals Ministerial" with 54 countries in attendance, unveiling plans for what amounts to an anti-China mineral cartel. The message was clear: no more getting held hostage by Beijing's supply chain dominance.

When Minerals Become Weapons

Secretary of State Marco Rubio didn't mince words about the risks of mineral concentration in "one country" – a thinly veiled reference to China. Beijing has repeatedly weaponized its mineral dominance, cutting off rare earth exports to Japan during territorial disputes and restricting gallium and germanium sales to the U.S. amid tech tensions.

But China's strategy goes beyond supply cuts. State subsidies have allowed Chinese companies to flood markets with below-cost minerals, making competing projects economically unviable. Australian and Canadian mines have shuttered as a result, deepening global dependence on Chinese supply chains.

Vice President JD Vance put it bluntly: "We will eliminate that problem of people flooding into our markets with cheap critical minerals to undercut our domestic manufacturers."

The New Economic Fortress

America's response involves coordinated price floors and "adjustable tariffs" to maintain what Vance called "pricing integrity." Translation: if China dumps cheap minerals, tariffs will kick in to protect allied producers.

This isn't just trade policy – it's economic warfare. The U.S. is essentially creating a preferential trading bloc where members agree to buy minerals at predetermined minimum prices, regardless of what China offers.

President Trump's $12 billion Project Vault adds another layer, creating strategic stockpiles of lithium, copper, and rare earths. The message to markets is clear: America won't be caught empty-handed again.

The FORGE Alliance Takes Shape

The newly announced "Forum on Resource Geostrategic Engagement" (FORGE) represents something unprecedented – a minerals-focused NATO of sorts. Unlike previous initiatives, FORGE aims to coordinate not just supply chains but pricing mechanisms and investment flows.

Eleven countries have already signed bilateral agreements, with 17 more completing negotiations. The European Union is on board, signaling this isn't just an American initiative but a broader Western realignment.

FORGE builds on the earlier "Pax Silica" partnership focused on AI supply chains, suggesting a comprehensive strategy to decouple critical technology inputs from Chinese control.

Market Disruption Ahead

For investors and businesses, this represents a fundamental shift. Mineral prices will likely rise as artificially low Chinese pricing gets blocked out. Companies heavily reliant on Chinese supply chains – from Tesla to Apple – will face difficult choices about sourcing and costs.

The semiconductor industry faces particular pressure. Chips require dozens of specialized minerals, many dominated by China. As tariffs bite and alternative suppliers ramp up, production costs could surge, potentially slowing the AI boom that's driven recent market gains.

Meanwhile, mining companies in allied nations suddenly look more attractive. Australian lithium producers, Canadian rare earth developers, and African mineral extractors may see renewed investment as the U.S. prioritizes supply security over cost efficiency.