Processing and Refining Bottlenecks in Critical Minerals
Facts checked against sources on . How we check facts.
A processing bottleneck exists when a mineral can be mined in many places but converted into a usable chemical or metal in only a few. The International Energy Agency found that the top three refiners held an average 86% of supply across six key minerals in 2024, up from about 82% in 2020. Cobalt shows the pattern: Congo (Kinshasa) mined an estimated 73% of the world's cobalt in 2025, while China was the leading refiner. Nickel is the counterexample, because its mining is more concentrated than its processing.
86%
average share of the top three refiners across six key minerals in 2024, up from about 82% in 2020
Source: IEA, May 2025
73%
of world cobalt mine output came from Congo (Kinshasa) in 2025, while China led refined cobalt production
100%
of heavy rare earth processing was in China in the EU's 2023 assessment; light rare earths 85%
94%+
of electric vehicle anode material shipped in January to September 2025 came from Chinese companies
Source: SNE Research
Where is processing more concentrated than mining?
The table sets the largest miner of each mineral beside the largest processor. The mining figures are USGS estimates for 2025 and the processing figures are from the EU's 2023 assessment, so the years differ and the comparison shows the pattern, not exact changes.
| Mineral | Largest miner (USGS, 2025) | Largest processor or refiner | What it shows |
|---|---|---|---|
| Cobalt | Congo (Kinshasa), 73% | China, the world leading producer of refined cobalt (USGS; no share given) | Mining and refining sit in different countries. |
| Lithium | Australia, 92,000 of 290,000 t (about 32%) | China, 56% of processing; Chile 32% (EU 2023) | The largest miner is not the largest converter. |
| Rare earths (light) | China, 270,000 of 390,000 t of oxide (69%) | China, 85% of light rare earth processing (EU 2023) | Processing is more concentrated than mining. |
| Rare earths (heavy) | No share given by USGS | China, 100% of heavy rare earth processing (EU 2023) | A single-country processing step. |
| Gallium | China, 99% of primary low-purity gallium | China, 94% of processing (EU 2023) | Concentrated at both stages. |
| Tungsten | China, the leading producer of concentrates (USGS; no share given) | China, 86% of processing (EU 2023) | Concentrated at both stages. |
| Natural graphite | China, an estimated 82% of world production | Chinese companies, more than 94% of EV anode material (SNE Research, 2025) | The concentration continues into manufacturing. |
| Nickel | Indonesia, 2.6 of 3.9 million t (67%) | China, 33% of processing; Indonesia 12%; Japan 9% (EU 2023) | Processing is less concentrated than mining. |
Sources: USGS Mineral Commodity Summaries 2026 chapters on cobalt, lithium, rare earths, gallium, tungsten, graphite and nickel; European Commission, Study on the Critical Raw Materials for the EU 2023; SNE Research. Percentages for lithium and nickel mining are calculated from USGS tables.
Why does the gap between mining and processing matter?
The gap matters because refining capacity cannot be rerouted as easily as ore. A cobalt or lithium mine can sell to any refinery that accepts its product, but a refinery outside China needs feedstock contracts, permits and trained operators that take years to assemble. Where mining and processing are both concentrated, as for gallium and tungsten, a single policy decision moves both stages at once. The page on why China dominates processing covers how the position was built, and the chemical processing page shows what is processed where, including in the United States.
What relieves a processing bottleneck?
New capacity can grow fast from a small base but still fall short of demand. USGS estimates U.S. production of rare earth compounds and metals at 8,900 tonnes in 2025, up from 120 tonnes in 2021, yet a 2026 European Parliament study cited by BISI puts U.S. separation capacity at about 15,000 tonnes a year against demand of about 45,000 tonnes. The IEA expects the top rare earth refiner's share to fall from 85% in 2025 to about 70% by 2035 if planned projects arrive on time, but finds that planned refining capacity would reach only about two thirds of expected 2035 mine output.
Frequently asked questions
What is a processing bottleneck in critical minerals?
A processing bottleneck is a stage where a few countries or companies convert mined material into the chemicals and metals buyers need. It matters because mining can be spread across many countries while the conversion step is concentrated in one or two.
Which critical minerals have the most concentrated processing?
In the EU's 2023 assessment China held 100% of heavy rare earth processing, 94% of gallium, 91% of magnesium, 86% of tungsten and 85% of light rare earths.
Is processing always more concentrated than mining?
No. Indonesia mined about 67% of the world's nickel in 2025, while the EU's 2023 count put the largest processor, China, at 33%. For cobalt, lithium and rare earths the processing stage is the tighter one.
Can new processing capacity fix the bottleneck?
It can reduce it, but slowly. U.S. rare earth compound and metal output grew from 120 tonnes in 2021 to 8,900 tonnes in 2025, and the IEA expects the top refiner's share to fall from 85% to about 70% by 2035 if planned projects arrive, which would still leave processing concentrated.
Sources
Read on October 13, 2026. Figures on this page come from these documents; where a number is an estimate, the source says so.
- USGS Mineral Commodity Summaries 2026: cobalt, lithium, rare earths, gallium, tungsten, graphite and nickel. Each chapter is linked under the table
- European Commission: Study on the Critical Raw Materials for the EU 2023. Overview table of main global producers by stage
- IEA: Diversification is the cornerstone of energy security (May 2025). The IEA site blocks automated readers, so the figures come from reports of the release
- Global Mining Review: report on the IEA Global Critical Minerals Outlook 2026 (17 July 2026). IEA outlook figures come from this report, not the IEA site
- Bloomsbury Intelligence and Security Institute: China's rare earth processing dominance. Cites the 2026 European Parliament study on U.S. separation capacity
- SNE Research: global EV anode material shipments, January to September 2025
