FORGE vs. China: Inside the $30B Race to Reshape Critical Mineral Supply Chains

The February 2026 U.S. Critical Minerals Ministerial launched FORGE (Forum on Resource Geostrategic Engagement), a 54-nation coalition designed to break China's stranglehold on rare earth and lithium processing. With over $30 billion in mobilized U.S. capital, 21 bilateral agreements, and a novel system of reference price floors enforced through adjustable tariffs, this represents the most aggressive restructuring of strategic mineral supply chains since the 1970s oil crisis. But can this coalition realistically reduce dependence on Beijing by 2030?

What is FORGE and Why Does It Matter?

FORGE, announced by U.S. Secretary of State Marco Rubio on February 4, 2026, succeeds the Minerals Security Partnership (MSP) as the primary vehicle for Western coordination on critical minerals. The forum brings together 54 countries representing roughly two-thirds of global GDP, chaired initially by South Korea. Unlike the MSP's project-by-project approach, FORGE creates a preferential trade-and-investment zone with coordinated price floors to counter what officials describe as China's market manipulation through state subsidies and export controls.

The urgency is clear: China controls approximately 90% of global rare earth processing, 60% of lithium refining, and over 70% of cobalt processing. In 2025, Beijing imposed export controls on samarium, dysprosium, and terbium in retaliation to U.S. tariffs, triggering sixfold price spikes outside China. The 2025 rare earth export controls demonstrated Beijing's willingness to weaponize its processing dominance.

The $30 Billion War Chest: Project Vault and Bilateral Deals

The U.S. government has mobilized over $30 billion in letters of interest, investments, and loans for critical mineral projects in just six months. Centerpiece is Project Vault, a $10 billion Export-Import Bank initiative to establish a U.S. Strategic Critical Minerals Reserve. Vice President JD Vance described the mechanism at the ministerial: 'We will establish reference prices that act as floors, maintained through adjustable tariffs, to ensure stable investment conditions and counter unfair subsidies.'

The ministerial produced 11 new bilateral critical minerals framework agreements, bringing the total to 21 deals in five months. Signatories include Argentina, Morocco, Peru, the Philippines, the UAE, and the UK. These agreements cover joint investment in mining, processing, and technology transfer. The U.S.-Australia rare earth pact, an $8.5 billion deal signed earlier, serves as a template for these partnerships.

How Price Floors Would Work

FORGE's innovative mechanism involves setting reference prices for key minerals like neodymium, dysprosium, and lithium carbonate. If market prices fall below these floors—potentially due to Chinese state-subsidized dumping—member nations can impose adjustable tariffs on imports from non-members. This creates a protected market for FORGE producers, incentivizing investment in new mines and processing facilities outside China. Critics warn this could violate WTO rules, but the administration argues national security exceptions apply.

Can FORGE Break China's Grip by 2030?

Experts remain divided. China's dominance is not merely in mining but in decades of accumulated processing expertise, infrastructure, and cost advantages. A Council on Foreign Relations report argues the U.S. cannot out-mine or out-process China and should instead pursue a leapfrog strategy focused on innovation, recycling, and substitute materials. The report recommends AI-enabled materials science, bioengineered mining, and e-waste recycling as faster alternatives.

However, FORGE's scale is unprecedented. The 21 bilateral agreements cover diverse geographies: Argentina holds vast lithium reserves; Morocco has phosphate and cobalt; the Philippines is rich in nickel. By linking these into a coordinated system, FORGE aims to create a parallel supply chain that could serve 60% of global demand by 2035. The global critical minerals stockpile race is accelerating, with Australia announcing an $800 million reserve and the EU advancing its RESourceEU strategy.

Resource Nationalism: A Double-Edged Sword

One major challenge is rising resource nationalism among producer nations. A 2026 analysis identifies 15 countries where mining projects face increased risks from forced renegotiations, higher taxes, and export restrictions. Mexico nationalized lithium in 2022; Tanzania mandates local processing; Indonesia banned raw nickel exports. These policies can raise costs and delay projects, potentially undermining FORGE's timeline.

FORGE's 'membership by trade' model attempts to address this by conditioning participation on shared trade rules rather than joint capital deployment. But balancing producer nations' desire for domestic processing with FORGE's need for efficient supply chains remains a delicate negotiation.

China's Counter: The 15th Five-Year Plan

Beijing is not standing still. China's 15th Five-Year Plan, unveiled in March 2026, explicitly emphasizes global leadership in rare earth elements and plans to strengthen export controls. The plan allocates billions for domestic exploration and overseas mining investments—China has already spent over $120 billion since 2023 locking up mineral assets in Africa, Latin America, and Southeast Asia.

The plan also introduces a foreign direct product rule (FDPR) for rare earth magnets, giving Beijing leverage over global access to these critical components for EVs, wind turbines, and defense systems. China controls 93% of permanent magnet production. The China rare earth magnet FDPR could become a powerful counter-weapon against FORGE.

Expert Perspectives

Dr. Jane Nakano, a senior fellow at CSIS, notes: 'FORGE represents a significant shift from project-based to market-based coordination. But the real test will be whether member countries can maintain political will through the inevitable price volatility and implementation delays.'

Meanwhile, analysts at Climate Energy Finance warn that China's overseas investments create dependencies that FORGE cannot easily unwind. 'China is building processing capacity in host countries, locking in long-term supply relationships that Western initiatives will struggle to match,' the report states.

Frequently Asked Questions

What is FORGE in critical minerals?

FORGE (Forum on Resource Geostrategic Engagement) is a 54-nation coalition launched in February 2026 to coordinate critical minerals policy, investment, and trade rules, replacing the Minerals Security Partnership. It aims to create a preferential trade zone with price floors to counter China's market dominance.

How much money has the U.S. committed to critical minerals?

The U.S. government has mobilized over $30 billion in letters of interest, investments, and loans for critical mineral projects since mid-2025, including $10 billion for Project Vault, a strategic reserve.

What are reference price floors and how do they work?

Reference price floors are minimum prices set for key critical minerals. If market prices fall below these floors, FORGE members can impose adjustable tariffs on imports from non-members, protecting domestic producers and incentivizing investment in alternative supply chains.

Can the U.S. and allies reduce dependence on China by 2030?

Most experts consider full independence by 2030 unrealistic given China's decades-long head start in processing. However, FORGE aims to create a parallel supply chain that could cover 30-40% of allied demand by 2030, with significant reductions in critical vulnerabilities.

How is China responding to FORGE?

China's 15th Five-Year Plan (2026-2030) strengthens export controls on rare earths, expands domestic exploration, and increases overseas mining investments. Beijing has also introduced a foreign direct product rule for rare earth magnets to maintain leverage over global supply chains.

Conclusion: A Decisive Moment

The FORGE framework, formalized in February 2026, is now being implemented across 11 new bilateral deals. China's 15th Five-Year Plan, expected to be finalized mid-2026, will reveal Beijing's full counter-strategy. This makes 2026 the decisive moment for the global critical minerals landscape. Whether FORGE can overcome resource nationalism, China's entrenched advantages, and internal coordination challenges will determine whether the West can achieve meaningful supply chain diversification—or remain dependent on Beijing for the technologies of the future.

Sources

• U.S. Department of State: 2026 Critical Minerals Ministerial
• Atlantic Council: US Critical Minerals Policy Goes Collaborative with FORGE
• CNBC: US Allies Critical Minerals Price Floors
• Mining Observer: China's 15th Five-Year Plan
• Council on Foreign Relations: Leapfrogging China's Critical Minerals Dominance
• CSIS: Critical Minerals Ministerial Analysis