Critical Minerals Geopolitics 2026: US FORGE vs China's Grip

The February 2026 Critical Minerals Ministerial in Washington, D.C., marked a watershed moment in the global contest for lithium, rare earths, cobalt, and copper. With the launch of the Forum on Resource Geostrategic Engagement (FORGE) and over $30 billion in mobilized project finance, the United States is mounting its most aggressive challenge yet to China's stranglehold on critical mineral supply chains. As Beijing retains approximately 90% of rare earth refining and 65% of lithium processing capacity, the strategic choke point directly threatens the energy transition, AI infrastructure expansion, and defense production capacity across Western economies.

The Strategic Context: Why Critical Minerals Matter in 2026

Critical minerals—lithium, rare earth elements, cobalt, copper, and graphite—are the building blocks of modern technology. They power electric vehicle batteries, wind turbines, AI chips, military hardware, and robotics. The International Energy Agency's Global Critical Minerals Outlook 2025 projects that demand for lithium will increase fivefold by 2040, while rare earth demand rises 50–60%. Yet the supply chain remains dangerously concentrated. China controls 60–90% of global processing capacity for these materials, creating what experts call a "strategic vulnerability" for Western economies.

The energy transition supply chain risks have become a central concern for policymakers. The IEA warns that a sustained battery metals supply shock could increase battery pack prices by 40–50%, derailing EV adoption targets and renewable energy deployment.

FORGE: A New Framework for Mineral Security

At the February 4, 2026, ministerial, Secretary of State Marco Rubio and Vice President JD Vance announced FORGE as the successor to the Minerals Security Partnership. Unlike its predecessor, FORGE is designed as a preferential trade-and-investment zone with coordinated price floors to counter adversarial market manipulation. Vice President Vance described using adjustable tariffs and reference prices at each production stage to create stable investment conditions.

The ministerial produced 11 new bilateral critical minerals framework agreements with countries including Argentina, Morocco, Peru, the Philippines, the UAE, and the United Kingdom. This brings the total to 21 deals signed in just five months. FORGE, chaired by South Korea through June 2026, aims to link these agreements into a functioning plurilateral system covering two-thirds of the global economy. The U.S. government has mobilized over $30 billion in financing support, including EXIM's $10 billion Project Vault initiative to establish a domestic strategic reserve for critical minerals.

How FORGE Differs from the Minerals Security Partnership

The Minerals Security Partnership, launched in 2022, focused on diplomatic coordination and project facilitation. FORGE goes further by creating enforceable trade mechanisms. According to the Atlantic Council, the initiative reflects a strategy of "practicing statecraft through markets rather than around them." However, operational details and full membership remain unclear, raising questions about implementation.

China's Dominance: The Midstream Trap

China's leverage lies not in mining but in processing. As of May 2026, China produces approximately 61% of the world's mined rare earths—down from 80–90% a decade ago. But the decisive advantage is downstream: China controls an estimated 91% of global rare earth refining and processing capacity. For lithium, China processes about 65% of global supply, despite holding only a fraction of reserves.

This "midstream trap" means that even if Western nations ramp up mining, they remain dependent on Chinese refineries. The rare earth export controls 2026