A small Northern Ontario community is set to play a major role in North America’s clean energy future.
Electra Battery Materials is moving forward with plans to build North America’s first battery-grade cobalt refinery in Cobalt, Ont., with commercial operations expected to begin by the end of 2027. Once operational, the facility will produce up to 6,500 tonnes of cobalt sulfate annually—enough to supply approximately one million electric vehicle batteries each year.
A milestone for North America’s battery industry
The refinery will be the first of its kind in North America and only the second battery-grade cobalt refinery outside China. The project marks a significant step toward strengthening the continent’s critical mineral supply chain as demand for electric vehicles, energy storage systems and advanced technologies continues to grow.
Electra says the refinery will process cobalt hydroxide sourced from the Democratic Republic of the Congo (DRC), with the material shipped through South Africa and Montreal before being refined in Canada.
Reducing reliance on China
China currently dominates global cobalt refining, processing more than 75 per cent of the world’s supply. By establishing refining capacity in Canada, the project aims to diversify supply chains and improve North America’s access to a mineral considered essential for electric vehicles, consumer electronics and defence technologies.
Electra CEO Trent Mell says critical minerals have become increasingly important not only for transportation and renewable energy, but also for national security.
The refinery has received financial support from both the Canadian and U.S. governments, reflecting growing efforts to build more resilient domestic supply chains for critical minerals.
Industry sees both opportunity and challenges
While demand for cobalt is expected to increase, some industry experts note that evolving battery technologies could reduce future dependence on the metal. Others point to ongoing concerns surrounding cobalt mined in the DRC, particularly related to human rights and responsible sourcing.
Electra says it is committed to responsible procurement practices and believes cobalt will remain a critical material, particularly as demand grows in defence applications alongside the electric vehicle market.
A new chapter for the town of Cobalt
The refinery also represents an economic transformation for the historic mining community of Cobalt. Once one of the world’s leading silver-producing regions following the area’s famous 1903 discovery, the town is now positioning itself as a key hub in North America’s battery materials industry.
Although commercially viable local cobalt reserves have yet to be developed, the new refinery could help establish Cobalt as an important processing centre, supporting Canada’s broader strategy to strengthen its critical minerals sector and secure the supply chain for next-generation technologies.
The artificial intelligence boom is reshaping the technology industry in ways few predicted. While much of the attention has focused on powerful GPUs from companies like Nvidia, another critical component has quietly become one of the industry’s biggest bottlenecks: memory chips.
Now, two of the world’s most influential technology leaders—Elon Musk and Tim Cook—are publicly acknowledging that the shortage has reached unprecedented levels.
A Crisis Few Saw Coming
Apple CEO Tim Cook recently described the global memory shortage as a “hundred-year flood,” emphasizing that soaring costs are making it increasingly difficult for manufacturers to absorb rising component prices. Shortly afterward, Elon Musk echoed those concerns, calling the surge in memory prices “the biggest price jump in anything I’ve ever seen.”
Their comments highlight a growing reality: AI isn’t just creating new software opportunities—it is fundamentally changing the economics of semiconductor manufacturing.
Why Memory Matters
Every AI model requires enormous amounts of high-speed memory to train and run efficiently. As companies race to build larger AI data centers, demand for advanced memory technologies has skyrocketed.
Unlike processors, memory production cannot be expanded overnight. Building fabrication plants takes years and billions of dollars in investment, leaving manufacturers struggling to keep pace with explosive demand.
The result is a severe supply imbalance that is affecting nearly every major technology company.
Consumers Are Beginning to Feel the Impact
The consequences are already visible in the marketplace.
Apple has raised prices on several MacBook and iPad models after warning that higher memory costs had become unsustainable. Other technology companies, including Microsoft and Dell, have also adjusted pricing as component costs continue climbing.
For consumers, this could mean:
Higher prices for laptops, tablets, and gaming devices
Longer product replacement cycles
Slower rollout of new hardware
Continued inflation across consumer electronics
Tesla’s Long-Term Strategy
Rather than simply accepting the shortage, Elon Musk believes the industry needs dramatically more manufacturing capacity.
According to reports, Tesla is exploring expanded chip manufacturing initiatives aimed at integrating logic, memory, and advanced packaging into a more resilient production ecosystem. The goal is simple: reduce dependence on constrained global supply chains while supporting the company’s ambitious AI roadmap.
The Bigger Picture
The memory shortage illustrates a broader shift in the technology landscape.
For decades, computing performance depended largely on faster processors. Today, AI workloads demand enormous amounts of memory bandwidth alongside processing power. As AI models continue to grow, memory may become the industry’s most valuable resource.
Companies that secure reliable memory supplies will gain a significant competitive advantage, while those unable to do so may face higher costs, production delays, and reduced margins.
Final Thoughts
The AI revolution is creating extraordinary opportunities, but it is also exposing weaknesses in the global semiconductor supply chain. When leaders like Tim Cook and Elon Musk publicly acknowledge that memory—not computing power—is becoming the industry’s primary constraint, investors and consumers alike should pay attention.
The next phase of AI won’t simply be defined by smarter models. It will be determined by who can build—and afford—the infrastructure needed to power them.
The United States is taking a major step toward strengthening its domestic supply chain for critical minerals, with the U.S. Army announcing landmark agreements with four mining and materials companies to build mineral processing facilities on military bases across the country.
The initiative, announced by the Pentagon, represents the first program of its kind under the Trump administration aimed at reducing America’s dependence on foreign sources for strategically important minerals that are essential for defense, clean energy, and advanced manufacturing.
Four Companies Selected
The U.S. Army has signed agreements with:
REalloys Inc. – Rare earth minerals processing
Titan Mining Corp. – Graphite processing
ioneer Ltd. – Lithium processing
EnergyX – Boron processing
These facilities will process minerals that are considered vital to national security, supporting everything from military weapons systems and electronics to electric vehicle batteries and renewable energy technologies.
Strengthening America’s Supply Chain
Critical minerals such as rare earth elements, lithium, graphite, and boron play an increasingly important role in modern industries. However, the United States has long relied on imports—particularly from China—for much of its processing capacity.
By locating processing plants on military installations, the Pentagon aims to accelerate domestic production while enhancing the resilience of U.S. supply chains. The strategy also aligns with broader efforts to ensure reliable access to materials needed for defense readiness during periods of geopolitical uncertainty.
Why It Matters
The global competition for critical minerals has intensified as countries race to secure resources needed for electric vehicles, semiconductors, renewable energy infrastructure, and advanced defense technologies.
The Army’s new partnerships could help:
Reduce dependence on foreign mineral processing.
Strengthen U.S. national security.
Support domestic manufacturing and job creation.
Build a more resilient supply chain for emerging technologies.
Increase America’s competitiveness in the global critical minerals market.
A Strategic Investment
While the agreements focus on processing rather than mining, experts view processing capacity as one of the most significant bottlenecks in the global critical minerals supply chain. Expanding domestic processing capabilities could allow the United States to capture more value from both domestic and allied mineral resources.
As demand for critical minerals continues to grow, this first-of-its-kind initiative signals a long-term commitment to building a secure and independent supply chain that supports both economic growth and national defense.
Looking Ahead
The Pentagon’s partnerships with REalloys, Titan Mining, ioneer, and EnergyX mark an important milestone in America’s strategy to secure access to critical minerals. If successful, the initiative could serve as a model for future public-private partnerships aimed at strengthening the nation’s industrial base and reducing strategic vulnerabilities in global supply chains.
With geopolitical competition intensifying and demand for critical minerals expected to rise sharply over the coming decades, investments like these may become increasingly central to U.S. economic and national security policy.
China has concluded the 14th Five-Year Plan period (2021–2025) with remarkable achievements in science, technology, and innovation. According to a report released by the National Bureau of Statistics, the country has significantly strengthened its innovation ecosystem, accelerated breakthroughs in strategic technologies, and deepened the integration of innovation across economic and social development.
From record investments in research and development to advancements in aerospace, artificial intelligence, and digital transformation, China’s progress demonstrates the growing role of science and technology as a driver of high-quality growth.
Rising Investment Fuels Innovation
One of the most notable achievements during the past five years has been the steady increase in research and development (R&D) investment.
China’s R&D expenditure grew from RMB 2.44 trillion in 2020 to RMB 3.93 trillion in 2025, representing an average annual growth rate of 10 percent. At the same time, R&D intensity—the proportion of R&D spending relative to GDP—increased from 2.36 percent to 2.80 percent, surpassing the average level of OECD countries.
The country also continued to expand its scientific workforce. Full-time R&D personnel increased from 5.24 million person-years in 2020 to 7.95 million person-years in 2025, maintaining China’s position as the global leader in R&D talent for 13 consecutive years.
The commercialization of research has also accelerated. The value of technology contracts nationwide rose sharply from RMB 2.8 trillion to RMB 7.6 trillion, highlighting stronger links between scientific discovery and industrial application.
Breakthroughs in Strategic Technologies
The 14th Five-Year Plan period witnessed major advances in frontier science and key technologies.
China established 77 national major scientific and technological infrastructure projects, many of which have reached internationally advanced standards. Significant progress was made in areas including:
Quantum information science
Artificial intelligence
Life sciences
Deep-sea exploration
Deep-earth research
Deep-space exploration
The country also achieved important milestones in semiconductor development, operating systems, and LiDAR technologies, strengthening its technological self-reliance in critical sectors.
Several landmark projects symbolize these achievements:
The Tiangong Space Station entered full operation and application.
The domestically developed C919 large passenger aircraft began regular commercial operations.
The “Mengxiang” deep-ocean drilling vessel was successfully commissioned.
These accomplishments demonstrate China’s growing ability to develop and deploy cutting-edge technologies at scale.
Building New Quality Productive Forces
Innovation has increasingly become the foundation of China’s industrial transformation.
By the end of 2025, the country had cultivated:
More than 600,000 technology and innovation-focused SMEs
504,000 high-tech enterprises
Over 140,000 specialized and sophisticated SMEs
Digital transformation has also accelerated across industries. Nearly 90 percent of industrial enterprises above designated size had completed digital transformation initiatives by the end of 2025.
Meanwhile, the “three new” economy—consisting of new industries, new business formats, and new business models—accounted for 18.01 percent of GDP in 2024, representing a significant increase compared with 2020.
China’s digital economy continued to expand, reaching 33.1 percent of GDP in 2024. The country also led the world with 101 “lighthouse factories,” globally recognized manufacturing facilities that showcase advanced digital and intelligent production capabilities.
Innovation Delivering Real-World Benefits
The impact of technological progress extends far beyond laboratories and factories.
Industrial robots are now deployed across 71 major industrial sectors, with China’s robot density significantly exceeding the global average. In the energy sector, the country accounts for more than half of the world’s installed new energy storage capacity.
Agricultural modernization has also accelerated, with the contribution rate of agricultural technological advancement surpassing 64 percent in 2025.
In healthcare, digital innovation has improved accessibility and efficiency. Remote medical service networks now cover every city and county nationwide, while cross-provincial direct settlement systems for medical expenses have benefited more than 560 million patient visits.
These developments illustrate how innovation is improving productivity, sustainability, and quality of life across society.
Looking Ahead: The 15th Five-Year Plan
As China enters the 15th Five-Year Plan period (2026–2030), the focus is shifting from building innovation capacity to maximizing innovation efficiency.
The latest report emphasizes the need to:
Deepen reforms in the science and technology system
Improve the efficiency of innovation ecosystems
Strengthen high-level technological self-reliance
Accelerate the development of new quality productive forces
Foster deeper integration between technological innovation and economic growth
With a stronger research base, world-class infrastructure, growing digital capabilities, and a thriving innovation ecosystem, China is positioning itself to play an increasingly influential role in shaping the future of global science and technology.
Conclusion
The achievements of the 14th Five-Year Plan demonstrate a significant leap in China’s scientific and technological capabilities. Increased R&D investment, expanding talent resources, breakthroughs in strategic technologies, and widespread digital transformation have collectively strengthened the nation’s innovation-driven development model.
As the next five-year period begins, China’s continued commitment to science, technology, and innovation is expected to serve as a key engine for sustainable economic growth, industrial modernization, and improved public well-being.
The Democratic Republic of Congo (DRC) is no longer content with being merely the world’s largest cobalt supplier. Through a combination of export controls, strategic partnerships, and geopolitical repositioning, Kinshasa is transforming its role from resource provider to market maker.
The implications extend far beyond commodity markets. Congo’s evolving cobalt strategy is influencing global supply chains, altering China’s dominance in critical minerals, and creating new opportunities for Western investors seeking secure access to strategic resources.
From Price Taker to Price Setter
For years, Congo’s vast cobalt reserves fueled global battery production while the country remained vulnerable to commodity price cycles and foreign influence. That dynamic is changing.
Since imposing cobalt export restrictions in early 2025, Congo has steadily tightened control over the flow of the metal. A complete export ban eventually gave way to a quota system, but the impact on global supply has been profound.
China, historically the dominant buyer of Congolese cobalt, has seen imports collapse. Customs data show that Chinese imports of Congolese cobalt intermediates during the first four months of 2026 were only a fraction of the volumes recorded during the same period a year earlier.
The result has been a dramatic tightening of supply. Cobalt prices have more than doubled from pre-restriction levels, while unusual pricing patterns have emerged throughout the supply chain. Cobalt hydroxide—the primary form exported from Congo—has at times traded at prices equal to or even above refined cobalt metal, highlighting growing concerns about access to raw material.
What initially appeared to be a temporary supply disruption increasingly looks like a structural shift. Market participants are beginning to attach a premium to cobalt sourced from Congo, reflecting both scarcity and strategic importance.
Reducing Dependence on China
Perhaps the most significant aspect of Congo’s strategy is its attempt to diversify away from overwhelming dependence on Chinese operators.
China has spent decades building a dominant position in Congolese mining and refining. Chinese companies control many of the country’s largest cobalt and copper assets, while Chinese refiners process much of the world’s cobalt supply.
Now, however, Kinshasa appears determined to rebalance those relationships.
Recent developments suggest growing momentum behind Western investment initiatives. U.S.-based critical minerals platform Virtus Minerals recently acquired the copper and cobalt assets of Chemaf, positioning itself to revive operations that have faced years of uncertainty.
At the same time, Congo’s state-backed Entreprise Générale du Cobalt (EGC) has entered into agreements with commodity trader Trafigura and U.S. startup EVelution to support a proposed cobalt refinery in Arizona. Such projects could create direct links between Congolese mines and American manufacturing, reducing reliance on Chinese processing capacity.
These developments align closely with broader U.S. efforts to secure critical mineral supply chains amid intensifying competition with China.
Infrastructure Creates New Options
Infrastructure is playing a crucial role in Congo’s westward pivot.
The Lobito Atlantic Railway, backed by Western governments and investors, is emerging as a strategic alternative export route. Connecting the Congolese copper belt to Angola’s Atlantic port of Lobito, the corridor provides access to global markets without relying exclusively on transport networks historically aligned with Chinese interests.
The railway has become a symbol of a larger geopolitical contest over critical minerals. Control over extraction matters, but so does control over logistics, processing, and market access.
For Western investors, the corridor offers a practical pathway for moving minerals to Europe and North America. For Congo, it provides leverage and flexibility.
Solving the Artisanal Mining Challenge
Despite these opportunities, one major obstacle remains: artisanal and small-scale mining (ASM).
Artisanal miners produce a significant share of Congo’s cobalt, but the sector has long been associated with unsafe working conditions, child labor concerns, and informal trading networks. These issues have discouraged many Western buyers from sourcing Congolese cobalt directly.
The government understands that expanding access to Western markets requires stronger assurances around responsible sourcing.
To address this challenge, EGC has partnered with commodity trader Mercuria to establish what is being described as a “gold standard” framework for ethical artisanal cobalt production at the Kasulo mining site.
Success is far from guaranteed. Previous efforts to formalize the artisanal mining sector have delivered mixed results. However, creating a transparent and verifiable supply chain is essential if Congo hopes to attract Western customers seeking ethically sourced critical minerals.
The stakes are high. Without credible solutions, concerns over “blood cobalt” could continue limiting market access regardless of supply shortages.
Growing Leverage in a Tightening Market
Congo’s position is being strengthened by supply disruptions elsewhere.
Several competing sources of cobalt face challenges. Canadian producer Sherritt International’s refining operations have come under pressure from U.S. sanctions affecting its Cuban partnerships. Madagascar’s Ambatovy nickel-cobalt project suffered cyclone-related disruptions and is undergoing ownership changes. Meanwhile, Indonesian producers are grappling with tighter mining quotas and processing constraints.
These developments further increase Congo’s influence over a market where it already accounts for more than 70% of global mine production.
In other words, there are few realistic alternatives.
A New Strategic Role
The broader story is not simply about higher cobalt prices. It is about a country leveraging its resource dominance to reshape its geopolitical position.
By restricting exports, encouraging Western investment, developing alternative infrastructure, and attempting to formalize artisanal production, Congo is seeking greater control over both its resources and its future.
Whether the strategy succeeds remains uncertain. Balancing relationships with China while attracting Western capital will require careful diplomacy. Reforming the artisanal mining sector will be difficult. And sustaining investor confidence will depend on political stability and regulatory consistency.
Yet one thing is increasingly clear: Congo is no longer just supplying the global cobalt market. It is actively redefining it.
As demand for batteries, electric vehicles, defense technologies, and advanced electronics continues to grow, Congo’s decisions will have an outsized influence on the future of critical minerals. The country is emerging not merely as a producer of cobalt, but as one of the most important strategic players in the global race for resources.
This version is designed for a business, commodities, mining, or geopolitical affairs audience and is fully original rather than a rewrite of the Reuters text.
As electric vehicles (EVs) become increasingly common on roads around the world, a new challenge is emerging: what happens to their batteries when they reach the end of their useful life?
China, the world’s largest EV market, is already facing this question at scale. Industry estimates show that nearly 400,000 tonnes of retired EV batteries were generated in 2025, and that figure is expected to exceed one million tonnes annually by 2030.
Rather than viewing these batteries as waste, Chinese recycling companies are treating them as valuable urban mines. At a large recycling facility operated by Brunp Recycling, a subsidiary of battery giant CATL, discarded batteries are being transformed into high-quality materials that can be used to manufacture the next generation of EV batteries.
Giving Old Batteries a Second Life
At Brunp’s integrated circular economy industrial park in Yichang, Hubei Province, trucks carrying retired EV batteries arrive every day. Each battery pack is carefully inspected, sorted, and recorded before entering the recycling process.
Most of these batteries have degraded to less than 80 percent of their original capacity. While they can no longer deliver the performance required for modern electric vehicles, they still contain valuable materials such as lithium, nickel, cobalt, manganese, copper, and aluminum.
In the past, weak oversight sometimes allowed retired batteries to re-enter the market through unauthorized channels, creating safety and environmental risks. To address this challenge, China launched a national traceability platform in 2026 that tracks every power battery throughout its lifecycle—from manufacturing and installation to retirement and recycling.
This digital tracking system helps ensure batteries are processed by certified recyclers and gives consumers greater confidence that their retired batteries will be handled responsibly.
Inside the Recycling Process
Once verified, battery packs move onto automated dismantling lines where robotic systems remove protective casings and separate battery cells.
Safety is a critical concern. Before further processing, each battery cell undergoes complete discharge to eliminate any remaining electrical energy.
The cells are then crushed into small fragments and sent through a series of specialized treatments. High-temperature pyrolysis under a nitrogen atmosphere helps break down materials while preventing unwanted reactions. Additional screening and sorting processes recover metals such as copper and aluminum for direct reuse.
What remains is a fine black powder known throughout the industry as black mass.
The Value Hidden in Black Mass
Black mass is the most valuable output of battery recycling. It contains concentrated amounts of critical battery minerals, including lithium, nickel, cobalt, and manganese.
Recovering these materials efficiently has long been one of the biggest technical challenges in battery recycling.
At Brunp’s hydrometallurgical facility, black mass is mixed with specially formulated acidic solutions inside large reaction tanks. The metals dissolve into a complex liquid mixture, creating what engineers sometimes call a “metal soup.”
Advanced separation technologies then isolate and purify each metal. According to the company, its direct recycling process achieves recovery rates of 99.6 percent for nickel, cobalt, and manganese, while lithium recovery reaches 96.5 percent.
These recovery rates represent a significant improvement over traditional recycling methods, which often suffered from lower efficiency, higher energy consumption, and larger volumes of waste residue.
Turning Waste into New Battery Materials
The purified materials are ultimately converted into battery-grade lithium carbonate and iron phosphate—two key ingredients used in lithium iron phosphate (LFP) batteries.
One of the most impressive aspects of the operation is its integration with nearby manufacturing facilities. Once regenerated, the materials are transported directly to neighboring plants where they are processed into new cathode materials for battery production.
The entire transformation—from retired battery pack to regenerated cathode raw material—takes only about one week.
Even more remarkable, batteries produced using recycled materials can perform at levels comparable to those made from newly mined resources. According to engineers at the facility, these batteries can support faster charging speeds, longer driving ranges, and lower-carbon manufacturing processes.
Building a Circular Battery Economy
Beyond recovering materials, the recycling process is helping improve future battery designs.
Engineers continuously share lessons learned from dismantling and material recovery with battery manufacturers. This feedback loop allows designers to create batteries that are easier to disassemble, recycle, and process at the end of their lives.
Recommendations include simplifying battery pack structures for automated dismantling and optimizing material compositions to improve future recovery and purification rates.
This approach creates a true circular economy: batteries are designed for recycling, recycled into raw materials, and then transformed into new batteries that can eventually re-enter the cycle.
The Road Ahead
As EV adoption continues to accelerate globally, battery recycling will become a critical pillar of the clean energy transition.
Recycling reduces dependence on newly mined raw materials, lowers environmental impacts, improves resource security, and helps create a sustainable supply chain for future battery production.
The journey from discarded battery to new energy storage device may begin with a substance called black mass, but it ultimately demonstrates something far more valuable: how innovation can transform waste into a strategic resource for a greener future.
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The global race for critical minerals has entered a new and potentially volatile chapter. China has imposed new restrictions on exports of key rare-earth materials to major U.S. companies, directly targeting efforts by Washington to rebuild domestic supply chains for strategically important magnets and advanced technologies.
The decision signals a significant escalation in the ongoing competition between the world’s two largest economies and highlights how critical minerals have become a powerful geopolitical tool.
Why Rare Earths Matter
Rare-earth elements are essential ingredients in a vast array of modern technologies. They are used in:
Electric vehicles
Wind turbines
Military drones
Advanced defense systems
Artificial intelligence hardware
Consumer electronics
Industrial machinery
While many countries possess rare-earth deposits, China dominates the global processing and refining industry. It supplies approximately 90% of the world’s light rare earths and refines more than 98% of heavy rare earths—materials that are particularly important for high-performance magnets and advanced technologies.
This dominance has given Beijing considerable leverage over global supply chains.
China’s New Restrictions
China’s Ministry of Commerce announced that ten American companies will face new restrictions on purchasing certain dual-use products from Chinese suppliers. Among the affected organizations are two of the most important players in the U.S. rare-earth sector:
MP Materials
USA Rare Earth
Both companies are central to the U.S. government’s strategy to reduce dependence on Chinese supplies.
The restrictions cover several critical rare-earth metals, including heavy rare earths such as dysprosium and terbium. These materials are essential for producing heat-resistant magnets used in electric motors, automotive systems, military applications, and industrial equipment.
A Blow to U.S. Supply Chain Ambitions
The timing is particularly significant.
Over the past several years, the U.S. government has invested heavily in rebuilding domestic rare-earth production capabilities. The Department of Defense and other federal agencies have directed hundreds of millions of dollars toward developing mining, refining, and magnet manufacturing infrastructure.
MP Materials operates the Mountain Pass mine in California, the largest rare-earth mining operation in the United States. The company is also constructing magnet manufacturing facilities in Texas designed to serve both commercial and defense customers.
Meanwhile, USA Rare Earth has been rebuilding domestic manufacturing capacity in Oklahoma and pursuing international partnerships to secure alternative supplies of critical minerals.
The new Chinese restrictions create additional obstacles for these efforts by limiting access to the materials needed during the industry’s transition period.
The Dysprosium Challenge
One of the most pressing concerns involves dysprosium, a heavy rare-earth element used to improve magnet performance under high temperatures.
Industry data indicates that Chinese shipments of dysprosium to the United States have effectively stopped since April 2025. The material is crucial for components found in:
Power steering systems
Braking systems
Electric motors
Aerospace applications
Defense technologies
Manufacturers can partially substitute dysprosium with terbium, but supplies of terbium have also become extremely limited.
Without reliable access to these materials, scaling domestic magnet production becomes significantly more difficult.
Global Concerns Growing
The latest move comes as governments worldwide seek to diversify critical mineral supply chains.
At the recent G7 summit, leaders pledged to reduce dependence on any single supplier and outlined a goal that no more than 60% of rare-earth imports should come from one country by 2030.
However, achieving that objective will be challenging. Building new mines, processing facilities, and refining operations requires years of investment, environmental approvals, technical expertise, and substantial capital.
Even promising projects in Australia, Brazil, Canada, and the United States remain far from matching China’s current production capacity.
Trade Tensions Could Reignite
The restrictions also threaten to reignite trade tensions between Washington and Beijing.
Although previous diplomatic discussions included conversations about maintaining access to critical minerals, progress has been limited. China’s latest action demonstrates that rare-earth exports remain a powerful strategic lever that can be deployed during periods of economic or political disagreement.
For U.S. policymakers, the message is clear: securing resilient supply chains for critical materials has become a national security priority rather than simply an economic objective.
Looking Ahead
China’s decision underscores a broader reality shaping the global economy. Control over critical minerals is increasingly becoming as important as control over energy resources was in previous decades.
As nations compete to secure supplies for electric vehicles, renewable energy, advanced computing, and defense systems, rare earths are likely to remain at the center of geopolitical negotiations and trade disputes.
For American manufacturers, the challenge now is accelerating efforts to develop alternative sources while navigating a market where China continues to hold overwhelming influence.
The outcome of this struggle may help determine not only the future of global trade but also which nations lead the next generation of technological innovation.
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In early June, the Chinese government quietly approved the creation of the Space Computing Industry Innovation Center, a major initiative designed to unite rocket and satellite manufacturers, semiconductor companies, and AI technology firms in building a space-based computing network. According to Beijing officials, the project aims to integrate the entire space-computing supply chain while accelerating the development of the satellite Internet of Things (IoT) ecosystem.
The announcement largely flew under the radar, but industry observers quickly noted its significance. Research firm SemiAnalysis pointed out on X that China unveiled the initiative roughly a week before Elon Musk revealed plans for his AI1 satellite, a spacecraft intended to run AI workloads directly in orbit.
The center is scheduled to officially launch later this month and will focus on six key areas of research: developing highly reliable, heat-resistant computing chips for space environments; building high-performance interconnected computing payloads; establishing standardized satellite computing platforms; training large AI models under severe power constraints; integrating space- and ground-based cloud networking systems; and creating service-oriented, tokenized business models for orbital computing resources.
Together, these efforts are aimed at creating an AI-powered data center in orbit—one that operates independently of terrestrial power grids and sidesteps many of the energy, land, and infrastructure constraints facing traditional data centers on Earth.
While Musk’s AI1 satellite has dominated headlines this week, China’s move suggests that the race toward space-based AI infrastructure is becoming increasingly competitive. However, it is worth noting that Musk’s ambitions in this area are not new. He has discussed the concept of orbital computing since late 2025 and, in February 2026, SpaceX filed plans with the FCC for a one-million-satellite Orbital Data Center System. Meanwhile, Jeff Bezos has entered the field as well, with Project Sunrise—a proposed constellation of 51,600 satellites operating in sun-synchronous orbit.
What distinguishes China’s approach is its emphasis on collaboration. Rather than relying on a single corporate entity, Beijing is coordinating multiple companies, research institutions, and industrial partners to jointly develop the underlying technologies required for space-based AI computing. By contrast, SpaceX and Blue Origin appear to be pursuing largely independent strategies. SpaceX, in particular, seems focused on vertical integration, supported by projects such as its massive Gigasat manufacturing facility and Musk’s ambitious TeraFab initiative.
Whether a centralized, state-coordinated ecosystem will outperform the resource-intensive efforts of a handful of private companies remains an open question. A collaborative model could distribute risk and make resulting technologies broadly accessible across Chinese industry, while private-sector approaches may benefit from faster execution and tighter integration.
What is clear, however, is that China is treating orbital computing infrastructure as a strategic priority. For a country that already possesses abundant electricity generation capacity and significant room for expanding terrestrial data centers, its willingness to invest heavily in space-based computing highlights the growing belief that the next frontier of AI infrastructure may extend far beyond Earth’s surface.
Shin-Etsu Chemical Co., one of Japan’s leading producers of rare earth magnets, is planning to construct a new rare earth refining facility in Japan as part of its strategy to strengthen supply chain resilience and reduce dependence on China.
The new refinery, which will be the company’s third facility in Fukui Prefecture in western Japan, is intended to enhance Shin-Etsu’s ability to maintain a stable supply of rare-earth products and permanent magnets. While the company has not disclosed the project’s capacity, schedule, or investment value, reports from the Nikkei indicate that the development will require an investment exceeding ¥35 billion (approximately US$218 million), with nearly half of the funding expected to come from government subsidies.
Rare earths have become increasingly important from both economic and geopolitical perspectives, as major economies seek to diversify supply sources and reduce China’s dominance in rare earth mining and processing. The issue is expected to feature prominently at the upcoming G7 summit in France.
Japan has also faced supply challenges following China’s suspension of exports of certain critical materials since early 2026, amid ongoing diplomatic tensions linked to comments made by Japanese Prime Minister Sanae Takaichi regarding Taiwan.
According to analysts at Citigroup, the Shin-Etsu project is considered strategically important from a national security standpoint. Shin-Etsu is one of Japan’s three major magnet manufacturers, alongside TDK Corp. and Proterial Ltd. In addition to its two existing facilities in Fukui, the company also operates a rare earth business in Vietnam.
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