CATL’s Mining Push Escalates China’s Critical Minerals Offensive

China’s battery giant is going vertical. CATL, the world’s largest battery manufacturer, announced a $4.4 billion investment to launch a dedicated mining subsidiary focused on securing critical mineral supplies. This move represents a significant escalation in Beijing’s strategy to dominate the global battery supply chain. 

This announcement comes just one week after China issued State Council Order No. 834, which promulgates new national regulations designed to prevent foreign companies from re-shoring their supply chains. Together, these developments signal Beijing’s ability to synchronize regulatory and commercial actions in a key economic battleground. With CATL already commanding roughly 37 percent of the global electric vehicle battery manufacturing market, its new venture focused on mining threatens to consolidate further control over the battery supply chain at a moment when electric vehicles are gaining popularity globally and Western nations are scrambling to reduce their dependence on Beijing.

CATL’s CCP Ties Amplify the Threat

CATL is not an ordinary company. The firm maintains close ties to the Chinese Communist Party (CCP), meaning that CATL’s expansion gives Beijing entry into sensitive U.S. power grids and data from American automobiles. With its battery manufacturing dominance, CATL’s entry into upstream mining with state backing will grant Beijing unparalleled leverage over the minerals essential to electric vehicles, grid storage, and defense applications. The CCP now has even more ability to control these markets by suppressing prices through unfair trading practices, making alternative long-term investments unbankable.

Global Instability Will Accelerate Battery Demand

China has invested decades and hundreds of billions of dollars on becoming a altervative energy manufacturing powerhouse. Global oil supply disruptions related to the Iran war may validate that investment. In particular,  high oil prices could drive long-term global demand for energy storage solutions, especially utility-scale batteries for grid resilience, as well as electric vehicles, especially in Asia. CATL’s vertical integration positions the company — and, by extension, Beijing — to capture this growing demand while boxing out competitors through its control of upstream minerals.

U.S. Efforts To Secure the Critical Minerals Supply Chain Remain Insufficient

Washington is responding. Efforts like Project Vault and the Trump administration’s support for MP Materials,  a U.S.-based critical minerals producer. , are novel uses of economic statecraft. The Pentagon recently launched an Economic Defense Unit and is forging partnerships with private equity and venture capital to channel capital toward critical mineral projects. The U.S. Development Finance Corporation and the U.S. Export-Import Bank have also drastically increased their focus on critical minerals.

However, these efforts, while necessary, remain modest compared to China’s head start. The extraction and processing of the key battery minerals — lithium, cobalt, nickel, copper, manganese, and graphite — are mainly under Chinese control. Graphite is a particular bottleneck, with China processing more than 95 percent of the world’s battery-grade graphite.

Closing the Gap

The Commerce Department and the Office of the U.S. Trade Representative should employ aggressive tariffs, anti-dumping measures, and countervailing duties to protect U.S. markets and prevent Beijing from reaping the benefits of massive state subsidies that artificially suppress battery prices. Many of these actions are underway, such as the administration’s anti-dumping tariff on Chinese graphite. Without consistent and predictable trade enforcement, new Western investments will fail before the feasibility phase — falling victim to China’s price manipulations.

The administration should also strengthen EXIM and DFC by endowing them with greater resources and more flexible authority to assume risk, so they can support the necessary processing and mining capabilities in allied countries. While Congress recently increased the scope of DFC’s authorities, it also needs to plus up its appropriation. EXIM operates under default caps, which limit its losses to 3 percent across the bank’s portfolio. Critical mineral projects are inherently risky, and EXIM needs to be able to take bigger risks.

Finally, linking U.S. companies with more and targeted private capital is essential to breaking China’s chokehold across numerous critical supply chains. The United States has the world’s deepest capital markets. U.S. commercial diplomacy and coordination must move faster to leverage that advantage for American innovators and manufacturers. We have no time to waste. 

Elaine Dezenski is the senior director and head of the Center on Economic and Financial Power (CEFP) at the Foundation for Defense of Democracies (FDD). Daniel Swift is a senior research analyst at FDD and a retired U.S. diplomat. For more analysis from the authors and FDD, please subscribe HERE. Follow FDD on X @FDD. Follow Elaine on X @ElaineDezenski. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.