The Processing Problem No One Saw Coming

Fifteen percent of the world's coltan comes from mines controlled by Congolese rebels. They want to sell it to Washington.

The Rwanda-backed M23 rebel group, which controls large swaths of eastern Democratic Republic of Congo, is pitching itself to the Trump administration as a potential supplier of tantalum, tin and tungsten, The Economist reported this week . The mines have been under M23's control since April 2024, generating an estimated $800,000 a month in revenue, according to Global Witness . The proposal is audacious. It is also a symptom of how desperate the scramble for non-Chinese critical minerals has become.

The United States signed eleven new bilateral critical minerals frameworks in February with countries including Argentina, Ecuador, Guinea, Morocco, Paraguay, Peru, the Philippines, and Uzbekistan . U.S. federal commitments topped $30 billion into the February 2026 Critical Minerals Ministerial, including a $10 billion Export-Import Bank loan for Project Vault plus $2 billion in private capital . Australia is clearing lithium mines to double output. France is convening emergency G7 meetings. And yet, the bottleneck isn't where anyone expected.

Can You Mine Your Way Out of China's Grip?

Washington is putting more money behind critical minerals, but the West still lacks the processing capacity and private capital needed to cut its reliance on China, a May 19 panel heard . Abigail Hunter from policy group SAFE said there is an acute lack of investment-ready projects in the midstream supply chain, noting that "processors and smelters remain hard to finance without cheaper capital, government support and stronger downstream demand" .

The numbers are stark. China leads refining for 19 of 20 critical minerals analyzed, controlling 99% of gallium refining and more than 90% of graphite, manganese, and rare earth processing . China currently controls 80% of the global capacity to process critical minerals, including nearly 90% of rare earth elements . Finding a deposit is step one. Processing it without Chinese infrastructure is the genuinely difficult problem.

The U.S. Department of Energy announced $45.7 million for 19 projects on May 19 to fill domestic critical minerals supply chain gaps, supporting pilot-scale facilities for processing magnesium and rare earth elements . It sounds substantial until you realize the scale of what's needed. The strategic bottleneck has moved to midstream processing and qualified output , according to industry analysts. Critical mineral processing remains one of the most difficult gaps in the U.S. battery supply chain—mining projects can expand raw material availability, but domestic industrial resilience depends on refining, chemical conversion, recycling, and component manufacturing .

The problem is economic as much as technical. Albemarle's decision in February 2026 to idle the remaining operating Train 1 at its Kemerton lithium hydroxide processing plant in Western Australia illustrates the economic pressures facing ex-China hard-rock conversion operations . Even with government support, Western processors struggle to compete with Chinese cost structures.

What Happens When Rebels Control Your Supply Chain?

The Congo situation crystallizes the moral hazard embedded in critical minerals diplomacy. Eastern Congo is among the world's richest mineral regions, producing materials essential for electric vehicles, defense systems and electronics manufacturing, with the DRC supplying most of the world's cobalt and a significant portion of tantalum feedstock . Rubaya's mines produce around 15% of the world's coltan, which is widely used in smartphones, laptops and electric vehicles .

The U.S. signed a "strategic partnership" with the DRC in December and subsequently imposed sanctions on the army of Rwanda . Yet the rebels are hoping that Washington's push to secure non-Chinese sources of critical minerals could translate into political legitimacy and economic support . The calculation is simple: if you control the ore, you control the conversation.

Meanwhile, Australia is moving in the opposite direction. Mineral Resources Ltd. will restart its Bald Hill lithium mine in Western Australia after an 18-month hiatus, with crushing and mining operations to start in June and first production from July, Bloomberg reported . Australia's lithium output is expected to rebound in 2026, with production projected to grow by 6% to reach 120,300 tonnes . Prices are cooperating. Lithium carbonate pushed above $24,000 per tonne in January 2026, while lithium hydroxide crossed $23,000 per tonne—levels unseen since 2023 .

But production is only half the equation. French Finance Minister Roland Lescure said China had captured a huge share of the market through heavy investment and pricing policies that drove potential competitors out . China's concentration across mineral markets is significant enough that it can move pricing to levels that eliminate competing producers from commercial viability , Lescure noted during Paris talks in May.

Where Does the G7 Go From Here?

The Group of Seven countries are in talks to create a permanent secretariat to ensure initiatives to increase critical mineral supplies survive beyond the bloc's rotating presidencies, five sources told Reuters . The secretariat could be housed at the International Energy Agency or the OECD, both based in Paris . The proposal reflects a recognition that critical mineral supply chain transformation operates on decade-long capital cycles that are fundamentally incompatible with annual summit communiqués as the primary governance mechanism .

Finance ministers and central bank representatives from the G7 met in Paris on May 18, with the two-day meeting focused on the economic impact of the Middle East conflict and coordinating a position to reduce dependence on China for rare earths and critical mineral resources . German Finance Minister Lars Klingbeil warned fellow G7 powers that Western economies are running out of time to reduce their dangerous dependence on China for critical minerals and rare earth supplies .

The urgency is real. J.P. Morgan Global Research forecasts global demand for lithium to grow 16% year-over-year in 2026, with 58% of incremental demand coming from electric vehicles and 30% from energy storage systems . Increased demand, coupled with supply disruptions and reduced global inventories, is expected to keep the copper market tight in 2026 . Copper demand is projected to grow by 30% through 2040 in the IEA's Stated Policies Scenario .

What Changed This Week

The M23 overture to Washington crossed a line that had previously held: armed groups are now openly positioning themselves as strategic mineral suppliers to Western governments. The DOE's $45.7 million in processing grants, announced Monday, represents the latest attempt to build domestic capacity—but at a scale that remains orders of magnitude below what China has already built. And the G7's Paris meeting produced commitments to coordinate, but no binding timelines or capital allocations that would fundamentally alter the processing bottleneck. The gap between rhetoric and industrial capacity continues to widen.

What to Watch

The G7 leaders' summit in mid-June in the French spa town of Evian will test whether the permanent secretariat proposal gains traction. The Critical Minerals North America Conference convened 300+ attendees in April , but the real test will be whether those connections translate into funded projects by year-end. The DOE's Office of Critical Minerals and Energy Innovation issued a $500 million funding opportunity on March 15 for demonstration and commercial-scale facilities that process or recycle critical materials —applications are due in coming weeks. And in Congo, watch whether the U.S.-DRC strategic partnership signed in December holds, or whether M23's proposal finds traction in Washington's desperation for alternative supply.