This week, eY-Parthenon frames a $23.6 trillion investment gap spanning infrastructure, manufacturing, research, and supply chains currently anchored in China
Decision Focus
EY-Parthenon published findings on July 14, 2026, quantifying the investment required for the US, UK, and Europe to reduce structural reliance on Chinese critical industries at approximately $550 billion annually across 25 years. The operational signal is more specific than the headline figure. The International Energy Agency projects China will supply over 60% of refined lithium and cobalt and around 80% of battery-grade graphite and rare earth elements by 2035. For Mining Operations Directors running active fleet electrification programs or sourcing rare earth-dependent automation equipment, that processing dependency is already a procurement reality, not a future policy concern.
90-Second Brief
This week, eY-Parthenon frames a $23.6 trillion investment gap spanning infrastructure, manufacturing, research, and supply chains currently anchored in China. China has moved operationally: it imposed export licensing restrictions on gallium and germanium in mid-2023, then extended export controls to rare earths in 2025 following US tariff action. Western governments have responded with policy instruments, the US Project Vault, the EU Critical Raw Materials Act, and direct government-backed project financing, but the processing infrastructure lag is measured in decades. Near-term supply alternatives for battery-grade materials and rare earth elements remain structurally limited.
What Is Really Happening?
China controls over 80% of global gallium and germanium supply and holds comparable dominance across battery-grade graphite, rare earth refining, and cobalt processing. These are not abstract mineral statistics. They are the input chains feeding modern mining equipment: electric drive systems, battery modules for underground BEV fleets, proximity detection sensors, and the rare earth permanent magnets embedded in autonomous haulage systems.
China’s mid-2023 gallium and germanium export licensing, expanded to rare earths in 2025, converts processing dominance into an active supply risk. That 2025 escalation arrived with short warning time, triggered by tariff action rather than a slow-moving regulatory process. The sequence matters operationally: the next restriction may carry a similarly compressed lead time between geopolitical trigger and procurement impact.
Western governments are committing capital to close the gap. In the US, Graphite One has received $37.5 million from the Department of Defense and letters of interest for up to $2.07 billion in Export-Import Bank loans for the Graphite Creek project in Alaska — described by the USGS as one of the largest known graphite deposits in the country, with proven and probable reserves upgraded to 317% of the original prefeasibility estimate. In Canada, Scandium Canada secured a C$6.91 million federal contribution under Natural Resources Canada’s Global Partnerships Initiative to advance its Crater Lake scandium project in Québec. These are government intent signals. The Graphite Creek project carries a 20-year mine life horizon, which reflects the realistic development timeline, not a near-term supply solution.
Why It Matters for Mining Operations Directors
The direct exposure sits at the intersection of fleet strategy and equipment procurement. Operations committing to battery-electric vehicle transitions — underground loaders, haul trucks, surface light vehicles — are building forward demand for lithium, cobalt, and graphite into their total cost of ownership models. That demand now runs through a supply base where the dominant processor holds active export controls and has demonstrated willingness to use them as a geopolitical instrument.
The equipment OEM layer absorbs some of this risk — Caterpillar, Komatsu, Sandvik, and Epiroc source battery systems and drivetrain components upstream. But processing-level supply constraints propagate into component lead times and pricing, and those pressures reach the mine-site budget. Operations 12 to 18 months into fleet electrification planning cycles may already be carrying component availability assumptions that deserve a stress test against a sustained restriction scenario.
Rare earth exposure is a second, distinct channel. Automation equipment — from proximity detection to autonomous haulage — relies on rare earth permanent magnets and gallium-based semiconductors. Directors overseeing semi-autonomous or fully autonomous equipment deployments should verify with OEM suppliers what the forward component availability picture looks like if China tightens restrictions further rather than holds them steady.
Forward View
Three fronts are worth tracking. First, whether China’s export controls evolve from documentation requirements into processing licenses — a tighter form that would restrict the grade and form in which materials can leave the country, not just the quantity. Second, whether government-backed critical mineral projects convert from feasibility milestones into construction decisions; the DoD-backed Graphite Creek project is the most visible US graphite anchor, and its financing conversion timeline will signal whether sovereign investment intent is executable at production scale. Third, whether major mining OEMs begin formalizing alternative battery and drivetrain supply agreements outside the Chinese processing chain — a signal that the industry is pricing in sustained restrictions rather than treating them as a temporary geopolitical episode.
What Is Still Uncertain
The $23.6 trillion aggregate spans infrastructure, technology, and manufacturing well beyond mining’s direct input chains. How much of that investment flows into critical mineral processing specifically — and on what timeline — is not broken down in the EY-Parthenon analysis as reported. Junior explorers represent the early stage of Western supply chain construction: Rapid Critical Metals is launching an initial 2,000 to 3,000 metre drill program at its Prophet River gallium-germanium project in British Columbia, which is resource definition work, not near-term producing supply. Whether government-backed feasibility projects convert to operating mines within a timeframe relevant to current fleet electrification decisions remains the central open question. It is also unresolved whether mining OEMs will vertically integrate around Western-processed battery inputs or continue absorbing geopolitical risk through procurement, passing exposure downstream to mine-site cost structures.
One Question for Your Team
Which capital commitments in fleet electrification, automation, or fixed plant upgrades planned over the next three years carry embedded exposure to Chinese-processed battery materials or rare earth components — and have we stress-tested the OEM supply commitments behind those projects against a scenario where export restrictions tighten without the 12-month warning we did not get in 2025?
Sources
- Com — EY warns of $34 trillion investment gap to build Western supply chains (Link)
