China’s dependence on imports of strategic metals means that global commodity price cycles directly affect Chinese industrial costs. But as China is the largest buyer of these metals, its fluctuating levels of imports create global price shocks that affect industrial supply chains worldwide.

To mitigate risk, China stockpiles resources, purchases equity stakes and long-term contracts abroad and invests in overseas mining rights and infrastructure to secure supply chains. China still relies on only a few countries for supplies of key metals, such as iron ore (Australia), copper (Chile, Peru) and cobalt (D.R.C.), and this concentration of supply can create geopolitical complications.

Overall, China is locked in intensified resource competition with the U.S., EU, Japan and India for critical metals and minerals. China’s import dependency remains a massive opportunity for global mining firms, with China ensuring reliable long-term demand, regardless of global cycles.

This opportunity is not without challenges, however, as China’s demand is still subject to demand cycles, policy swings and geopolitics. To navigate these challenges, global mining firms must be strategic, leverage the right information and partners, diversify their customer base and develop flexible operating models. Agile end-to-end supply chain management is also crucial.