China's 94% Magnet Grip and Tungsten Squeeze Redraw the Critical-Minerals Map

Investment Implications

China Controls 94% of the Magnets. It's Squeezing Tungsten. The Capital Is Moving to Friendlier Ground.

With China holding 94% of the world's sintered permanent magnets and tightening exports of tungsten and four other critical minerals, a US consortium has gone straight to the source — taking a 70% stake in a Kazakh tungsten mine to diversify supply. As critical-mineral sourcing gets repriced on security logic rather than price, the flow of capital toward mining and refining assets outside China is coming into sharper focus.

The fact that China controls 94% of the world's sintered permanent-magnet output is back at the center of the trade debate. In the same vein, China tightened export controls on five critical minerals including tungsten and cut mining quotas in early 2025, in retaliation for US tariffs. Permanent magnets and tungsten are inputs you can't skip in electric motors, defense equipment, and semiconductor processes — so the fact that one country holds nearly the entire supply started reading less as a price problem and more as a security one.

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The response is already showing up as capital movement. A US consortium has agreed to a structure that gives it a 70% stake in a Kazakh tungsten-mine development deal, with the Kazakh government holding 30% — laying down a sourcing line that bypasses China entirely. The frame of trade itself is shifting, too: South-South trade among emerging economies has grown to roughly 35% of all global commerce, overtaking trade among advanced economies, and about 20% of the world's goods imports now fall under tariffs or equivalent measures. That's up sharply from 12.6% a year ago.

Put it together, and this is a moment when the math of critical-mineral sourcing crosses over from price to security. The mining and refining capacity clustered in China is a risk the market has long known about; the assets that build an alternative — mines and refineries outside China — are being repriced against a new yardstick of supply security.

How this concentration unwinds splits the payoffs three ways, and the spread isn't symmetric. Security logic, once it sets, takes a long time to unwind; a thaw, by contrast, erases the diversification premium in one stroke.

If weaponization hardens — should China widen its export-control list on top of the 94% magnet grip, mining and refining assets outside China pick up a scarcity premium and get structurally re-rated. The flip side is that the buyers of magnets and tungsten — EVs, defense, semiconductor equipment — see cost pressure pile up bit by bit.
If workaround sourcing takes hold — as deals like the Kazakh tungsten arrangement, where the US takes a 70% stake, keep coming and supply outside China fills in steadily, returns on the diversification side turn modest but durable, and part of the discount priced into Chinese mineral names comes back.
If tensions ease — should the US-China trade conflict cool and export controls loosen, the premium that ran ahead on diversification hopes bleeds off quickly, and the capital sunk into workaround sourcing takes longer to recoup.

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