China has introduced a new Mineral Resources Law, poised to fortify its stance against foreign restrictions that could possibly endanger its mineral security, as per expert insights. The groundbreaking law, which came into effect recently, marks a significant renovation of the nation’s mining regulations since the original law was set in place in 1986, according to Helen Amos, an analyst with BMO Capital Markets.

Yan Bo, an official from China’s Ministry of Natural Resources, stated that the law adds “provisions on import and export management and countermeasures against activities that may threaten China’s mineral resource security and related industrial and supply chain stability,” as reported by the Chinese state-run Global Times. However, Yan did not elucidate on what those countermeasures might be.

Further, he noted that the law refines a strategic mineral reserve system structured around products, capacity, and origin.

Reasserting China’s Supply Power

This fresh legislation signifies a stronger fortification of the structure surrounding critical metal supply chains that China controls. China has long been the leader in global supply and processing of these materials. This comes at a time when several Western governments, including those in the United States and Canada, have been shaping policies to establish supply chain autonomy from China. Noteworthy among these are the Critical Minerals Strategy rolled out by Ottawa and the Inflation Reduction Act brought forth by Washington, both in 2022.

The industry analysis website, Rare Earth Exchanges, suggested that while the Global Times did not directly refer to foreign governments, the new regulations could potentially serve as a foundation for Chinese countermeasures against foreign restrictions impacting mineral supply chains.

Geopolitical Influence through Mineral Supply

China is no stranger to using its strong mineral supply chain as a political bargaining chip in geopolitical conflicts. Japan has been at the receiving end of this strategy twice since 2010, with China imposing restrictions on rare earth exports to Japan due to disagreements over territorial matters and Taiwan issues.

The recently introduced legislation also endeavors to prioritize China’s mineral security on par with mineral development. Amos pointed out that the new law enables the state to identify and regularly update a list of “strategic minerals” based on their economic significance, scarcity, and dependence on imports. She also emphasized that the state now has the authority to directly manage mining and requisition resources during crises, with the Global Times not providing any specific details.

According to Rare Earth Exchanges, these regulations institutionalize a vertically integrated command structure for strategic minerals that is designed to withstand long periods of geopolitical competition. The message to the U.S. and Europe is clear: China is not merely defending its mineral advantage but is also embedding this advantage into its law.