The global debate surrounding critical minerals – and the geopolitical race to secure access to these materials – has thus far largely centered on a familiar group of resources. In recent years, rare earths, graphite, and lithium have arguably become synonymous with strategic competition as governments seek to diversify supply chains and reduce dependence on Chinese production.
However, this predominant focus on upstream mining risks overlooking a quieter but potentially more consequential source of geopolitical leverage. Today, strategic advantage puts a heavy emphasis on a state’s ability to control the industrial ecosystems that transform those minerals into indispensable technologies. A lesser-known example is the fluorine economy.
Although fluorite is often regarded as a relatively obscure industrial mineral, its strategic importance lies in the fluorine chemicals and compounds it derives. Fluorite is the primary precursor for many industrial compounds and chemicals, including fluorine and fluorine chemicals. As an indispensable raw material, fluorite is the bedrock of an extensive range of advanced applications, from metallurgical processing and electric vehicle batteries to aerospace engineering, nuclear energy production, and semiconductor manufacturing. Almost every high-tech industry crucial to economic and national security is underpinned by fluorine-derived materials.
With the world’s largest reserves, China is currently the top producer, accounting for around 69 percent of global fluorite production, with an estimated output amounting to 6 million metric tons in 2025. However, these figures capture only the upstream dimension of China’s competitive position.
Unlike many mineral-producing economies that primarily export raw ore, China has systematically expanded its downstream processing and manufacturing capacity. Chinese producers dominate multiple stages of the fluorine value chain, accounting for over 50 percent of global production of high-purity hydrofluoric acid, nitrogen trifluoride, fluoropolymers and numerous specialty fluorochemicals. This dominance in purification is where China gains its most strategic advantage – these downstream products require extremely high purity standards before they can be deployed in semiconductors, batteries or advanced manufacturing. As deposits are not limited to Chinese land, mastering the industrial capabilities to transform fluorite into technologically indispensable materials becomes what matters most.
The Potential for Economic Statecraft
Over the past decades, Beijing has quietly developed a vertically integrated fluorine economy while simultaneously constructing an increasingly comprehensive export control regime to govern its strategic assets, including fluorite. This architecture reflects a deeper ambition of China’s industrial policy: rather than simply relying on its natural advantages as an upstream miner with large critical mineral deposits, Beijing has consistently pursued the development of a highly interconnected and complete supply chain that would be extremely difficult for other countries to replicate. Once we consider fluorine’s downstream applications, the strategic significance of this ecosystem becomes more apparent.
The manufacturing of all advanced semiconductors requires hydrofluoric acid. During wafer fabrication, electronic-grade hydrofluoric acid is repeatedly used to remove silicon dioxide layers and etch microscopic circuit patterns onto silicon wafers. Companies such as TSMC, whose advanced chips underpin artificial intelligence, cloud computing and consumer electronics, depend on a continuous supply of ultra-high-purity process-fluorine chemicals alongside the more famous cutting-edge lithography equipment. In this sense, the semiconductor race is determined as much by access to advanced machinery as by access to the specialized chemical ecosystem that enables precision manufacturing.
Beyond semiconductors, fluorine chemicals are foundational to multiple sectors pivotal to national security. Uranium enrichment depends upon uranium hexafluoride, a fluorine compound. Fluoropolymers such as PTFE and PVDF are indispensable in aerospace engineering, chemical processing equipment, and advanced electronics because of their exceptional resistance to heat, corrosion and chemically aggressive environments. The combination of these applications and geographically concentrated productions gives fluorine characteristics typically associated with geopoliticized supply chains.
China’s dominance across the upstream and midstream segments of the fluorine value chain greatly cements its potential geopolitical leverage. Although governments are now investing heavily to build supply chain resilience, replicating China’s fluorine ecosystem remains a long-term challenge. The most obvious reason is that the world’s depends on China for more than just raw fluorite. It is a dependency on an entire industry chain spanning every stage, from fluorite mining and processing to the purification of fluorine-containing compounds.
Establishing new fluorite mines outside China does not automatically guarantee the production of high-purity hydrofluoric acid, semiconductor-grade fluorochemicals or advanced fluoropolymers. These capabilities require years of investment, specialized engineering expertise, stringent environmental compliance and integrated manufacturing networks.
The business consequences are equally significant. Manufacturers operating in semiconductors, electric vehicles, aerospace, and advanced materials increasingly face supply chain risks that cannot be understood simply by considering the source of raw minerals. Firms in need of fluorine-intensive inputs must now consider concentration risks across multiple stages of production, from upstream mining to specialized chemical processing. Corporate resilience strategies that focus exclusively on securing raw materials may therefore underestimate vulnerabilities embedded within downstream chemical supply chains.
China’s evolving export control regime further reinforces the strategic importance of these industrial capabilities. Since the implementation of the Export Control Law in 2020, Beijing has progressively institutionalized export controls through a legal framework governing dual-use technologies and strategic industrial inputs. The introduction of the unified Catalogue of Dual-Use Items through MOFCOM Announcement No. 51 in2024 marked a significant step towards a more systematic export control architecture. Fluorite continues to falls within China’s export licensing system, while selected fluorine-related products are governed through dual-use export control mechanisms.
These measures should not be interpreted as evidence that China is indeed actively politicizing fluorine supply chains. However, they clearly indicate that the legal and administrative infrastructure capable of governing strategically important fluorine-related exports is already well established. The distinction is important, as modern economic statecraft increasingly depends on the institutional capacity to regulate strategically significant technologies when geopolitical considerations arise.
What’s Next?
For much of the past decade, critical mineral policy has centered on securing access to raw materials. As the example of fluorine shows, this perspective is incomplete: strategic competition is shifting downstream toward chemical processing, advanced manufacturing capabilities, and integrated industrial systems. Countries seeking to reduce dependence on Chinese supply chains may therefore find that diversifying mineral production alone offers only limited resilience if downstream processing remains concentrated within a single industrial ecosystem.
Whether fluorine ultimately joins rare earths at the forefront of geopolitical competition remains uncertain. What is already clear, however, is that China has already established the institutional architecture through which strategically significant fluorine-related exports can be controlled. If China chooses to use its dominance in the fluorine value chain as geopolitical leverage, the rest of the world is likely to be unable to resist economic coercion. In the near term, there is simply no substitute for the Chinese fluorine ecosystem.
With the fluorine economy underpinning the most strategically significant industries, China’s comparative advantage in the trinity of upstream mining, fully developed and integrated industrial ecosystems, and export-regulatory regimes might become another trump card in its geopolitical playbook.