This Chinese miner dominates global cobalt supply. The US is crying foul.

U.S. officials are accusing China-based CMOC Group of flooding the market to make it harder for others to invest in producing cobalt, which is used in jet fighters, munitions, drones and electric-vehicle batteries.

“The players are new, but the playbook is old," said Jose Fernandez, a State Department undersecretary in charge of international energy policy. “That predatory conduct is hurting not only the competition," but it is also jeopardizing America’s energy transition, he said.

CMOC says its higher production is a byproduct of higher copper output—the metals are mined together—and it is acting responsibly.

The sudden rise of an obscure company to a position of dominance in the mining industry is a study in how Chinese companies are spreading around the globe, often to feed the country’s manufacturing machine.

CMOC’s story is linked to China’s leading position in electric vehicles and EV batteries. Cobalt, used for centuries to make brilliant blues in paint and pottery, has found a modern role in EV batteries because its high energy density helps EVs travel farther on a single charge.

The world’s largest EV battery maker, China’s CATL, holds nearly a quarter of CMOC through a subsidiary. CATL has two representatives on CMOC’s board.

CMOC jump-started its growth with two big purchases in the Democratic Republic of Congo from Phoenix-based Freeport-McMoRan. The first was in 2016 for $2.65 billion, followed by another $550 million deal four years later.

Freeport’s longtime chief executive and current chairman, Richard Adkerson, said after signing the first deal that it “breaks my heart to do it." The U.S. company said it needed to reduce debt during an industry slump, and once that deal happened, holding on to the undeveloped second property didn’t make sense.

The Chinese buyer had a longer vision. CMOC’s then-chairman, Li Chaochun, said he invoked the opening lines of Charles Dickens’s “A Tale of Two Cities" when addressing his board about the 2016 deal, telling them that while it seemed like the worst of times for mining, the deal could bring a spring of hope.

CMOC said it brought the second mine, near the Congolese village of Kisanfu, into production in record time relative to its size, catapulting the company past Switzerland-based Glencore to become No. 1 in cobalt mining.

CMOC produced nearly as much cobalt in the first half of this year as it did all last year. It is expected to produce roughly 92,000 metric tons of cobalt in Congo in 2024, or 38% of global mine supply, according to Benchmark Mineral Intelligence.

With supply surging, cobalt prices are plumbing eight-year lows.

A buyer’s market

Western officials say CMOC’s decision to keep ramping up cobalt sales, instead of holding back more in stockpiles, is stymieing investment by others.

In a remote part of Idaho, an Australian company called Jervois Global pays around $1 million a month to take care of an idled mine that would be the only cobalt-focused mine in the U.S. It also has a mothballed cobalt refinery in Brazil.

Chief Executive Bryce Crocker said Jervois’s cobalt in Idaho couldn’t be mined profitably. The Kisanfu mine, now the world’s largest for cobalt, “is obviously an enormous step-change in supply, which is taking time for the market to absorb," he said.

A CMOC representative said stockpiling cobalt was costly and inefficient. “Cobalt is, and will continue to be, a buyer’s market, and there is no strategic or commercial advantage in holding a dominant position," the representative said.

The representative also rejected the notion that CMOC was trying to corner a key metal for batteries, observing that cobalt-free chemistries accounted for a rising portion of EV batteries.

“U.S. officials’ understanding of cobalt remains stuck in the early days of battery development," the representative said. Still, analysts said batteries using cobalt remained important for Western carmakers.

China’s decision last year to restrict the export of gallium, germanium and graphite—minerals needed for high-performance chips and batteries—was a reminder of its hold over the world’s mineral resources and power to disrupt the West.

The U.S. and allies including Canada, the U.K. and Australia have established a partnership to shore up supplies of critical minerals such as cobalt. Vice President Kamala Harris has proposed building a national stockpile of critical minerals, seizing on an idea that has been discussed by Washington lawmakers on both sides of the aisle.

“Ultimately, if the U.S. wants to have a stable source of domestic supply in the face of overwhelming market dominance from a geopolitical competitor, then it is going to have to intervene in some way, shape or form," said Crocker of Jervois Global.

China’s miners tend to be speedy on deals, helped by loans from state-backed banks, while Western companies may struggle to get funding for mines, especially in places plagued by corruption or political instability, say industry and government officials.

“We don’t have state champions, and we can’t just tell our companies where and how to invest," said Fernandez, the State Department undersecretary.

Rise of CMOC

CMOC started life in 1969 as the state-run owner of an operation that processed molybdenum, which is used to make steel stronger and less likely to rust. A Shanghai-based private-equity firm, Cathay Fortune, took a leading stake in 2004 for the equivalent of less than $30 million.

Now CMOC is valued at more than $20 billion with operations across the globe and 63-year-old Yu Yong, who controls Cathay Fortune has made it into the top 200 on the Forbes global billionaire list.

CMOC’s first-half copper output doubled year over year, and the company has said it aims to rank among the world’s top 10 copper producers this year. China has only a sliver of the world’s copper reserves, and the metal is expected to be in high demand because it is used in electric vehicles and data centers needed for artificial intelligence.

Sun Ruiwen, CMOC’s chief executive, has said his company’s fate is linked to China’s national ambitions.

“At all critical junctures, the endorsement by the state, as well as the instructions and guidance from relevant national departments, have played a crucial role" in CMOC’s global expansion, Sun said in a speech cited on a Chinese government website last year.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com and Yang Jie at jie.yang@wsj.com