China’s growing control of global minerals supply leaves the US in the dust
- With Washington distracted by political crisis at home, Beijing has steadily invested in the inevitable shift away from fossil fuels towards green energy
- China’s control of key minerals such as lithium and cobalt leaves the world with little option but to depend on it for at least the medium term
Minerals such as lithium, cobalt and nickel are integral to the construction of batteries, while rare earth elements such as neodymium are crucial to wind turbines and electric vehicles. As electricity replaces fossil fuels, copper and aluminium will take centre stage as well.
As a result, if the world is to meet its goal of keeping the rise in global temperatures to “well below 2 degrees Celsius”, as pledged in the Paris Agreement, the International Energy Agency estimates that demand for these minerals will increase hugely: for lithium, by as much as 40 times, while the market for graphite, cobalt and nickel will shoot up by around 20-25 times.
China is already investing towards this paradigm shift, particularly in parts of the world where the US is now at a disadvantage. While former US president Donald Trump spent his term in office trying to revive the domestic coal industry, China was busy building ties with power brokers that controlled strategic mineral reserves around the world.
Early in November, representatives from five Chinese mining companies arrived in Afghanistan to conduct “on-site inspections of potential lithium projects”. At least 20 Chinese state-owned and private companies have also made similar inquiries, according to the Global Times.
Similarly, in Africa – home to some of the world’s biggest mineral reserves – China has inserted itself into diplomatic vacuums and quietly built ties with regimes that have been at loggerheads with the West for years.
Take the Democratic Republic of the Congo, for example. A staggering 70 per cent of the world’s cobalt is mined in the country. As of last year, Chinese companies owned or financed 15 of the 19 cobalt mines there, according to a New York Times report.
Under the former Congolese president, Joseph Kabila, Beijing built a productive relationship which expanded that influence. Before he left office in 2019, Kabila’s tyrannical rule saw violent civil strife, disputed elections, and troubled relations with the West after he refused to step down following the expiry of his term in 2016.
Such manoeuvres have now given China outsize influence in the refining and processing of the next generation of fuels. According to the International Energy Agency, China processes 50-70 per cent of the world’s lithium and cobalt, and as much as 90 per cent of its rare earth metals. China is also the largest processor of copper and nickel, with shares of 40 per cent and 35 per cent respectively.
China’s influence isn’t simply restricted to war-torn, fragile states that are at odds with the West; it has made significant investments in countries that are allies of the West, too. Over half of the world’s lithium, for instance, is produced in Australia. But 58 per cent of it is processed by China, according to IEA data.
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China’s clout in these markets will prove to be a significant bargaining chip in the years ahead, especially as the West looks to move towards net-zero carbon emissions by 2050.
In its foreign policy speeches, the Biden administration has emphasised its desire to build America’s capabilities and compete with China. The market for future energy sources is one area where American diplomacy will have to work overtime.
Mohamed Zeeshan is a foreign affairs columnist and the author of Flying Blind: India’s Quest for Global leadership