More than a century has passed with oil companies trying to develop a huge industrial network of mining, refining and distribution of their products around the world. OR China has managed to have almost monopolistic power in the field of so -called critical mineral – Raw materials necessary for technologies such as electric vehicles, solar panels and magnets used in wind turbines.
In order for other states to compete with China’s sovereignty in these pure technologies, they will have to cover lost ground quickly. The race has become more urgent now that China is limiting the exports of several critical minerals – especially the rare earth’s metals used in defense and energy industries – in response to the escalating trade war of US President Donald Trump.
As Trump seeks to make America less dependent on foreign imports, he has laid the groundwork for possible duties in critical minerals. In mid -April, he signed an executive decree that ordered the Minister of Commerce Howard Lutnik to launch an investigation to determine whether the US dependence on imports is a threat to national security.
What are critical minerals?
States have long been seeking to secure supplies of materials that consider vital to their industrial and military skills. About 50 metallic elements and minerals meet these criteria in the US and European Union, including lithiumhis tonerhis cobalthis manganese and rare earths – elements with unique chemical behavior that make them essential for the manufacture of certain electrical, electronic, magnetic and visual products.
Most critical minerals were chosen because of their role in the construction of infrastructure needed to reduce carbon dioxide emissions responsible for climate change – a mission supported by hundreds of billions of dollars in subsidies and tax exemptions. Some of the minerals are also used in semiconductors for political and military communications.
Why is the supply of critical minerals a challenge?
While many critical minerals can be found in raw state in large quantities worldwide, their mining and refinement in useful form can be technically complex, energy -efficient and polluting. China has dominated in the value chain for many of these products. Even in the case of the most abundant metals, such as copper, the massive increase in demand means that there may not be enough for everyone. In 2023, the EU first categorized copper and nickel as critical raw materialsalthough there are many places where they can be found.
Why is China’s dependence on critical minerals is a problem for western states?
Manufacturers are trying to avoid excessive dependence on the supplies of any individual country, because it leaves them exposed when the industrial production of this nation is interrupted by things such as lack of energy, epidemics or social upheavals.
With China, there is also a tense relationship with the US that needs to be taken into account, especially now that long -term tensions are evolving under Trump into a deeper trade war that includes punitive duties and stricter export restrictions.
China prohibited anti -US, Galli and German exports in December in Decemberciting concerns about national security, after Washington limited China’s access to some sensitive technologies. This move is likely to increased costs for some American manufacturers of electronic and optical equipment. Beijing also raised stricter terms for toner sales, ingredients in electric vehicle batteries.
In response to Trump’s duties, China added checks to the exports of tungsten, Vismite and other specialized metals used in electronics, aviation and defense in early February, sending the prices of some of these products. In April, China added seven rare land to the export control list.
How did China acquire such a dominant position in critical minerals?
As early as 1992, Chinese leader Deng Siaoping has underlined his country’s capabilities to lead worldwide in critical minerals, saying: “The Middle East has oil. China has rare land” As its economic growth accelerated, the demand for industrial goods began to far exceed local stocks. China responded with large investments in mining assets abroad and has gradually dominated the refining and processing of many industrial raw materials, as well as a number of by -products.
As China intervened, Western companies have withdrawn, willing to outsource production to third parties. Today, China is the leading producer of 20 critical raw materialsas measured on the basis of its share of global exiled or refined production. In the case of the element of rare earths Inaccessible, used in lighting and lasers, China is responsible for 84% of the offering and 100% of refined productionaccording to EU analysis.
Are also the largest producer of refined cobalt and nickel forms And Chinese companies have invested significantly in cobalt and nickel mines in countries such as Congo and Indonesia.
What do China’s economic opponents do about it?
The law on reducing inflation signed by law by President Joe Biden in 2022 was intended to help the US achieve their climate goals through investments that create jobs in renewable energy and electric cars, and to facilitate unreliable or unreliable dependence.
While Trump has underestimated Biden’s policies for the climate and ordered federal services to stop the disbursement of IRA funds, complete abolition of legislation seems unlikely. Republican MPs whose regions and states benefit from the investments promoted by IRA, have pressured the president to maintain its provisions.
In March, Trump went a step further in Biden’s attempt to reduce US dependence on minerals on China, citing emergency powers to strengthen domestic production and processing of these materials. Subsequently, in April, a investigation into the critical chain of mineral supply in April, ordered the Minister of Commerce to determine whether duties should be applied to imports. According to the White House, The US is “100% dependent on imports” for at least 15 critical minerals and 70% of rare land missions come from China.
In the EU, the law on critical raw materials aims to facilitate the financing and licensing of new mining and refining projects within it and to achieve trade alliances to reduce the union dependence on Chinese suppliers. The EU is also promoting a net industrial agreement that includes a mechanism that will allow the companies in the area to gather their demand for critical materials.
China’s opponents are trying to conclude supply agreements and investment partnerships with nations that produce critical minerals. However, China’s established position in many of these countries gives it an early advantage. For example, more than half of the cobalt mines in the Congo People’s Republic are owned or controlled by Chinese companies. China consolidates its relations with the African nations that are to be among the largest metal producers in the world until the end of the decade.