Royal United Services Institute’s Post

As the EU scrambles to reduce its dependency on China for the supply of mineral raw materials, China is becoming increasingly secretive about its long-term strategies and plans for the sector. I explore the implications of this development in a new commentary: https://lnkd.in/dYzkNcRT

China's increasingly less transparent mineral policy poses significant challenges for the EU. In a new Commentary, Patrik Stig Andersson examines the growing secrecy around the sector and its implications for Europe. As the EU strives to reduce dependence on China for the supply of materials and products critical to the green transition, reduced transparency reinforces the information asymmetry between China and the EU and complicates the EU's efforts to understand and respond to China's long-term strategies. China's growing reluctance to make public information about the country's long-term mineral policy and industrial policy in general is likely based on a concern that China's strategy could lead to criticism from the West and that the information in the plans could be used to weaken China's competitive advantage. This trend is likely to continue for the foreseeable future and the EU should therefore strengthen its risk mitigation strategies to mitigate potential supply chain vulnerabilities. The full publication can be accessed here:  https://lnkd.in/dz_d_jt4 

China is facing an 'elemental struggle' on critical minerals, state media warned. An editorial published by China Daily, a prominent state-run newspaper, has outlined growing apprehension within China's leadership regarding its reliance on foreign sources for critical minerals essential to advancing clean energy technologies. Written by Wang Yongzhong, a researcher at the Institute of World Economics and Politics at the prominent Chinese Academy of Social Sciences, the paper points to the escalating costs of importing critical minerals, linking this to policies enacted by resource-rich countries. Read the full story here: https://lnkd.in/eQAxAh9S #China #Minerals #Policy #Regulation #Costs

The White House is moving forward with a Memorandum of Understanding (MoU) with the Norwegian Ministry of Trade and Industry regarding US-Norwegian strategic cooperation on the creation of new critical mineral supply chains. While not explicitly stated, the emphasis on higher labor and environmental standards as well as responding to "non-market policies and practices in third countries" signals an intention to build mineral markets independent of the PRC. Norway is well-placed to contribute. In 2023 Norge Mining announced it had discovered 70 billion tons of phosphate in the southwest of the country. Phosphate is vital for global food production and estimates suggest that these new deposits could also supply global demand for green technology components for up to 50 years. David Johnson Paul R. Orszag Kenneth T. Davis, PhD 🌎 Marisol M. Manuel Carmona Yebra Jørgen Nyberget https://lnkd.in/e-PPAP5t

https://lnkd.in/d-4_EMza Critical Raw Materials, Economic Statecraft and Europe’s Dependence on China John Seaman 07 Aug 2024 The People’s Republic of China (PRC) holds a dominant position along wide swaths of critical mineral and technology value chains that are necessary for achieving Europe’s decarbonisation policy goals. Many fear that the PRC will pursue increasingly coercive measures to leverage its supply chain advantage in pursuit of broader geopolitical objectives. Examining three mineral groups in which Beijing has enhanced supply chain restrictions in 2023, namely rare earth elements, gallium and graphite, highlights that the PRC’s priority has long been the pursuit of economic and industrial policy goals rather than a broader diplomatic agenda, though this could change. Arguably, leveraging raw materials is ultimately a weak form of economic statecraft, eliciting effective diversification strategies that in turn weaken a supplier state’s sources of leverage. Europe’s response, while slow to emerge, has been a strategy to reinvest in its own mineral extraction, refining and recycling capacities, on the one hand, and diversify global supply chains by expanding its strategic partnerships, on the other.

Interesting read on the rising focus on Critical Minerals in Global Trade. Daniel Worrall

Aug 7 - Join the Perth USAsia Centre's next business briefing with Dr Benjamin Herscovitch 郝杰明 and Dr Darren Lim from The Australian National University. While the Australian Government has sought to stabilise the relationship with China, critical minerals are a sensitive topic. Australia – and Western Australia especially – accounts for huge global supplies of these minerals, but China dominates global processing. The scale and scope of its monopoly on this vital sector presents significant economic and security challenges for Australia and partners across the Indo-Pacific. How can Australia navigate its relationship with China on this sensitive, strategically important issue? What are the security imperatives driving Australia’s approach to Chinese investments in critical minerals? How will it affect Australian industry? And how will US-China competition affect Australia’s ambitions to become a critical minerals hub and green energy superpower? Join two of Australia’s leading China analysts, Dr Herscovitch and Dr Lim, to unpick these complex questions at a special industry briefing and Q&A in Perth on August 7th. If you're available to join us in Perth for this event, please get in touch via [email protected] This event is delivered in partnership with the The Chamber of Minerals and Energy of Western Australia, with support from the National Foundation for Australia-China Relations (NFACR) 澳中基金会-

Australia has a central role to play in derisking global supplies of critical minerals, both raw and processed. In this piece for the Australian Institute of International Affairs I argue that two main geoeconomic strategies to break China-dependency have emerged from two of the world’s largest trade blocks, the EU and US, namely “de-risking” and “decoupling” strategies. Each has different implications for Australia’s domestic policy settings, and for domestic mining firms’ investment strategies. Peter Draper Prudence Gordon Mikael Wigell Dr. Jens Hillebrand Pohl #economicsecurity #geoeconomics #criticalminerals https://lnkd.in/g5SCKHih

In IndustryWeek, Lyle Trytten and I argue that China’s threat to ban critical minerals exports is not a bluff, and such bans could create mineral shortages in the United States. https://lnkd.in/eVVcgatk Point 1: China has previously implemented export restrictions and bans as evidenced by export controls on gallium, germanium, and graphite over the past year and an export ban on rare earth exports to Japan in 2010. Point 2: China could benefit from imposing mineral export bans. Export bans on select minerals would demonstrate that China can retaliate against US efforts to curb technology exports to China—and possibly deter the US from further restrictions, enabling China to stock up on US technology. Point 3: Chinese mineral producers could likely find alternative customers to the United States. China is often the largest consumer of its own critical minerals. In fact, China’s demand for many critical minerals is so high that it relies on imports to meet large portions of its consumption. Point 4: China dominates the production of many critical minerals. China in 2022 was the leading producer for 30 of the 50 minerals on the US critical minerals list, and it had a majority share in global production for many of these minerals. Point 5: The United States and its partner countries likely cannot quickly produce enough minerals to fully replace imports from China. Many mineral producers have already committed large portions of their production to customers for several years, and expanding production capacity takes years. Point 6: The United States would struggle to incentivize enough mineral production in resource-rich regions outside China like Africa. The US government could financially support mineral projects there, but money may not convince firms to build projects given investment risks like royalty disputes. To mitigate the risks of potential Chinese export bans in the short term, the US government should increase its mineral stockpiling and offer low-cost financing to US companies to secure long-term offtake mineral agreements with trusted producers in the US and partner countries. To mitigate the risks of potential Chinese export bans in the long term, the US government should increase funding for mineral exploration and mine development. DOD’s DPA Title III can support mineral exploration, and DOE’s Title 17 Clean Energy Financing Program can support mine development.

Very smart take on China's clear strategy and intent to build up controlling stake in certain critical minerals like nickel and gallium and then leverage that control for its geopolitical and security goals. As Gregory Wischer and Lyle Trytten so ably point out, China is showing its cards here -- the question is will we take the hint and prepare accordingly?