Fact Check
A mineral marvel
As one of the major suppliers of mineral resources to many dveloped countries in the world, China ensured a consistent supply in spite of the trade war
By Lan Xinzhen  ·  2024-03-18  ·   Source: NO.12 MARCH 21, 2024

After launching a trade war on China in 2018, the U.S. has expanded its efforts to contain China beyond the economic realm and into hi-tech sectors under the guise of "competition." This strategy has extended to the foundation of technological products: critical mineral resources. As major countries vie for access to these vital materials, this approach in recent years has intensified the global scramble for said resources.

Countries create customized lists of critical minerals by evaluating the significance of specific minerals to their economies. Major economies such as the U.S., the EU and the UK have released their respective compilations of critical minerals in recent years.

The 2018 Final List of Critical Materials published by the U.S. Department of the Interior identified 35 minerals considered crucial for the country's economic and national security. They included lithium, cobalt and rare earth elements. These minerals are widely used in industries such as communications, aerospace and new-energy batteries.

The number of critical minerals on the EU's list has increased from 14 to 27 over the past few years. Meanwhile, the UK's list is the most extensive, encompassing 41 vital minerals. The critical minerals identified by these economies feature significant overlap, resulting in a combined list of 50 essential minerals across these regions.

This high degree of overlap indicates an extensive consensus among these developed economies regarding strategic emerging industries and the advancements in hi-tech sectors characteristic of the present-day industrial revolution. However, these regions can only meet a fraction of their demand from their domestic resources.

Based on research conducted by China's Ministry of Natural Resources and the China Geological Survey, a significant proportion of the critical minerals identified by the U.S., the EU and the UK originate from China.

China is the primary supplier of 13 out of the 35 vital minerals outlined by the U.S. It is also the leading producer of 19 of these critical minerals. These numbers underscore China's status in the market as well as the challenges the U.S. faces in diversifying its sources of mineral imports away from the country.

The EU and the UK feature a similar scenario. Out of the UK's 41 critical minerals, 23 are sourced from China. This trend is mirrored in the EU, where China stands out as the biggest provider of 21 key minerals.

China is not only a major supplier of critical minerals, but also a key component in the global supply chain. Take rare earth elements, for example. As early as 2010, China's exports of rare earth elements already comprised over 90 percent of the global market. These elements are essential in the production of various hi-tech devices, including chips.

The U.S. Department of Commerce has been imposing export controls on certain chip technologies to prevent their transfer to China for several years now. In response to these restrictions, there were voices in China calling for the country to impose export restrictions on rare earth elements to the U.S. Nevertheless, to maintain global economic stability and technological advancement, China has opted to ensure a consistent supply chain of these minerals.

Intelligent and green technologies represent the future of human society. Critical minerals serve as the foundation for the application of these technologies. As a major mineral producer, China plays an important part in facilitating global scientific and technological cooperation.

During the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting in November 2023, the U.S. together with 13 other Indo-Pacific Economic Framework (IPEF) members jointly proposed establishing the Critical Minerals Dialogue. This initiative purportedly aims to develop stable supply chains for essential minerals within the IPEF, in an attempt to reduce China's influence on intelligent and green technologies.

Nevertheless, given its extensive reserves, production capacity and expertise in critical minerals, China will continue to play an indispensable role across the entire supply chain.

Copyedited by Elsbeth van Paridon

Comments to lanxinzhen@cicgamericas.com

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