Time is of essence today. If because of the actions of our politicians, we, the West, the golden billion of people, will be slow to get minerals from China, somebody from the rest, 7 billion people, will get the minerals earlier. On this basis, somebody will take over the new, sustainable, economy in the global market. We will be left in the dust. Goats will be browsing the streets of our cities again. To our huge disadvantage we discounted the actions of those 7 billion, when in vain trying to destroy the Russian economy with recent sanctions. We would be well advised to stop repeating this mistake, trying to ruin China's economy with sanctions.
"SINGAPORE -- China's decision this week to restrict the export of two minerals used in semiconductors, solar panels and missile systems was more than a trade salvo. It was a reminder of its dominant hold over the world's mineral resources -- and a warning of its willingness to use them in its escalating rivalry with the U.S.
About two-thirds of the world's lithium and cobalt -- essential for electric cars -- is processed in China. The country is the source of nearly 60% of aluminum, also used in EV batteries, and 80% of polysilicon, an ingredient in solar panels. It has an even tighter grip on rare-earth minerals that go into crucial technologies, such as making smartphone touch screens and missile-defense systems, accounting for 90% of their refining, according to the International Energy Agency.
Chinese companies also often control processing that isn't done at home. A significant share of the world's nickel supply, for instance, comes directly from China, but much of the rest also is in Chinese hands, refined by companies from China in places such as Indonesia and Papua New Guinea.
China's hold over these minerals gives it the power to potentially disrupt the West's energy transition, chip manufacturing and defense industries as its rivalry with the U.S. heats up. A Chinese move to restrict exports of, say, lithium or cobalt would hit non-Chinese automakers hard, throwing the production of electric-car batteries into disarray.
Such extreme measures are unlikely in the near term, not least because they also would hurt Chinese businesses, but experts say they aren't off the table. "We would be foolish to limit our thinking that that kind of thing is impossible," said Morgan Bazilian, director of the Payne Institute for Public Policy at the Colorado School of Mines. "If you keep ratcheting up your tit-for-tat, that's one area it could go."
Beijing's restrictions on the export of gallium and germanium announced Monday followed U.S. steps in October to limit Chinese access to equipment used to make advanced chips. The Chinese curbs are expected to add urgency to Western efforts to develop alternative mineral sources.
The Biden administration has prioritized scaling back U.S. reliance on Chinese minerals, mainly through its signature green-investment program known as the Inflation Reduction Act. The 2022 law provides subsidies for electric-vehicle batteries that contain minerals mined and refined in the U.S. and friendly nations -- an effort to build supply chains that don't run through China.
Another recent law, the Infrastructure Investment and Jobs Act of 2021, provides millions of dollars in grants to advance critical-minerals mining and authorizes federal loans for projects that boost domestic supply of the resources.
Money has begun flowing under various U.S. policies. Ireland-based TechMet, whose projects include nickel and cobalt mining in Brazil, has received $55 million since 2020 from a U.S. agency, the International Development Finance Corp., in exchange for about a 15% stake in the company. This year, TechMet began exporting a nickel product it processes in Brazil for use in Western EVs, and is raising private and public funding to expand its mine.
In the U.S., Talon Metals is seeking permits to begin mining nickel in Minnesota. The Energy Department selected the company for a $114 million grant for a battery-mineral processing facility in North Dakota. That is more than a quarter of the estimated project cost, according to the company.
Building new supply chains can't happen overnight. Mines take years to develop, with processes to obtain environmental clearances in Western countries adding to long lead times. Trained workers are in short supply. Many ore-rich countries are politically unstable or lacking in environmental credibility, which deters Western firms even as Chinese ones, often backed directly or indirectly by Beijing, are willing to forge ahead." [1]
1. World News: Beijing Flexes Muscle Over Minerals. Emont, Jon.
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 08 July 2023: A.7.
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