Rare lands – Chinese weapons in the trade war with the US. How does Beijing usage a monopoly on critical metals?

In mid-March, Hong Kong customs officials discovered an different smuggling activity. In a container that was expected to cross the northern border of the city, alternatively of drugs or counterfeit goods there were more than 25 tons of antimony – a uncommon metallic used, among others, in advanced military equipment. Since last year, China has placed it under close export control. A fewer weeks later, a cargo, declared to be soldering paste, was intercepted in Guangxi, which in fact consisted of a bismuth – another component subject to restrictions. These incidents are just the tip of the iceberg in the global conflict for critical metals, in which China holds the strongest cards.

Why are the U.S. dependent on China?

As prof. Wang Xiaosong of Renmin University in Beijing emphasizes, the United States imports as much as 70% of its needed uncommon earth elements from China. These are not only natural materials, but besides processed materials, crucial for high-tech, weapons and energy industries. – In dynamic commercial tensions, uncommon lands have become a key variable. Critical metals are truly critical – Wang says.

An example?

Production of 1 F-35 fighter requires 417 kg of uncommon earth elements. Meanwhile, the Pentagon has adequate neodymium magnets (necessary in rocket guidance systems) for just 18 months.

Chinese strategy: from mining to diplomacy

China's dominance in the supply chain of uncommon metals is the consequence of decades of thoughtful politics. In the 1990s and early 21st century, the mediate State was mainly a supplier of inexpensive natural materials, while the US neglected to accumulate strategical stocks after the end of the Cold War. – U.S. environmental regulations and financial capital dominance pushed the mining and processing industry – explains Chen Weiqiang from the Chinese Academy of Sciences.

As of 2011, Beijing began restructuring the industry, introducing duties, export limits and tightening control of mines. present China accounts for 92% of the global production of processed uncommon earth elements (data from the global Energy Agency of 2023). Meanwhile, the only large mine in the U.S. – Mountain Pass, California – produces mostly lighter and little valuable elements.

– U.S. dense metallic separation and purification technology is 20 years behind China – emphasizes Wang Xiaosong.

Washington reaction: from Greenland to Ukraine

Donald Trump's administration is trying to counteract, considering access to critical metals as a substance of national security. In January 2024 Trump announced a “national energy crisis”, calling for increased mining. In April, Washington signed an agreement with Ukraine, guaranteeing US precedence in fresh mining projects. – But Ukraine has no power to replace China – notes Hou Lei from the Chinese Academy of Social Sciences.

America is besides looking for natural materials in Africa, negotiating with the Democratic Republic of Congo an agreement “minerals for security”. However, experts indicate that the construction of fresh supply chains will take more than a decade.

Will China keep a monopoly?

Beijing's not going to quit the advantage. Despite the provisional trade agreement of May 2024 (lowering the work on 115 products), China has not abolished export restrictions on uncommon metals. On the contrary – on May 12, the authorities announced a fresh run against smuggling “strategic natural materials”.

– Our position is not easy to shake in a short time – Wang Xiaosong says. – But the uncommon earth manufacture must be vigilant. In times of peace, prepare for danger.

Source:

• South China Morning Post – “How critical minerals become China’s eventual Trump card in trade war” (2024)
• International Energy Agency – Critical Metals study (2023)
• Centre for strategical and global Studies (CSIS) – Analysis of supply chains of uncommon earth elements (2024)
• Interviews with experts: Wang Xiaosong (Renmin University), Chen Weiqiang (Chinese Academy of Sciences), Hou Lei (Chinese Academy of Social Sciences)

Leszek B. Glass

Email: [email protected]

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