As the demand continues to rise for precious minerals, many world powers are scrambling to invest and secure valuable trade agreements with major mineral deposits around the world. China has been leading and winning the race by investing billions of dollars for over 25 years.
Major Chinese Investment Abroad For Minerals (Africa)
Due to the continually rising demand for precious minerals, many world powers are scrambling to invest and secure valuable trade agreements at major mineral deposit sites around the world. At the forefront of this race, China has been investing billions of dollars into foreign economies, especially on the African continent, to secure the mineral rights to mine Africa’s natural resources like lithium, cobalt, nickel, manganese, graphite, and iron. According to the foreign policy research institute (fpri) “Between 2001 and 2018, China loaned approximately $126 billion to African countries. Between 2001 and 2018, China invested $41 billion in FDI.” These steps taken by China to place itself at the front of the pack in terms of foreign mineral investment has placed them in a unique place of power for the coming years. The need for rare minerals such as cobalt, lithium, manganese, etc… will make their investments, such as the $6 billion cobalt mining contract (see Bloomberg) signed in 2008 with the Democratic Republic of the Congo (DRC) all the more lucrative and very strategic for China
China Holds A Stranglehold On The World's Mineral Supply
China's position on the mineral world stage will allow them to dominate the EV and lithium-ion battery world now and in the near future. CSIS (Center for Strategic and International Studies) states that “From 2008 to 2018, China exported nearly 408,000 metric tons of rare earths, which amounted to 42.3 percent of all rare earth exports over this period.” The United States pales in comparison, supplying only 9.3 percent of the global total. CSIS also says that “As of 2018, the US still imported 80.5 percent of its rare earths from China.” This shows how dependent the US is on China, so much so that if China were to disrupt global supply chains the United States would be severely hampered.
Chinese Dependence Is A National Security Risk
This would be a massive national security risk for the U.S. Being dependent on any one source for the majority of your resources means that someone like China for example could cut off the supply of material which would effectively halt many of our domestic markets. CIA Director William Burns said in congressional testimony. "An adversarial, predatory Chinese leadership poses our biggest geo-political test." Overcoming this “geo-political test” means effectively weaning US markets off Chinese rare earth suppliers and finding our own domestic markets or at the very least diversifying our suppliers.
Mineral Availability Could Strain The EV Market
Finding independence from Chinese rare earth minerals will be extremely important in the coming years, especially since certain markets such as the EV (electric vehicle) market will require increasing magnitudes of extra material to continue to function. The IEA’s 2021 sustainable development scenario of critical minerals as cited by the WEF (world economic forum) states “80% of battery storage in 2040 would be used in light-duty electric vehicles, and this will require a 40-fold increase in the production of lithium and nickel and more than 20 times as much as copper, graphite, and cobalt compared with 2020 levels.” Any disruptions to the supply chain from China would drastically alter our domestic markets and the WEF even predicts that because batteries account for about “30%-40% of the cost of an EV, and a price surge or supply disruption could make EVs less attr