FRome for Manufacturing and Supply Chain Extraction and Production – China is an ever-present entity in conversations about rare earth elements today. In fact, it woke the world in 2012 to geopolitical and strategic uses of rare earths. Since then, Beijing’s resource diplomacy has been shaping individual, bilateral and multilateral initiatives on a global scale. But in the last few years, this monopoly is becoming less and less.
Rare clay mines in Myanmar, Madagascar, Greenland, the Pacific Ocean and Afghanistan are among those China has invested in to maintain its stronghold. But its initiatives and efforts to maintain its monopoly need further investigation.
Read also: India is a rich source of rare earths but still imports. US collaboration could help change that
Chinese rare earth monopoly
By whom did China’s entry into the politics of rare earths begin? Sino-Soviet industrialization program in 1956 When Russia began developing test alloys in China to develop its own aircraft and ballistic missiles. When China conducted its first nuclear weapons test in 1964, it also realized it needed to develop its rare earth industry. China’s major deposits, Beyoncé Oboshas both bastanesite and monazite minerals, which enabled it to overcome regulatory hurdles and fill the gap during the decline of US industry in the mid-1980s. Main credit goes to Dr. Xu Guangxian, called ‘the father of China’s rare earth industry’. It was his discovery of the ‘cascade theory of countercurrent extraction’ that revolutionized rare earth production and marked the beginning of China’s technological superiority in this field. China’s monopoly on the value supply chain began in the 1980s and was led by Chinese leader Deng Xiaoping. 1992 statement: “The Middle East has its own oil, China has its own rare earths (中東有石油, ),” reflecting its dream of becoming a major rare earth producer.
China’s high production and export potential has aided its geopolitical and economic development around rare earth minerals. These advances have made the world dependent on Beijing to such an extent that they fear a Chinese sanctions more than a military conflict. The Senkaku-Diaoyu island dispute that began in 2011 is an example of what Xi Jinping’s country is capable of.
The reliance of developed countries such as the US, Japan and the European Union on Chinese rare earth elements (REEs) stems from their need to manufacture defense equipment, particularly drones, and commitment to clean technologies such as electric vehicles and wind turbines. Indeed, in 2019 the U.S. Imported 80 percent of its rare earth minerals From China, as reported by the US Geological Survey. Meanwhile, the European Commission 98 percent reported imports of rare earth supplies From China in 2020.
Read also: Rare earths, their strategic importance, China’s monopoly and why it matters to the Quad
monopoly management
Can be attributed to the Chinese rare earth monopoly three main factors: advanced economic statecraft; cheap labor availability; and non-existent environmental laws. Research and innovation programs such as Programs 863 and 973 prompted China to modernize its rare earth sector. It also initiated several policies and plans, as a result of which, China dominates all aspects of REE supply chains – production, processing and research and development. It has developed thirteen rare earth deposits, 44 million metric tons of reservesand a production capability 14 million metric tons. In addition, the Chinese government is moving towards clean production of rare earths with green hydropower and eliminating wastewater discharges containing thorium or radioactive solids.
Molycorp Mountain Pass Deposit (US), Lynas Corporation Limited (Australia), Norra Karr (Sweden), Kvanefield and Kringlerne (Greenland) are options that are trying to compete with China’s rare earth industry. But they need more than 15-20 years to reach their potential. Compared to sugar industries, they mostly achieve mild REE. In addition, these companies are still competing with their thorium-uranium levels and financial problems.
With a focus on increasing research and development, China has developed two major laboratories working on rare earth elements: the State Key Laboratory of Rare Earth Materials Chemistry and Applications at Peking University and the State Key Laboratory of Rare Earth Resources Utilization at Changchun University. State Key Laboratory. Furthermore, China is the only country that has Magazines with a Special Focus on Rare Earths—The Journal of Rare Earths—under editor Xu Guangxian; and China Rare Earth Information Magazine under the scientists.
Read also: The Chinese are digging, but this isn’t Jurassic Park. Pacific Hides Other Treasures
global concerns
The world, especially the highly import-dependent countries of rare earths, became concerned about the Chinese monopoly after two major events.
The first is the Sino-Japanese Senkaku/Diaou Island conflict.
China restricted exports of critical REE minerals to Japan in response to the detention of a trawler captain, affecting the auto industry of Japan’s largest importer of REE. Although China did not issue an official statement, its resource geo-strategy was perceived by the US, the European Union and Japan as a serious threat. He sued the World Trade Organization, which ruled that China could not impose limits on REE exports. But the ruling came four years later, and China denied the allegation, claiming the action was meant to preserve REE for its own industries.
The second event is the US-China trade war.
In 2018, the then US President Donald Trump accused China of infringing on the intellectual property rights of American companies and in May 2019 imposed tariffs on Chinese tech companies, including Huawei. But the most important part of China’s retaliation was export ban of rare earth metals and their compounds. People’s Daily then wrote: “We advise the US side not to underestimate the ability of the Chinese side to protect development rights and interests. Do not say that we did not warn you.” This reflects China’s confidence in its monopoly on the REE supply chain and how it can use rare earth metals as fodder to negotiate its demands.
Read also: The West is tired of China’s power game. India can take advantage
Continuing efforts and initiatives
of china Declining reserves and production capacity share It is pushing its geoeconomic participation in resource-rich countries with poor economies to maintain its monopoly from 70 percent in the 2000s to only 38 percent in 2020.
China’s major rare earth geo-economic investment is in Madagascar, which has the sixth largest reserves of rare earth elements. According to ReutersIn 2019, a unit of the China Nonferrous Metal Mining Group (CNMC) signed a non-binding memorandum of understanding with Singapore-listed ISR Capital, employing a Chinese firm as a contractor on a rare earth project in Madagascar. Can see. It will have the right to buy 3,000 tonnes of rare earth products within three years of commencement of production and have the opportunity to make equity investments in the future.
Similarly, China is also showing interest in Afghanistan’s mineral industry, Former PLA Colonel Zhou Bo written in new York Times He “With America back, Beijing can offer what Kabul needs most: political fairness and economic investment. Afghanistan in return has what China prizes the most: opportunities in infrastructure and industry construction – areas in which China’s capabilities are arguably unmatched – and access to $1 trillion in untapped mineral deposits, including lithium, iron, Important industrial metals such as copper and cobalt are included. However, no progress has been made so far with regard to their mineralogy. Sugar Companies also took steps In Alien Rare Earths. Reuters Leshan Shenghe Rare Earth Company, a unit of Shenghe Resources and the largest shareholder in Greenland Minerals and Energy, is seeking to develop the Quanfjeld rare earth project in Greenland, the report said. Recently, Cyanamine Resource Group of China $200 million project launched To build a plant and expand existing mining operations at the Bikita Lithium Mine in Zimbabwe, which President Emmerson Mnangagwa saw as an opportunity to develop the nation into a major player in the global battery mineral supply chain.
While these initiatives are in progress and not as developed as the Belt and Road Initiative, they are important in the context of growing global efforts to reduce China’s capacity reserves and reduce dependence on Beijing. Will China be able to maintain its monopoly or lose out to its claimants like the US or Australia? Only time will tell.
Neha Mishra is Research Associate (Indo-Pacific Group) at the Center for Air Power Studies. She is pursuing her PhD from Delhi University on ‘India-China Geo-Economic Engagement’. Thoughts are personal.
(Edited by Srinjoy Dey)