Regional focus
Right: Cargo ships in China load rare earth soil for export.
Previous page: Mining is a central pillar of China’s global economic power, particularly due to the wealth of REEs available in its land.
63%
The percentage of the world’s rare earth mining that is accounted for by China.
85% 92%
Politico 14
The percentage of rare earth processing that is controlled by China.
China’s share of global rare earth magnet production.
by over 300%. American policymakers, for their part, are increasingly conscious of the risks of a Chinese REE monopoly – especially when Beijing could use its influence to wreck the global economy as part of a future escalation in the situation involving Taiwan. In 2022, President Biden announced plans to invest $35m in MP Materials, at the time the US’s only rare earth mining and processing operation. That’s shadowed by broader moves across the Western alliance. In June 2022, the European Raw Materials Fund was launched with an initial budget of €2bn, even as the Mountain Pass facility was slated to reopen. To an extent, experts believe these attempts to ‘decouple’ Western REE needs from China are paying off, with Vekasi stressing that beyond mining, Beijing’s rivals are also “working on other downstream technologies” independent of Chinese supply chains. With that in mind, the aspirations of a new Texan firm to mine 300,000 metric tonnes of rare earth oxides over the next several years doesn’t seem completely far-fetched. Not that Beijing is watching these events serenely. Already, CCP officials have created a new state-owned REE enterprise, which will soon control up to 70% of the country’s sector. And though China’s erstwhile domestic industry is slowing down – as Zhang says, China now imports more REEs than it exports – that’s being replaced by significant overseas investment. Partnering with a bewildering range of foreign governments, Chinese rare earth concerns are gobbling up mining contracts from Africa to Asia. A particular example here is Burma. Bordering the People’s Republic, the valleys and rice paddies of Kachin state exported over a $1bn worth of rare earths to China between May 2017 and October 2021. The Democratic Republic of Congo is another area of interest: across Africa’s biggest country, Chinese investors control an estimated 70% of the mines. Once again, you get the sense that the authoritarian nature of Chinese politics gives Xi Jinping an inherent advantage here. Unlike democratic countries, obliged to at least feign an interest in human rights, China can happily trade with even the grubbiest of REE-rich
regimes. Burma is a case in point: according to the Global Witness NGO, there’s a “high risk” that proceeds from rare earth sales to China directly fund the crushing of internal dissent. And though recent protests by locals did temporarily halt foreign operations in the country, neither China nor Burma seem particularly worried about the environmental impact of Kachin’s mines – clear from the treeless, pockmarked landscapes diggers leave behind.
Under pressure What about the future? Vekasi believes time is of the essence – in more ways than one. From an economic perspective, researchers believe global demand for some REEs, especially given the rise of green-friendly alternatives to fossil fuels, will grow by almost 50% through the middle of this century. With that in mind, the University of Maine academic suggests it makes sense for the US and her allies to rush towards a situation where they’re not “enmeshed in a Chinese supply chain”. In the same vein, Vekasi says there’s pressure on Beijing as well. It may have lorded over REEs for decades – but it’s equally clear that this preeminence may soon end. If, in other words, Xi Jinping is planning on using REEs as a way of cowing the Western alliance over Taiwan, the time to act is short. “If China wants to have that geopolitical leverage to actually use economic coercion with critical minerals?” asks Vekasi rhetorically. “Five years.”
Given the potentially catastrophic consequences of any showdown over Taiwan, that timeline feels ominously short. But Zhang is more sanguine. “It’s not likely that China will use the ‘wild card’ of REE in geopolitical struggle,” she argues. “China has benefited greatly from globalisation in the past two decades.” Another factor, Zhang adds, are Beijing’s own problems decoupling from Western technology, limiting the CCP’s ability to start its own bout of economic warfare. All the same, the possibility remains for the future of Chinese mining, in all its forms, to be just as revolutionary as its past. ●
World Mining Frontiers /
www.nsenergybusiness.com
tab62/
Shutterstock.com
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