It is “the single largest source of mineral commodities for the United States, particularly for resources like rare earth elements, germanium, and industrial diamonds,” according to the United States Geological Survey, which notes in its most recent Mineral Commodity Summaries report that “of the 47 mineral commodities that the United States is more than 50 percent reliant on foreign sources, 24 came in part from [this country].”
It is the big elephant in the global resource policy room: China. And its footprint is growing – as we recently outlined, in the Arctic, and in Africa. A recent comprehensive Financial Times piece by David Pilling outlines Beijing’s growing multifaceted involvement on the African continent. As Pilling writes:
“In the past 15 years, […] the level of engagement by Chinese state-owned enterprises, political leaders, diplomats and entrepreneurs has put centuries of previous contact in the shade.”
China’s engagement ranges from loans over investments for construction of roads, ports and railways to involvement in peacekeeping missions. According to Pilling, who cites think tank figures, China-Africa trade has risen from a mere $10 billion to 220 billion since 2000, while China’s foreign direct investment stocks went up from just 2 per cent of US levels to 55 per cent. Meanwhile, about one-sixth of all loans to Africa come from China.
Most recently, and not surprisingly, Cobalt – a critical component of EV battery technology – has been in the crosshairs of Chinese companies, which have purchased multibillion-dollar stakes in mines in the Democratic Republic of Congo (DRC). At 3,400,000 metric tons, the DRC is home to the world’s largest Cobalt reserve and roughly 62 percent of global refined Cobalt is sourced here.
What does this mean for the rest of the world – and for the U.S. in particular? Writes Pilling:
“The China-Africa relationship — partly spontaneous and partly the fruit of an orchestrated push from Beijing — is shifting the commercial and geopolitical axis of an entire continent that many western governments had all but given up on. While Europeans and Americans view Africa as a troubling source of instability, migration and terrorism — and, of course, precious minerals — China sees opportunity. Africa has oil, copper, cobalt and iron ore. It has markets for Chinese manufacturers and construction companies. And, perhaps least understood, it is a promising vehicle for Chinese geopolitical influence.”
The global resource wars are continuing to heat up, but the U.S., for too long hamstrung by outdated policies and regulatory red tape, has been slow to even get off the starting block. There are indications this is changing, as evidenced by a current U.S. Commerce Department investigation into whether aluminum and steel imports from China and elsewhere constitute a threat to national security, among other things.
As China continues its global quest for resources, now would be a good time for policy makers and stakeholders formulate a comprehensive U.S. mineral resource strategy our country has been sorely lacking.
