The West is getting serious about reducing its vulnerabilities against the backdrop of an increased threat of China weaponizing its control of critical materials supply chains.
As the Financial Times reports, the Minerals Security Partnership, convened by the U.S. in June of 2022 which encompasses 12 countries plus the European Union, is planning to release by the end of this year a shortlist of “some 15 projects culled from about 200 options,” according to Jose Fernandez, U.S. undersecretary for economic growth, energy and the environment. Projects slated for MSP support will be located in various parts of the globe with some in Africa, “a couple” in Europe, a few in Latin America, and others in Asia, and will involve various segments of the supply chain, including mining, processing, and recycling.
According to Fernandez, being a victim of Chinese supply chain weaponization had prompted several countries to join the MSP in the first place, and with China continuing to ratchet up export restrictions in the face of skyrocketing demand for battery criticals — lithium, graphite, cobalt, nickel and manganese — and other materials underpinning the green energy shift and defense technology, the stakes are only getting higher.
As ARPN outlined, Beijing — known to have a penchant for tight state control over its resource sector, has been tightening its reins on its critical mineral supply chains even further in recent months, specifically for the country’s lithium battery supply chain, and has established a new state-owned group to serve as a “consolidated hub for the country’s iron ore trade,” with the mandate for “China Mineral Resources Group” covering mining, ore processing and trading. The Chinese government is currently considering prohibiting exports of certain rare-earth magnet technology, adding fuel to the fire as tensions between China and the West soar.
As the Wests resolve to break China’s dominance over critical mineral supply chain mounts, Christina Lu, writing for Foreign Policy, cautions:
“(…) there are more questions than answers about how these efforts will pan out. As lawmakers continue to hammer out new agreements behind closed doors, it remains unclear how they align with global trading rules and what this momentum means for countries that lack free trade agreements with the United States. Engineering supply chains isn’t as simple as finding new mines, either; it involves an entire ecosystem of processing, refining, and manufacturing capabilities.”
She adds:
“China spent decades building out its industry, and experts warn that wrestling new supply chains will be an expensive and arduous uphill battle that the United States is only just beginning.”
However, every success story has a beginning — and agreement on a series of projects to support as a unified bloc can be an important piece of the puzzle if embedded in a comprehensive all-of-the-above approach to mineral resource security; one that covers both partnerships and alliances as well as supporting the domestic advancement of projects covering all aspects of the supply chain.
As ARPN stated before:
“Beijing will not slow down its global quest for resource dominance, and the critical mineral arms race will continue to heat up. As such, it is good to see that stakeholders here and elsewhere are finally beginning to acknowledge this fact and are ‘gearing up for the long haul.’”
