Tag Archives: China rare-earths kingdom

The New Opium War: How the World Got Addicted to China

Leave a reply

 A fundamental axiom of economics is that when two individuals or countries trade, both are better off. In the decades after World War II, the U.S. was the world’s largest exporter and economy and as it grew, it imported more, helping its partners. As they grew, they bought more of what the U.S. made. Expanding trade helped everyone specialize, leading to more competition, innovation and choice, and lower costs.

China is now the world’s second-largest economy and its largest exporter, but its philosophy is quite different. It has never believed in balanced trade nor comparative advantage. Even as it imported critical technology from the West, its long-term goal was always self-sufficiency. In 2020, Chinese leader Xi Jinping codified this approach as “dual circulation.” This would, he said, “tighten the international industrial chain’s dependence” on China while ensuring China’s production was “independent” and “self-sustaining.”

And as China expands into high-end manufacturing such as aircraft and semiconductors, Xi has decreed it must not relinquish low-end production such as toys and clothes. Beijing has discouraged Chinese companies that invest abroad from transferring key know-how, such as in the production of iPhones and batteries. Xi has rejected fiscal reforms that would tilt its economy away from investment, exports and saving and toward household consumption and imports.

Excerpt from Greg Ip, World Pays a Price for China’s Growth, WSJ, Dec. 6, 2025

Who is Afraid of China? the United States Army

Leave a reply

China plans to ease the flow of rare earths and other restricted materials to the U.S. by designing a system that will exclude companies with ties to the U.S. military while fast-tracking export approvals for other firms…The “validated end-user” system, or VEU, would enable Chinese leader Xi Jinping to follow through on a pledge to President Trump to facilitate the export of such materials while ensuring that they don’t end up with U.S. military suppliers, a core concern for China…  The VEU mechanism that Beijing is considering is modeled on U.S. laws and procedures, as is much of Beijing’s export-control architecture.

Under the American version of the VEU system, which has been active since 2007, certain Chinese companies are cleared to buy sensitive goods under a general authorization—essentially a simplified export-approval mechanism—instead of needing individual licenses for each purchase. This makes it easier to import controlled goods such as chemicals or chip-making equipment, but requires companies to put up with U.S. government inspections of their facilities, among other steps, to verify compliance with the program…

Companies in the U.S. and Europe have complained of reduced access to rare-earth magnets from China. Though China has periodically agreed to relax magnet restrictions, Chinese rare-earth magnet exports to the U.S. declined 29% in September 2025 from the month before

Excerpt from Jon Emont et al, China Hatches Plan to Keep U.S. Military From Getting Its Rare-Earth Magnets, WSJ, Nov. 10, 20215

While United States Hibernated, China Salivated

Leave a reply

When China tightened restrictions on rare-earth exports in October 2025, stunning the United States, it was the latest reminder of Beijing’s control over an industry vital to the world economy. China’s dominance was decades in the making. Since the 1990s, China has used aggressive tactics to build up and maintain its lock over rare-earth minerals, which are essential to making magnets needed for cars, wind turbines, jet fighters and other products. Beijing provided financial support to the country’s leading companies, encouraged them to snap up rare-earth assets abroad, and passed laws preventing foreign companies from buying rare-earth mines in China. It eventually consolidated its domestic industry from hundreds of businesses into a few giant players, giving it further leverage over prices…

In 1995, Chinese state-linked companies received U.S. government approval to buy the rare-earth materials and magnet business started by General Motors, called Magnequench. In the following years, the Chinese ownership shut down all its rare-earth plants in the U.S. and shipped the equipment to China. Top American engineers were offered opportunities to go to China and set up new plants there.  “There were some colleagues that were dead set against it, saying they would never help China learn our technology,” said one magnet expert who ultimately agreed to go to China. “When I arrived, I could not believe what I was seeing. The number of new factories being built, and the rate at which they were being built, was mind-blowing,” he said….  By the mid-2000s, the U.S. rare-earth industry had been all but wiped out. Mountain Pass, America’s major rare-earth mine, had been shut down, as had virtually all American facilities that processed rare earths and turned them into magnets. China produced around 97% of the world’s rare earths, giving it what was effectively a global monopoly…

By 2021, the U.S. government was growing more worried about China’s ability to weaponize rare earths, causing prices to jump. Washington began offering large-scale funding for new rare-earth plants, including a refinery in Texas to be built by Lynas, an Australian rare-earth company. But in 2021, the Association of China Rare Earth Industry issued a warning: to China’s leadership If Beijing wanted to maintain “China’s absolute dominant position,” the country needed to relax state production quotas. Beijing responded in 2022 by pushing up output by 25%, the most in years, with another large increase the following year. Prices tanked, hitting the bottom lines of Western producers and leading some to unload assets…Beijing also introduced new measures preventing the transfer of its rare-earth processing technology abroad.

Excerpt from Jon Emont, How China Took Over the World’s Rare-Earths Industry, WSJ. Oct. 19, 2025

Out-of-Date: Academic Cooperation

Leave a reply

Mr. Trump noted in the summer of 2025  that “the United States is in a race to achieve global dominance in artificial intelligence,” which Joe Biden called “a defining technology of our era.” Universities help drive that race. Meta’s chief AI officer, Alexandr Wang, has argued that the rate of AI progress may be such that “you need to prevent all of our secrets from going over to our adversaries and you need to lock down the labs.”

Thousands of Chinese citizens are working and studying in such labs….In AI specifically, nearly 40% of top-tier researchers at U.S. institutions are of Chinese origin. Beijing is aggressively cultivating American-educated and American-employed researchers via the Thousand Talents program.

Blindly embracing academic cooperation with a geopolitical rival is absurd. Nobody suggests we should train Iranian nuclear physicists or Russian ballistics engineers. The U.S. wouldn’t have been better off collaborating more with Nazi Germany in the 1930s or with the Soviet Union during the Cold War. Why make an exception for a nation dedicated to surpassing the U.S. in emerging technologies?

Excerpt from  Mike Gallagher, Send Harvard’s Chinese Students Home, WSJ, Aug. 19, 2025

De-Chinafication of Rare Earths: an Uphill Battle

Leave a reply

China mines some 70% of the world’s rare earths, the 17 metallic elements primarily used in magnets needed for civilian and military technologies. But its 90% share of processing for rare earths mined around the world is what really concerns officials from other countries working to secure their supply.

“China is a formidable competitor,” said Ramón Barúa, chief executive of Canada’s Aclara Resources, which is opening a rare-earths mine in Brazil to supply a processing plant it plans to build in the U.S. Aclara said it plans by August to decide where in the U.S. to build its plant for separating rare-earths deposits into individual elements. Aclara signed an agreement in 2024 to supply rare earths to VAC, a German company that is building a factory in South Carolina with $94 million in Pentagon funding to make magnets for clients including General Motors…

Brazil has the world’s second-largest rare-earth reserves after China, some 21 million tons, according to the U.S. Geological Survey. That represents more than a fifth of known global reserves—and more than 10 times those in the U.S…Despite its huge reserves, Brazil has been a small player in rare earths because of its complex mining regulations and the difficulty of attracting financing from companies willing to confront entrenched Chinese competitors. Costs to mine and process Brazilian rare earths are estimated to be around three times China’s, meaning Western buyers would likely pay a substantial premium for Brazilian minerals. Only a few companies outside China have mastered rare-earth processing, and the learning curve is steep. 

Brazil’s first big rare-earths mine opened in 2024 by a US private equity company some 90 miles west of the town of Nova Roma…but the mine is contracted to ship most of its production to China !…Aclara plans to invest some $600 million to complete work on a larger plant next to the mine in Nova Roma to start full production in 2028.

Excerpt from Samantha Pearson, Rare-Earths Plants Are Popping Up Outside China, WSJ, May 18, 2025

The New Trump Doctrine: Kiss the Hand you Cannot Bite

Leave a reply

Four US major automakers are racing to find workarounds to China’s stranglehold on rare-earth magnets, which they fear could force them to shut down some car production within weeks. Several traditional and electric-vehicle makers—and their suppliers—are considering shifting some auto-parts manufacturing to China to avoid looming factory shutdowns, people familiar with the situation said.

Ideas under review include producing electric motors in Chinese factories or shipping made-in-America motors to China to have magnets installed. Moving production to China as a way to get around the export controls on rare-earth magnets could work because the restrictions only cover magnets, not finished parts, the people said.

If automakers end up shifting some production to China, it would amount to a remarkable outcome from a trade war initiated by President Trump with the intention of bringing manufacturing back to the U.S.  “If you want to export a magnet [from China] they won’t let you do that. If you can demonstrate that the magnet is in a motor in China, you can do that,” said a supply-chain manager at one of the carmakers.

China in April 2025 began requiring companies to apply for permission to export magnets made with rare-earth metals, including dysprosium and terbium. The country controls roughly 90% of the world’s supply of these elements, which help magnets to operate at high temperatures. Much of the world’s modern technology, from smartphones to F-35 jet fighters, rely on these magnets….In May 2025, industry groups representing most major automakers and parts suppliers told the Trump administration that vehicle production could be reduced or shut down imminently without more rare-earth components from China.

Excerpt from Sean McLain et al., Automakers Race to Find Workaround to China’s Stranglehold on Rare-Earth Magnets, WSJ, June 4, 2025

Two days after the publication of this WSJ article, Trump announced, on June 6, 2024, that Xi agreed to let rare earth minerals flow to US (in exchange of? not revoking Chinese student visas? what else?)

To Own Means Nothing-To Do Means More: Metals and Minerals of the World

Leave a reply

Trump wants to secure the minerals the U.S. needs for everything from smartphones to jet fighters by striking deals in Ukraine, Greenland and even Russia. But even if the Trump administration secures more mines for American companies through agreements like the mineral-rights deal being discussed with Ukraine, it may have to send much of the minerals to China—its main geopolitical rival—to be processed…

In truth, the U.S. already has abundant supplies of rare earths, but it relies on China to refine them. That is because the U.S. has lost much of its capacity to process minerals, while China has become the world’s dominant refiner of rare earths, cobalt, copper and many other metals.

Until the 1990s, the U.S. was a major refiner of minerals and metals. But then China emerged as the dominant player, powered by its cheap labor force and looser environmental regulations of a sector that can be highly polluting. The voracious need of Chinese manufacturers for raw materials during the country’s years of explosive growth was also a boon for Chinese refiners. Today, the sheer scale of China’s refining industry makes it difficult for others to compete. According to industry estimates, the cost of building a refinery plant in China is a third of the cost in the U.S.

Excerpts from  Jon Emon, How China Beat Out the U.S. to Become the Top Player in Rare-Earths Refining, WSJ, Mar. 25, 2025

The Conquest of Greenland–Not for the Faint Heart

Leave a reply

Teeming with underground riches, Greenland might set the scene for a modern gold rush. President Trump, for one, covets Greenland’s deposits of critical minerals, some of the largest in the Western Hemisphere. But as the visiting Australian company, Energy Transition Minerals, has discovered, securing them is a daunting task. 

Kvanefjeld, the site of the billion-year-old solidified magma in the mountains above the town of Narsaq, contains an estimated 1 billion tons of minerals, enough to potentially transform the global market for rare-earth elements, used in such things as electric vehicles, jet fighters, wind turbines and headphones. 

Mining companies in Greenland operate in one of the most challenging environments in the world because of the Danish territory’s sparse infrastructure, hostile weather and a tricky political climate. Mining here is expensive, and few investors are willing to pay for it given the uncertainties.   Despite its extraordinary mineral wealth, Greenland has only two active mines: a gold mine in commissioning phase and a mine producing anorthosite, used in fiberglass, paints and other construction materials…“Investing in Greenland is not for the faint of heart,” said Brian Hanrahan, chief executive officer of Lumina Sustainable Materials, which operates the anorthosite mine on the west coast of Greenland. “The local logistics are incredibly complex.” Building a mine involves high startup costs, and has to be done from scratch in rugged terrain. Greenland is nearly one-fourth the size of the U.S., and about 80% of it is covered by ice, with deep fjords and ice sheets up to a mile thick. There are no roads between settlements, and shipping is treacherous because of floating ice off the coast.

Bureaucracy is a hindrance, too. The process of granting licenses to foreign companies to mine is lengthy and cumbersome. While applying for licenses, companies need to keep employees on payroll with benefits. With a population of 57,000, Greenland’s labor market is tight…Extracting Greenland’s minerals is about more than profit; it is about resource control. Western governments are eager to break China’s dominance of the global market for rare earths and other minerals, which it could wield as a weapon in a trade war…“Greenland is host to some of the largest rare-earth resources known to exist globally, which have potential to supply virtually all the foreseeable needs of North America and Europe for decades to come,” said Ryan Castilloux, managing director of Adamas Intelligence… ‘

But when directors from Energy Transition Minerals visited Narsaq in February 2025, they were met near the icy helipad by protesters in brightly colored vests emblazoned with a logo spelling “Uranium? No, Thank You” in Greenlandic…Many among the Inuit population of Narsaq are concerned about contamination of drinking water, plants and wildlife. “We live off nature as our forefathers have done for generations. We will be forced to move,” said Avaaraq Bendtsen, a 25-year-old archaeology student. “Think about the indigenous people as well. This is our land. It is our mountain.”

Excerpts from Sune Engel Rasmussen, Greenland Has the Makings of a Mining Boom. So Where Is Everyone?, WSJ, Mar. 4, 2025

The Real Green Energy Transition: Mining Minerals from Plants

Leave a reply

Worries about China’s domination of critical minerals are driving Western scientists and companies to embark on increasingly novel ways to develop alternative sources. One such effort seeks to exploit a quirk of nature: Certain plants, called hyperaccumulators, absorb large quantities of minerals, like nickel and zinc, from the soil. Cultivating these plants, and then incinerating them for their metal, could provide U.S. companies with a small stream of domestically sourced minerals—without the expense and environmental destructiveness of conventional mining….At a greenhouse in Amherst, MA, scientists undertake gene editing to build a new fast-growing, nickel-absorbing oilseed plant. If successful, the plant could be used to harvest the metal from mineral-rich soils in states such as Maryland and Oregon…

Some 10 million acres of barren, nickel-rich soil are scattered around the U.S. In such areas, concentrations of minerals are generally too low to justify large-scale mining, but could offer opportunity for inexpensive nickel farming. In the case of nickel phyto-mining, as such efforts are known, the plants are dried and incinerated, leaving an ashy nickel concentrate. This concentrate can then be further purified and turned into battery-grade material.

To be sure, phytomining is small in scale. Companies in the field are targeting harvests of around 300 pounds of nickel per acre per year, roughly enough for six EV batteries. But the funding for nickel-farming plants is one small piece of a broad effort by the U.S. government to develop secure supplies of the minerals that are needed for defense and cutting-edge industry, and are an area where China is dominant.

Excerpt from Jon Emont, The New Weapon Against China’s Mineral Dominance: Plants, WSJ,  Jan. 25, 2025

Get Down and (Very) Dirty: How to Break Free from China’s Grip on Rare Earths and Minerals

Leave a reply

The Biden administration held talks with three firms in the fall of 2024 about purchasing one of the world’s largest non-Chinese cobalt producers…The talks over Chemaf, a mining company based in the Democratic Republic of Congo, are part of a push by the administration to secure global supplies of a metal used in everything from jet fighters and drones to electric-vehicle batteries. For more than a decade, Chinese companies have spent billions of dollars buying out U.S. and European miners in Congo, which produces nearly 75% of the world’s cobalt supply. That has put China in a dominant position in both the production and processing of the mineral.

It has been difficult for the U.S. government to interest American investors in any sector in Congo because of the country’s poor infrastructure, limited skilled labor, resource nationalism and reputation for government corruption. U.S. government officials have spoken with mining and artificial-intelligence company KoBold Metals, copper miner First Quantum Minerals and investment firm Orion Resource Partners about participating in a deal to acquire Chemaf, either separately or jointly…

Chemaf, which says its mines could produce 20,000 tons of cobalt annually—making it one of the world’s largest cobalt producers—was put up for sale in 2023 by its founder, Shiraz Virji…When The Wall Street Journal visited Chemaf’s Mutoshi mine in 2018, freelance Congolese miners could be seen descending underground without helmets, shoes or safety equipment. Miners were using picks, shovels and bare hands to unearth rocks rich with the metal. Water sometimes rushed into holes and drowned people, and an earth mover buried one alive, said local workers and mine officials…

In June 2024, Chemaf agreed to sell itself to Chinese state-backed Norin Mining. Shortly after, U.S. pressure helped block the sale…

Excerpts from  Alexandra Wexler and Julie Steinberg, How the U.S. Is Trying to Challenge China’s Cobalt Chokehold, WSJ, Oct. 15, 2024

What Ails the West: the Forgotten Art of Industrialization

Leave a reply

For the past few years, the West has been trying to break China’s grip on minerals that are critical for defense and green technologies. Despite their efforts, Chinese companies are becoming more dominant, not less. They are expanding operations, supercharging supply and causing prices to drop. Their challengers can’t compete. Take nickel, which is needed for electric-vehicle batteries. Chinese processing plants that dot the Indonesian archipelago are pumping out vast quantities of the mineral from new and expanding facilities, jolting the market. Meanwhile, Switzerland-based mining giant Glencore is suspending operations at its nickel plant in New Caledonia, a French territory, concluding it can’t survive despite offers of financial help from Paris. The U.K.’s Horizonte Minerals, whose new Brazilian mine was expected to become a major Western source, said last month that investors had bailed, citing oversupply in the market. Lithium projects in the U.S. and Australia have been postponed or suspended after a surge in Chinese production at home and in sub-Saharan Africa. 

The only dedicated cobalt mine in the U.S. also suspended operations last year, five months after local dignitaries attended its opening ceremony. Its owners say they are struggling against a flood of Chinese-produced cobalt from Indonesia and the Democratic Republic of Congo.

Last year, non-Chinese production of refined cobalt declined to its lowest level in 15 years… The share of lithium mining done within China or by Chinese companies abroad has grown from 14% in 2018 to 35% this year… Over the same time, lithium processing done within China has risen from 63% in 2018 to 70%…China has many advantages in the race to lock up minerals. Its miners are deep-pocketed and aggressive, making bets in resource-rich countries that Western companies have long viewed as corrupt or unstable, such as Indonesia, Mali, Bolivia and Zimbabwe. State banks provide financing for power plants and industrial parks abroad, paving the way for further private Chinese investment.

China’s rapid industrial development also means its companies have spent decades fine-tuning the art of turning raw ore into metals. They can set up new facilities quickly and cheaply. A paper published in February by the Oxford Institute for Energy Studies pegs the costs of building a lithium refinery outside China as three to four times higher than building one within the country. In eastern Indonesia, Chinese companies have built a fleet of highly efficient nickel and cobalt plants over the past few years after mastering a technology Western miners long considered glitchy and expensive. The plants run on coal power, some of it new, at a time when the world is looking to phase out dirty energy. “It’s just a simple, straightforward engineering capability that the Chinese have that has been lost in the rest of the world,” said Jim Lennon, managing director for commodities strategy at Macquarie, an Australian bank. “The Chinese have this overwhelming competitive advantage now that can’t really be addressed.”….

Excerpts from Jon Emont, China Is Winning the Minerals War, WSJ, June 19, 2024

The Real Price for ‘Green’ Energy

Leave a reply

Civilization would not exist were it not for miners. Every year the world’s oldest industry supplies hundreds of megatons of the primary metals and minerals that are essential to all subsequent industries—from medical devices to kitchen appliances, aircraft, toys, power plants, computers and cars. Hence it’s consequential when the governments of Europe and the U.S. implement policies requiring that global mining expand, and soon, by 400% to 7,000%. Those policies are meant to force a transition away from the oil, natural gas and coal that supply 80% of global energy. But it’s an unavoidable fact that building the favored transition machines—wind turbines, solar panels, electric cars—will require astonishing quantities of minerals to produce the same amount of energy.

The other challenge involves people. Mining has always been as much about people as it has about geology, technology and money. In “The War Below: Lithium, Copper, and the Global Battle to Power Our Lives,” Ernest Scheyder highlights the myriad difficulties faced by the people who build mines, as well as those hurt by or opposed to them. As Mr. Scheyder notes, mining is “dirty work.” That’s no invective; it’s just reality…He focuses on the social and political dynamics that accompany big mining projects because, as he writes, there’s “no way around the fact that mines are gargantuan creations that maim the Earth’s surface.” He makes clear that his goal isn’t to question the need for more mines but to understand “whether these lands should be dug up in an attempt to defuse climate change,” especially when some lands are considered sacred by their neighbors and inhabitants.

Excerpts, ‘Mark P. Mills, The War Below’ Review: Digging for Minerals, WSJ, Mar. 3, 2024

When Lakes Become a Soup of Minerals: the Fate of Great Salt Lake

Leave a reply

In the summer 2024, a California startup plans to start construction on a project to suck up water from the Great Salt Lake, Utah, United States to extract one of its many valuable minerals: lithium, a critical ingredient in the rechargeable batteries used in electric vehicles. The water will then be reinjected back into the lake, which Lilac Solutions says addresses concerns about the damaging effects of mineral extraction. At its peak, Lilac says it will use a series of pipes to suck up 80,000 gallons of water a minute to harvest the mineral. The company plans to eventually produce up to 20,000 tons of battery-grade lithium a year.

The effort is one of dozens of projects across the U.S. racing to build up a domestic supply of lithium and other battery minerals as the Biden administration is dedicating billions of dollars to strengthening the U.S. battery supply chain and reducing reliance on China, which dominates the global production of battery minerals.

One common extraction method of lithium pumps briny underground water into vast man-made ponds, where evaporation separates lithium from other elements over 18 months or more. Mining companies in Chile and elsewhere have used the approach, which drains scarce water resources and can leave deposits of toxic residues.

Lilac says its technology is much faster, taking a matter of hours from the time of extraction, while preserving water levels. Its method deploys reusable ceramic “beads” that attach to lithium atoms to separate them from the brine.

At the Great Salt Lake, mineral extraction is nothing new. The lake has been shrinking for decades because of agricultural, industrial and other diversions of its feed waters. Extraction of minerals accounts for about 13% of its water diversion, according to a 2019 study. Meanwhile, the lake has become a concentrated soup of minerals, since it doesn’t have an outlet that lets it discharge the ones that flow into it.

Scott Patterson, The Great Salt Lake Is Full of Lithium. A Startup Wants to Harvest It, WSJ, Feb. 12, 2024

Economic Consequences of Falling Asleep on Wheel: the Geopolitics of Energy Transition

Leave a reply

American officials see Africa as helping to solve two problems. The first is a global shortfall in the minerals that will be needed if the world is to meet its climate goals.The second problem, at least for the West, is China’s outsized influence on supply chains. China refines 68% of the world’s nickel, 40% of copper, 59% of lithium and 73% of cobalt, according to a report in July by the Brookings Institution, an American think-tank. “China has had free rein for 15 years while the rest of the world was sleeping,” says Brian Menell, chief executive of TechMet, a minerals firm.

America views cobalt, which is used in batteries, as a cautionary tale. In Congo, the source of about 70% of global production, Chinese entities owned or had stakes in 15 of 19 cobalt-producing mines as of 2020. America’s decision to allow a US firm to sell one of Congo’s largest copper-cobalt mines to a Chinese one in 2020 is seen in Washington as an enormous act of stupidity. It is little comfort that battery-makers are trying to use less cobalt, in part because of concerns about operating in Congo. “We cannot allow China to become an OPEC of one in critical minerals,” says an American official, referring to the oil cartel.

It is possible to identify three strands in America’s approach. The first is a multilateral effort involving Western allies. In June, Jose Fernandez, America’s under-secretary of state for economic growth, energy, and the environment, launched the Minerals Security Partnership, whose 13 members include all the G-7 countries and the EU. Many of these countries are also looking to secure more scarce rocks. Britain launched a “critical minerals strategy” in July 2022 and later this month the European Commission will propose a Critical Raw Materials Act.

A second strand in America’s approach involves its development agencies “de-risking” projects as they have done in, say, agriculture or the power sector. As well as the us Export-Import Bank, which offers trade-financing, there is the International Development Finance Corporation (DFC)... Another potential success is a memorandum of understanding signed by America, Congo and Zambia in January. America says it will help Africa’s two largest copper exporters do more than just sell the metal in its elemental state. Under it, America agreed to help the two African countries build supply chains to process their raw minerals into battery precursors for electric vehicles.

Excerpts from How America plans to break China’s grip on African minerals, Economist,  Mar. 4, 2023

Mining the Earth to Save it

Leave a reply

The rush to secure green-energy metals is bringing new life to one of the world’s oldest mining hubs. Like the United States, Europe is worried that it is too reliant on China for supplies of once-obscure natural resources, such as lithium and rare-earth metals, that are seen as climate-friendly successors to oil and gas…. 

On both sides of the Atlantic, one of the best answers to long-simmering worries about green-energy security is to look north…, for example, to the “Canadian Shield,” a vast band of rock encircling Hudson Bay. The “Baltic Shield” that stretches across Scandinavia to western Russia is similarly mineral-rich. It helps explain why Sweden in particular has such a long mining heritage. In the mid-17th century, the country’s “Great Copper Mountain” near Falun provided two-thirds of the world’s copper. Even today, 80% of iron ore mined in the EU comes from a site near the Arctic town of Kiruna that Swedish state operator LKAB has exploited for well over a century.

The energy transition is an opportunity for Sweden’s mining complex. LKAB said in January 2023 that it had identified Europe’s largest body of rare-earth metals close to its existing Kiruna operation…Digging up the planet to save it is an awkward pitch. The only way for miners to counter accusations that they are adding to the problem they want to solve is by decarbonizing operations. Here Sweden is again helped by the geology of the Baltic Shield, whose river valleys are favorable for green-energy production. Roughly 45% of the country’s electricity comes from hydroelectric power, with much of the remainder provided by nuclear and wind. It is also cheap, particularly in the Arctic, where many mines are located. Against a favorable geopolitical backdrop, the biggest risk for investors is political. Mines, which can bring a lot of noise and relatively few jobs to an area, don’t tend to be popular locally.

There is a reason the West relies on autocracies for a lot of its oil.

Excerpts from Stephen Wilmot, For Mining EV Metals, the Arctic Is Hot, WSJ, Feb. 14, 2023

After the Oil Shock, the Metals Shock: fueling the green economy

Leave a reply

Indonesia banned exports of nickel ore in 2020 in a bid to capture more of the metal’s value. As a result, exports of Indonesian nickel products were worth $30bn in 2022, more than ten times what they were in 2013. Nickel smelters have sprouted around the country, and makers of batteries, in which the metal is a key component, are building factories. On January 17, 2023 a cabinet official said the government was close to sealing deals with the world’s two largest makers of electric vehicles (EVS), Tesla and BYD, to build cars in Indonesia. Flushed with progress, the government is now thinking beyond nickel.

“This success will be continued for other commodities,” said Joko Widodo, Indonesia’s president, in December 2022. He confirmed that an export ban on bauxite, the ore used to make aluminum, was coming in June 2023. The bauxite industry is scrambling to prepare itself for the shock….The government has suggested that a ban on copper exports could be implemented next, with bans on tin and gold exports to follow.

The country’s pulling power in the global nickel market will be hard to replicate, though. Indonesia produces 37% of the world’s nickel. But its bauxite, gold and copper production is less than 5% of the global total…Bauxite smelters are also expensive and harder to build than nickel smelters. Local firms are struggling to raise the capital needed for them, often around 18trn rupiah ($1.2bn)…All the eight bauxite smelters are under construction are Chinese investments. . 

Indonesia’s resource nationalism also risks falling foul of global trade rules but Jokowi, Indonesia’s president  remains  undeterred. “This is what we want to do: be independent, independent, independent,” he said.

Excerpts from Indonesia’s Industrial Policy: Full Metal Jacket, Economist,  Jan. 28, 2023

When Others Do our Dirty Work: the Costs of Overdependence

Leave a reply

China is tightening its grip on the global supply of processed manganese, rattling a range of companies world-wide that depend on the versatile metal—including the planet’s biggest electric-vehicle makers.

China produces more than 90% of the world’s manganese products, ranging from steel-strengthening additives to battery-grade compounds. Since October 2020, dozens of Chinese manganese processors accounting for most of global capacity have joined a state-backed campaign to establish a “manganese innovation alliance,” led by Ningxia Tianyuan Manganese Industry Group, setting out in planning documents goals and moves that others in the industry say are akin to a production cartel. They include centralizing control over supply of key products, coordinating prices, stockpiling and networks for mutual financial assistance.

The squeeze sent prices soaring in metal markets world-wide, snagging steelmakers and sharpening concern among car makers. China’s metal industries already dominate the global processing of most raw materials for rechargeable batteries, including cobalt and nickel. Three-quarters of the world’s lithium-ion batteries and half of its electric vehicles are made in China.  High-purity forms of manganese have increasingly become crucial for battery-powered automobiles, touted by Volkswagen AG and Tesla Inc. in recent months as a viable replacement for other, more-expensive battery ingredients….

While manganese ore is relatively abundant around the world, it is almost solely refined in China. Battery-grade manganese is traded mostly privately, and pricing can be opaque. Miners say a metric ton of the purified metal could cost up to $4,000—barely a 10th of the cost of cobalt, a widely used battery metal. By replacing cobalt, manganese could help auto makers produce 30% more cars with the same amount of nickel, analysts say.

Rival manganese projects outside China view the cartel-like activities as an opportunity to gain momentum for their own battery-grade developments…Still, analysts say such projects outside China might take years to start and heavy cost investments to develop. Viable bases of manganese ore are often located in remote regions, which require expensive infrastructure to ferry and process extracted ores.

Excerpt from Chuin-Wei Yap, China Hones Control Over Manganese, a Rising Star in Battery Metals, WSH, May 21, 2021

The Geo-Economics of Rare Earth Minerals

Leave a reply

Greenland is rich in rare-earth minerals, and the superpowers want them…These 17 elements are used in  all things electronic. The renewable-energy revolution will also rely on them for power storage and transmission. On the darker side, weapons—including nuclear ones—need them too.

A new open-pit mine at the top of Kuannersuit, a cloud-rimmed mountain near the settlement of Narsaq in the south of Greenland may be rich in rare earth. So believes Greenland Minerals, an Australia-based company, which has been angling for the excavation rights for the past decade.

Greenland’s environment ministry has given a tentative go-ahead. A majority of parliamentarians have already declared themselves in favor of digging. In early February 2020, the townsfolk of Narsaq will hear representations from the island’s government. In Greenland, Urani Naamik (“No to Uranium”), a community lobby, has strong support. Nobody wants (mildly) radioactive dust, an inevitable by-product of mining. Many worry about the waste—a sludge of chemicals and discarded rock fragments—that mining would leave on top of the mountain.

The bigger long-term issue is who gets the mine’s spoils. Shenghe, a Chinese conglomerate, is the largest shareholder in Greenland Minerals. The Danish government, in a frenzy of Atlanticism, earlier managed to stop Chinese companies from investing in the expansion of two airports on the island. Will it preserve Greenland’s rare earths for NATO?

Cloud mining: In search of Greenland’s rare earths, Economist, Jan. 16, 2021, at 41