Posted on: Thursday 8 October 2020 – 7:00 PM | Last update: Thursday 8 October 2020 – 7:00 PM
The climate crisis and the Fourth Industrial Revolution put the world on a geopolitical collision course. Both the drive to decarbonize and the battle for global technological supremacy depend on critical minerals such as rare earths, lithium, and cobalt – all concentrated in a few places, including China.
Control of supply chains for these elements is increasingly sought after. Tesla’s electric cars, for example, are powered by lithium-ion batteries, but only a handful of countries produce the most lithium in the world. The tension between the geographic concentration of critical resources and the growing global competition for supply will further destabilize the geopolitics of the 21st century.
Thus, a long era of competition for resources is rapidly coming to an end. In the past, empires were confined to economic supply chains, and managed competition. During the long post-1945 decolonization cycle, the United States, as the dominant global economic power, supported global trade rules and standards. Meanwhile, supplies of critical resources – especially fossil fuels – became more widespread, as improved geological information and new technologies (such as deep-sea exploration) helped loosen OPEC’s grip.
Today, however, circumstances are reversed. Minerals critical to the digital and post-carbon economy are highly concentrated geographically, while the end of US unipolarity and increasing global trade uncertainties have stimulated a rush to secure them.
China’s global rise reinforces the tension between competition and geographic focus. Industrial innovation and production are no longer the exclusive prerogatives of the economies of the Organization for Economic Cooperation and Development, particularly the United States, the European Union member states, and Japan. These major powers previously secured important inputs through colonial expansion and resource cuts, but China’s ambitions in terms of exports and its control of major supply chains have changed the game. Moreover, China’s Belt and Road Initiative openly challenges previous models of access and cooperation.
China’s hegemony over resources is reshaping geopolitics. In 2010, China cut its export quotas of rare earths in half, and it was also reported that it had banned its sale to Japan. This episode awakened other leading economies to the fact that a major competitor and adversary controls 97% of the global supply of these vital inputs for magnets, glass, electronics, defense systems, wind turbines, and hybrid and electric vehicles.
The United States, the European Union and Japan have reacted piecemeal, and ten years later they still have not produced strategies to free themselves from the grip of Chinese resources. The rare earth elements hit the headlines in 2019, when China indicated it might “use them as a weapon” in its trade dispute with the United States.
Likewise, decarbonization has given priority to other achievements in battery and storage technology, which is why global lithium production has risen from 32,500 tons in 2015 to 95,000 tons in 2018. Two of the three “lithium triangle” countries are involved in political and economic volatility – Chile. Bolivia – in the Belt and Road Initiative, and they get large Chinese investments, and the third, Argentina, is considering joining the initiative. Since none of them possesses the capacity for vertical integration, China controls more than 60% of the global manufacturing capacity of Li-ion batteries.
Cobalt, another essential component of the battery, is mined extensively in the Democratic Republic of the Congo. The latter has the largest cobalt reserves in the world and produces 60% of the cobalt extracted globally. The country remains the most cost-competitive product, and China is the dominant investor, although protesting labor practices has raised questions about “ethical mining.”
How can rich-country governments best manage the tension between concentration and competition over critical minerals, especially if traditional global institutions are disappearing? One option is to revive the old colonial model of zoning for managing competition. But although China was able to expand its global economic influence without bearing the burden of being a colonial power, the European Union, the United States, and Japan could no longer play this game successfully. Smaller developing countries now have other options and preferences, often siding with China, Russia, India, or other powers.
Alternatively, traditional forces can begin to build a new framework for cooperation. But the “America First” position of US President Donald Trump, and the lack of coordination between former allies, are two factors that stand in the way now. Businesses are also not equipped to give priority to geopolitics over financial considerations.
Repeated calls from governments to shed supply chains hardly achieve anything; Ministers launch a fierce attack on competition, but they do not address the needs and interests of the countries in which the main strategic resources are concentrated. Moreover, climate change will lead to increased austerity, especially in resource-rich regions.
By systematically establishing a global network of partners, China has demonstrated its growing economic strength. The old powers must now build new ways to win the confidence of developing countries and cooperate with them, not only to secure the vital minerals necessary to supply the world with energy in the Anthropocene era, but also because the planet around which the dangers hover is a threat to all.
These were the details of the news Critical Minerals and New Geopolitics – The World Thinks for this day. We hope that we have succeeded by giving you the full details and information. To follow all our news, you can subscribe to the alerts system or to one of our different systems to provide you with all that is new.
It is also worth noting that the original news has been published and is available at saudi24news and the editorial team at AlKhaleej Today has confirmed it and it has been modified, and it may have been completely transferred or quoted from it and you can read and follow this news from its main source.