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How China is using its power over the minerals we need every day technology as leverage with the West | World News

Online Niel October 25, 2024

China is a global goliath when it comes to one of the world’s most important resources – critical minerals.

These minerals are essential for making advanced technologies, including smartphones, semiconductors, lithium batteries, laptops and electric vehicles. The list goes on.

China produces 60% of the world’s rare earth supply and processes 90% of it.

It gives the country unparalleled power – power it is willing to use.

Since last July, China has introduced export restrictions on three important minerals: gallium, germanium and antimony.

The US Geological Survey says China produces 98% of the world’s gallium and 60% of its germanium.

Both are used to make semiconductor chips, which power the world’s advanced technologies.

Export controls are the latest frontier in a trade battle between China and the West, and it’s heating up.

The US is trying to block China from accessing its advanced technology and semiconductor chips.

Chim Lee, senior Asia analyst at the Economist Intelligence Unit, says, “This is about how China still feels threatened.”

“It uses essential minerals to have stronger leverage in its trade negotiations with Western countries,” says Mr Lee.

“He’s proving he can and will fight back.”

Mountains and Mines of Yunnan Province

Yunnan province in southern China is known for its mountains more than its mines.

But travel away from the main highways and you find valleys filled with small mines that process critical minerals.

We come across three of them just a short drive from each other on a rainy, foggy day.

Even the nearest village is called “Kuangshan Zhen” or City of Mines.

Opposite a mine, I met a local farmer, Mr. Tan. He tells us that mines are a national asset.

“It means a lot of economic income,” Mr Tan explains. “This mine produces lead, zinc and germanium. They are the treasure of our country.”

China is committed to protecting its treasure and says its export restrictions are “fair, justified and non-discriminatory” and do not target any country.

The country’s most recent export restriction concerns antimony. It came into effect in September.

China mines half of the world’s antimony reserves and is a key ingredient for military applications including night vision goggles, flares and infrared sensors.

“Potential price shocks” follow

The northern British city of Durham feels far removed from the global competition to dominate resources.

But on the outskirts of the city, a pioneering British company called Pragmatic Semiconductor is preparing to expand its manufacturing facility for flexible, wafer-thin semiconductor chips.

Richard Price, co-founder of Pragmatic Semiconductor and its chief technology officer, says: “As countries like China – and others around the world – look at tariffs, protections and export controls, it will cause shocks to the supply chain. supply”.

“We are likely to see potential price shocks.”