Hong Kong: Western countries are trying to catch up with China in the race to acquire critical minerals after the former acquired the first movers’ advantage.
Critical minerals such as copper, lithium, nickel, cobalt and rare earth elements are essential components in many of today’s rapidly growing energy technologies, including wind turbines, electricity networks and electric vehicles, according to International Energy Agency (IEA).
Last month, China was left fuming after the Justin Trudeau government ordered three firms to exit critical minerals deals with its companies, citing national security concerns.
“China urges the Canadian side to stop suppressing Chinese companies. We call for a fair, just and non-discriminatory environment for Chinese companies doing business in Canada,” Chinese Foreign Ministry Spokesperson Zhao Lijian’s said during a press conference.
Zhao said the current global minerals industry and supply chains are a result of both the law of the market and the choices of businesses.
“The Canadian side has overstretched the concept of national security and placed arbitrary curbs on normal trade and investment cooperation between China and Canadian companies,” he said.
This decision comes as China continues to dominate the rare earth elements around the world, while the west is pushing towards self-reliance in the procurement of scarce metals and minerals.
China is anticipated to produce 74 per cent of the world’s batteries in 2022, with production in Europe and the US trailing behind at 16 per cent and 7 per cent, respectively, according to The Hong Kong Post.
However, China does not produce a lot of minerals. Instead, it has invested heavily in overseas mines in places like Canada to acquire the raw materials it needs.
The sudden action reflects a negative attitude toward Chinese mining investment, according to a report published in The Hong Kong Post.
This wasn’t the case earlier. Western countries, for years, have neglected the effects that crucial raw resources have on national security, the report adds.
Previously in 2013, Chinese company Tianqi Lithium acquired the Australian Greenbushes mine, containing the highest quality lithium resources, after outbidding its American rivals.
This acquisition was made possible by funding from the government-owned China Development Bank.
According to The Hong Kong Post, such carelessness has allowed China to control the supply of the minerals required for EV batteries, which are essential for the transition to clean energy and the battle against climate change.
The report contends that the West must stop the transfer raw resources to China for processing because it lacks the ability to refine them.
“Dependence on Chinese resources is not only financially unattractive but also jeopardises the West’s strategic independence given the geopolitical competition between China and the West,” according to The Hong Kong Post.
Driven by these very concerns, Western countries led by the US, are reconsidering their industrial policies.