Rare Earths and Metals: China's Fatal Weapon in Economic Warfare

DFrom the smartphone that we always have at our fingertips, to wind turbines, from electric cars that will run on all our roads to the satellites that guide us, from medical devices that improve our health to the connected objects that surround us, from robots to nanotechnology, all these products have a strange matter in common. Or more precisely several materials with unpronounceable names. Rare metals, extraordinarily difficult to extract from their gangs of rocks. These metals exist everywhere on the planet but their extraction has a colossal and unacceptable cost: pollution and damage to workers' health. Our western societies have therefore abandoned the extraction of these precious metals for decades. China, almost alone, has taken an interest in them, less concerned than we are about environmental issues. As a result, the Middle Kingdom holds up to 99 % of the rare metals market. And can blow the storm there. When China wants it, we could be deprived of electronic devices overnight. 

 

Scandium, Yttrium, Lanthanum, Cerium, Praseodymium, Neodymium, Promethium, Samarium, Europium, Gadolinium, Terbium, Dysprosium, Holmium, Erbium, Thulium, Ytterbium, Lutecium... You want more? Here is Antimony, Tungsten, Thorium, Silicon... These rare metals form a coherent set of about thirty raw materials whose geological characteristic is to be associated, in nature, with very abundant rocks and metals. As their name indicates, these metals are extraordinarily rare. In order to extract one gram of them, tons and tons of rocks have to be purified. If you want to obtain a one-kilo bag of gallium, you will have to handle fifty tons of rocks. For some metals such as lutetium, it is one thousand two hundred tons of rock that you will have to purify before you can obtain one kilo of precious material.

 

Why go in search of such rare and difficult to extract materials? Because they are the very best of what billions of years of Earth's evolution can offer us. A tiny dose of these metals can, for example, emit a magnetic field unlike that produced by coal or oil. Their quality is therefore obvious: they emit virtually no CO2 and are therefore attractive to all so-called "green" industries. Metals have become central, not only to the electronics industry but also to the ecological and energy transition.

 

However, to say this is to forget or pretend to forget that the production of these rare metals is one of the most polluting industries in the world. In order to extract rare metals from their rock gangue, a refining process that is not refined is required. Tons of rocks have to be crushed and a host of highly aggressive chemicals such as sulphuric and nitric acids have to be used. A long and repetitive process before obtaining a pure concentrate of almost 100 %. To achieve this, needless to say that the impact on the environment is catastrophic: discharges, water poisoning, land contamination, etc. Those who live near these mines and extraction industries suffer from severe pathologies, cancers, fertility, malformations, etc.

 

Our western countries have rare metals in their soils. Sometimes in abundance. In France, several mines existed in the last century. As elsewhere, they have closed. The pressure of ecological organizations has led one by one to the closure of these mines throughout Europe and the United States.

 

The ecological consequences of rare metal mining cast a shadow over the green and digital technologies we are so proud of. For far from being harmless, these technologies contribute, far upstream, to polluting people and the planet. « To make it clean, you have to make it dirty. " wrote Guillaume Pitron in his remarkable book enquête, The Rare Metal War. According to him, the energy and digital transition is a transition for the rich. It depollutes the city centres by offloading on more miserable, remote and especially far away areas, away from our eyes. This is why the West has preferred to transfer the production of rare metals - and their pollution - elsewhere, far, far away.

 

 

Rare earth mine in Nancheng Province, China

 

China is far away. And it's not very concerned about pollution. True, it is changing and is tending to become the leading green power, but is it for the right reasons? Still, in recent decades, the Middle Kingdom has started extracting rare earths and metals. China has done it so well, mobilizing human resources that only it is capable of implementing, that it has rapidly become the world's leading power in the extraction of these vital raw materials. It has the means to do so because the Baotou mine alone, located in Inner Mongolia, holds nearly 40 % of the world's rare earth reserves. It also has the will to do so. Having emerged from decades of stagnation, China, under the impetus of Deng Xiaoping, wanted to take its share of the globalization cake. At the end of the 1970s, it implemented a vast policy of social and environmental dumping to generate competitive advantages over Western countries.

The results of this policy are known. China has become the factory of the world and manufactures, at low prices, all the consumer products that the West needs. But above all, China is becoming the leading producer of the minerals that the globalized world demands to sustain its economic growth. With the digital age and the energy transition, China finds itself sitting on a seam that only it can exploit. With rare earths and metals, it now holds up to 99 % of a market that the Western powers have all abandoned to it.

 

A look back at France in the 1980s. Do you remember Rhône-Poulenc? This company's logo was featured as a sponsor in the credits of the show. Ushuaia of a certain Nicolas Hulot... At that time, the French industrialist was one of the two world leaders in rare metals. At La Rochelle, in Charente-Maritime, Rhône-Poulenc purified eight to ten thousand tons of rare earths annually - 50 % of the world market. France was processing half of the most strategic raw material, the one that would soon condition our digital and energy transition. Guillaume Pitron reminds us that " we had a prodigious chemical know-how, coupled with a remarkable commercial pre-eminence ». But that went, of course, with sprains to the environment. The La Rochelle plant was discharging waste into the sea and was regularly attacked by armies of angry environmentalists. What's more, times were beginning to change. Environmental laws and regulations were getting tougher; the tension was too great. In 1994, the leader at the time, Jean-René Fourtou, threw in the towel. He asked others, especially the Chinese, to produce what was causing him so much trouble. The exploitation of rare earths in France will be finished.

By buying what they used to produce themselves elsewhere at unbeatable Chinese prices, the manufacturer improves its margins and restores its environmental image. Well done! Jean-René Fourtou won't be the only one to make this decision. In the Western world, all industrialists and governments do it. China then reaps one market after another.

 

The West, which prides itself on its modern ecological practices, ships and subcontracts to the ends of the earth what it considers too dirty. As a result, states are abandoning their mineral sovereignty and even more so that of rare metals. In their defence, it must be said that the quantities are derisory. We are talking about a few thousand tonnes. No more than that. The market for rare earths and metals represents no more than 6.5 billion dollars a year. That's 276 times less than the oil market. Not enough to make a world out of it. But what we forget is that the presence of these metals in everything we consume as a somewhat electronic commodity has enormous technological and economic repercussions.

 

It is in this way, on the sly, in the eyes of public opinion and certainly in the eyes of many Western leaders, that China scores points. Beijing produces 44 % of indium (found in our screens), 65 % of fluorspar (used in ceramics and optics), 65 % of graphite (indispensable for producing graphene, which is said to be the material of the future), 71 % of germanium (an ultra-sensitive component of photovoltaic cells and optical fibres) etc., the list is long.

 

China's grip on rare metals is a matter of survival. Indeed, the Middle Kingdom is not only the world's largest producer of minerals, it is also the world's largest consumer of them. For China has become a high-tech power. The Chinese leaders have fully understood that mastering new technologies is the key to the world. The saying that whoever owns the raw material, owns the industry, could not be truer. Beijing is therefore betting on scientific development, encourages the creativity of its people and wants to offer an alternative civilization to that of the West. China is no longer just the world's factory. It makes the most powerful computers on the planet, with a computing capacity of 93 petaflops - a world record -, it makes rockets, goes to the moon and creates dozens of innovation centres all over the country.

By controlling its supply chain, China is years ahead of the rest of the world. In the strategic area of electric cars, China should be able to produce 80 to 90 % batteries for the world's vehicles by 2020. 

 

As innovations emerge, the need for rare earths and metals will become even more pressing. The demand for resources to manufacture wind turbines, car batteries, electronic objects, can only increase exponentially. Analysts estimate that by 2050, in just one generation, we will have extracted as much metal from the planet's soil as in the 70,000 years before us.

 

Is it conceivable that China will start to increase its production to quench the world's thirst for rare metals? Nothing is less certain. Having banked on technological and scientific development, it cannot risk limiting its own needs. Moreover, China's almost total share of the rare metals market gives it a means of suffocating all its competitors. Guillaume Pitron is clear: "The company has a means of asphyxiating all its competitors. Beijing will promote the interests of its green technology industries and support the growth of its energy and digital transition to the detriment of others.s. "The Chinese have their hand on the cost slider for these precious materials. If competitors were to come along, all they would have to do would be to drop the prices to suffocate any competition.

 

So what to do? Re-open the rare metal mines? Experts say that this cannot be done in a snap of the fingers. It takes ten to twenty years to bring production on stream. For countries with a mining tradition, such as France, " sleeping mining giant ", it might be possible. Guillaume Pitron states in his book that the President of the Republic Emmanuel Macron would be in favour of reopening the mines in order to ensure our sovereignty over such strategic supplies. Needless to say, environmental organizations are against it. And the controversy promises to be violent.

 

There are two possibilities left to save the West from the Chinese stranglehold: the sea and space.

For those of our nostalgic compatriots who mourn the end of the colonial empire, we must tell them that France is the second largest territorial power in the world. Thanks to our ultramarine territories, our hold over the oceans is considerable. Indeed, in recent years Paris has successfully pursued a policy of extending its maritime territory by promoting the Geneva Convention of 1958.

Yet the seabed abounds in rare metals. This is a technological, scientific but also ecological challenge that will have to be overcome.

 

Looking up into space, the promises are just as grandiose. An asteroid passed not far from Earth in 2011. Scientists took a close look at this rock, named after the pretty name UW-158. It contained rare metals worth 5 trillion euros. Much more than the planet needs. This prospect stirs up lust. Barack Obama was one of the first, along with little Luxembourg, to sign a revolutionary text that recognizes to every individual "... the right to life. the right to possess, appropriate, transport, use and sell any space resource "

It is therefore hardly surprising to see this effervescence of new entrants, especially those from Silicon Valley, such as Elon Musk, in the conquest of space, the new Eldorado.

 

 

 

Read : Guillaume PitronThe Rare Metals War, The Hidden Face of the Energy and Digital Transition, The Ties That Free, 2018

 

Header image : Huaibei mine in China picture : ©BELGA/Chen Banggan/ChinaFotoPress