The trade war has intensified since Washington raised tariffs on Chinese products in early May. It is now coupled with a technological war: the Trump administration has banned American companies from selling technology to Huawei, the world's second largest smartphone manufacturer, jeopardising the crucial supply of microchips to the Chinese.
Faced with Trump, Chinese official media and politicians are now agitating the threat of a reduction in rare earth exports to the United States - which could deprive Washington of a crucial high-tech resource. China accounts for more than 90% of the world's production of this group of 17 metals, which are essential to cutting-edge technologies and are found in smartphones, plasma screens, electric vehicles and also in armaments.
It was just over a month ago that a meeting organized by the Mineral Intelligence Benchmark was quietly held in Washington, DC. Mining companies, regulators, congressional and senate officials and industry representatives were invited. On the agenda of this meeting, one of the hottest topics was the supply of raw materials, especially rare earths and minerals. Among the industrialists, Tesla, the leading American manufacturer of electric vehicles, is sounding the alarm on the risk of an imminent shortage of minerals to manufacture its batteries and cars.
It should be pointed out that these latest-generation electric vehicles use twice as many rare metals as an ordinary car with an internal combustion engine. To manufacture the 130 million electric vehicles planned between now and 2030, three million tonnes of copper, more than one million tonnes of nickel and 260,000 tonnes of cobalt will have to be found. On the digital industry side, the situation is no better where Google and Amazon's home assistants alone require millions of tonnes of copper and other rare metals for their manufacture.
These are all strategic minerals that are essential to all electronic equipment. « These critical minerals are often ignored, but without them modern life would be impossible. " Katie Bays, co-founder of the consulting firm Sandhill Strategy, said Wilbur Ross, the U.S. Secretary of Commerce, said that the federal government " is taking unprecedented steps to ensure that the United States will not be cut off from these vital materials ». And the minister listed 35 strategic elements including uranium, titanium and rare earths, for which the United States is particularly dependent on foreign countries. For 14 of the minerals listed, " the United States has no domestic production and is completely dependent on imports ", notes the report of the State Secretariat for Trade.
The problem is that most of these minerals come from China. Xi Jinping's empire, in delicacy with Donald Trump, to put it mildly, produces most of the world's rare earths, a collection of 17 metals that are indispensable to advanced technology.
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And in the commercial arm wrestling between China and the United States, Beijing was happy to recall this dependence. On May 22nd, just as Trump was tightening sanctions against Chinese giant Huawei, Xi Jinping quietly went to visit a plant processing these strategic metals; a subtle way of letting the threat of blocking exports loom large.
A week later, the message was even clearer. « If someone wants to use products made from our rare earth exports to hinder China's development, then I think that (...) the Chinese people will be displeased. ", warned an official of the powerful economic planning agency.
On Tuesday, June 4, the threat became more specific. China's powerful economic planning agency held a meeting on a possible " export control "of rare earths. « Experts suggest...we need to strengthen export controls and establish a traceability and review mechanism for the entire rare earths export process.... "said NDRC at the conclusion of the meeting.
What would happen if China carried out its threats? A precedent exists. It dates back to 2010 when, in retaliation for a territorial dispute, Beijing abruptly halted its exports of rare earths to Japan, putting Japan's high-tech companies in great difficulty.
So Washington is thinking about a plan of action. The Trump administration intends to accelerate research, development and deployment of methods for recycling and reusing these strategic minerals, find alternatives, diversify supply and improve extraction, separation and purification processes. In fact, for some of the minerals concerned, the United States has the raw material but not the know-how to make them usable by industry.
Washington also plans to strengthen cooperation and improve international trade in these minerals with its allies. One example is South Korea, which produces 20-30 % of some of the world's rare earths.
The strategic plan also calls for a precise survey of the natural resources available in the country so that they can be exploited. But it also intends to identify less traditional sources of supply, such as extraction from sea water or coal waste. And as it has done with other industries, the government wants to deregulate to speed things up. Finally, the government wants to ensure that it will have the skilled workforce it needs to carry out its project and build a strong national industrial base. Will it have the time?
The threat to rare earths is not limited to the United States. Europe too is extremely dependent on foreign and mainly Chinese imports. The continent is therefore starting to explore its mining potential. An encouraging sign is the discovery of important resources of lithium in Portugal and tungsten in France, in Ariège. Extraction of these resources will pose immense environmental questions. As a sign of the times, at the first Ecological Defence Council held at the Élysée Palace on 23 May, the Minister of Ecological and Solidarity Transition François de Rugy outlined a project to reform the mining code that should be in place by the end of the year.
With AFP
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