China is launching a global cooperation initiative on green minerals with developing nations as it looks to consolidate its dominance in rare earth elements and other critical minerals.
At the G-20 summit in South Africa, Chinese Premier Li Qiang launched an “international economic and trade co-operation initiative on green minerals” while defending China’s current curbs on exports of rare earths.
The alliance is expected to include China and more than a dozen other nations including Zimbabwe, Cambodia, Nigeria, and Myanmar – holders of rare earth elements, alongside the UN Industrial Development Organization.
China will “promote mutually beneficial cooperation and peaceful use of key minerals,” its premier said, as carried by Bloomberg.
Beijing plans to “safeguard the interests of developing countries, while prudently addressing military and other uses,” the second-highest ranking Chinese official said.
“Li urged efforts to strengthen cooperation on green energy and advance a just transition,” Chinese news agency Xinhua reported.
The premier “called for promoting global cooperation in the green industry, keeping industrial and supply chains stable and unimpeded, and facilitating the free flow and application of related technologies and products.”
The Chinese announcement of an alliance comes as the U.S. looks to rally Western allies to counter China’s dominance in critical minerals.
The Trump Administration is ensuring funding through buying minority stakes in North American rare earth and lithium companies and projects, while companies in the U.S. and Europe are setting up alliances with miners and refiners to have magnet supply chains outside and independent of China.
The rare earth supply chain is among the most highly concentrated across all stages of the value chain, analysts at the International Energy Agency (IEA) wrote in a commentary last month.
Last year, China held a 59% share of the mining of rare earths, 91% in refining, and a whopping 94% in magnet manufacturing, the agency estimates.
China has significantly strengthened its position in the manufacturing of rare-earth-containing permanent magnets. Two decades ago, China accounted for around 50% of the production of sintered permanent magnets commonly used in cars, wind turbines, industrial motors, data centers, and defense systems.
“This share has risen significantly to 94% today, making China the world’s single largest supplier of the component critical to the manufacturing of the most powerful motors that are used for many cutting-edge applications,” the IEA’s analysts said.
By Tsvetana Paraskova for Oilprice.com
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