The Telegraph: China's dominance of strategic minerals is as dangerous to Europe as Russia's energy weapon

Europe realized very late the state of global competition for important resources, and a report in the British newspaper "Telegraph" said that European leaders are increasingly concerned that the European Union is reducing its dependence on Russian fossil fuels only, to find itself dependent to the same extent on supplies of strategic minerals. controlled by China.

The report quoted European Commission President Ursula von der Leyen as saying - during the World Economic Forum in Davos - "The economies of the future will no longer depend on coal and oil, but on lithium for batteries, silicon metal for chips, and sustainable rare-earth magnets for electric cars and wind turbines."

She added, "Green and digital transformations will greatly increase our need for these materials. However, obtaining them is not easy given the dependence on a handful of producers in the world for these materials," stressing the importance of "avoiding falling into the same trap as happened with oil and gas." ".

Strategic minerals in the hands of China

The report indicated that it may already be too late to prevent a chronic supply crisis in the 1920s;

According to the International Energy Agency, China controls half of the world's lithium refining capacity, and produces 3 quarters of all lithium-ion batteries.

China is strategically acquiring rare earth minerals used in the high-tech industry, not only for green energy and artificial intelligence, but also for military lasers, missiles and satellites.

Beijing quickly dominates the global supply of cobalt and graphite, and more than 98 percent of permanent magnets come from China.

Lithium carbonate prices are up about 10 times this year, cobalt has surged 150%, while nickel futures have doubled.

The "cathode materials" used to make electronic car batteries have jumped from 5 to 20% of total cost in less than a decade.

NATO Secretary-General Jens Stoltenberg issued equally stark warnings in Davos about the dangers of over-reliance on China, especially after Russia's war on Ukraine exposed the dangers of free trade with forces he described as hostile, noting that the Nord Stream 2 pipeline disaster should not be repeated. Related to dealings with Beijing, according to a Telegraph report.

According to the report, Stoltenberg acknowledged that free trade has brought a lot of prosperity and wealth to everyone, but it has a price. "Freedom. NATO's technological superiority has always been fundamental to our security. Today we're seeing new and disruptive technologies being incorporated into all new weapons systems, so if we share that technology alone we can make some money, but that's dangerous."

green energy plan

The European Union is pursuing its ambitious green energy goals by replacing all Russian gas imports under the €200 billion post-war energy plan, raising the renewable energy target to 45% of total energy supply by 2030. Planning permits will also be accelerated to expire. Within one year instead of waiting 7 or 8 years.

Over the next eight years, Europe aims to double solar energy production to 600 GW, mostly on rooftops, and double wind energy production to 480 GW, in addition to producing 30 million electric cars.

"All of this requires a huge amount of critical minerals and a complex global supply chain that almost completely exceeds the strategic scope of the European Union, and it must do so while it is in competition with China, which is working to supply its economy with electricity at a faster pace," the Telegraph report comments.

According to the report, the head of the Chinese government network Zhigang Zhang said in Davos that his country is making epic efforts to expand renewable energy, which is the central driver along with nuclear energy, in a plan to break dependence on seaborne energy imports and develop safer domestic sources.

The report quoted Daniel Yergin, an energy expert at IHS Market, as saying that the mystery lies in where the world will find these quantities of copper to promote the "electrification" process.

The report notes that Europe has caught up too late to the global race for biomaterials, and will find itself at the bottom of the rankings as supply dwindles.

He added that although Brussels is trying to launch big plans and create all kinds of alliances, it may struggle to achieve the goals of its green deal.

Some liken Europe's new tendency to collectively buy supplies - first vaccines, then natural gas, now minerals - to the Soviet centralization of the economy, all in the name of rational efficiency, the report said.

"This may beat the average price, but the EU could easily overlook the main imperative in this process, which is that such a quick response carries risks," he added.