In today’s interconnected world, control over critical minerals has become a strategic asset, and no country understands this better than China. With a calculated approach, China has positioned itself as the dominant player in the global supply chains for various critical minerals, shaping markets and influencing global industries. In this article, we’ll delve into China’s rise to power in the mineral market, their strategic control over key minerals, and the implications of their recent moves, particularly concerning antimony and tungsten.
China’s Dominance in the Global Mineral Market
China’s journey to becoming a mineral giant didn’t happen overnight. It was a meticulously planned strategy that saw the country evolve from a major consumer to a dominant producer and exporter of critical minerals.
The Rise of China as a Mineral Powerhouse
China’s ascension in the global mineral market began in the late 20th century, during its rapid industrialization phase. With a growing economy and increasing demand for raw materials, China started to focus on securing its supply of essential minerals. By investing heavily in mining operations and developing strategic partnerships, China gradually gained control over some of the world’s most crucial mineral reserves.
Key Minerals Under China’s Control
Among the critical minerals that China dominates, rare earth elements, tungsten, and antimony stand out. These minerals are indispensable for various industries, including electronics, defense, and energy. China’s control over these minerals has given it significant leverage in global supply chains, allowing it to influence markets and policies worldwide.
China’s Role in Global Output of Critical Minerals
China’s impact on the global output of critical minerals cannot be overstated. The country not only possesses vast reserves but also has the infrastructure and technology to process and refine these minerals at a scale unmatched by any other nation.
Tungsten: A Case Study
Tungsten, often overshadowed by more famous minerals like gold or copper, is one of the most critical minerals in the modern world. It’s essential in industries ranging from aerospace to electronics, thanks to its unique properties, including a high melting point and exceptional hardness.
China’s Contribution to Global Tungsten Production
China is the world’s largest producer of tungsten, accounting for over 80% of global output. The country’s dominance in tungsten production is not just due to its rich reserves but also its well-developed mining and refining capabilities. Chinese companies have perfected the art of extracting and processing tungsten, making it a critical player in the global market.
Strategic Importance of Tungsten
Tungsten’s strategic importance cannot be understated. It’s used in the production of hard metals, high-temperature resistant alloys, and even in military applications like armor-piercing ammunition. As industries worldwide continue to innovate and develop new technologies, the demand for tungsten is expected to rise, further solidifying its importance in the global economy.
Historical Restrictions and Their Impact on Global Supply Chains
China’s control over critical minerals has not been without controversy. Over the years, the country has implemented various restrictions on the export of these minerals, leading to significant disruptions in global supply chains.
China’s Restrictive Policies on Rare Earth Elements
One of the most notable examples of China’s restrictive policies was its control over rare earth elements in the early 2010s. By limiting exports, China caused a supply crunch that sent shockwaves through industries reliant on these minerals, including the tech sector. This move was a wake-up call for the world, highlighting the risks of over-reliance on a single source for critical materials.
Impact on the Global Technology Industry
The restrictions on rare earth elements had far-reaching consequences, particularly for the technology industry. Companies that relied on these minerals for manufacturing components like smartphones, batteries, and renewable energy systems found themselves scrambling to secure alternative supplies. The price volatility and supply uncertainties forced many companies to reevaluate their supply chain strategies and explore new sources or recycling options.
Recent Antimony Restrictions: A New Phase in Control
China’s recent move to restrict antimony in the second half of 2024, citing environmental concerns and the need to ensure domestic supply, has sparked concerns about the potential for similar restrictions on other minerals, including tungsten.
This move has been viewed by many as part of China’s broader strategy to maintain its dominance in critical mineral markets while exerting pressure on global industries that depend on these materials.
The Potential for Future Restrictions on Tungsten
Given China’s history of using export restrictions as a tool for strategic advantage, there is growing speculation about whether tungsten could be next. The potential for restrictions on tungsten could have serious implications for industries worldwide, especially those in advanced manufacturing and defense.
What Could Trigger Tungsten Restrictions?
Several factors could trigger restrictions on tungsten, including geopolitical tensions, environmental concerns, or a strategic decision by China to prioritize domestic needs over international markets. If China were to limit tungsten exports, the ripple effects would be felt globally, causing price spikes and supply shortages that could disrupt industries from aerospace to electronics.
Global Implications of Tungsten Supply Chain Disruptions
A disruption in the tungsten supply chain would have significant consequences for global industries. Manufacturers would face higher costs, potential production delays, and the need to find alternative sources of reliable supply. Countries heavily reliant on Chinese tungsten could be forced to invest in new mining projects or increase recycling efforts to reduce their dependence on imports. One company at the forefront of pushing a shift to secure and derisk tungsten supply is Tungsten Metals Group who own and operates the largest ferrotungsten factory outside of China. Tungsten Metals hopes to provide a safe and reliable alternative to Chinese tungsten and position itself as a favourable alternative for major industries relying on such an unstable supply chain largely controlled by adversarial China.
As China’s influence over critical mineral supply chains continues to grow, the world faces a challenging dilemma. While the global economy relies heavily on these materials for technological advancement and industrial growth, the risks associated with China’s control cannot be ignored. The recent restrictions on antimony and the potential for similar actions on tungsten underscore the need for diversified supply chains and strategic resource planning. The future of global supply chains will likely be shaped by how countries and companies navigate these challenges in an increasingly interconnected and competitive world.
