Access to the raw materials of the new green economy is increasingly a high-stakes chess match along geopolitical lines dividing the East and the West. China controls access to the bulk of raw and midstream materials that the world needs for its transition to a low-carbon intensity economy. This control has become a critical vulnerability in the Western world’s emerging Industry 4.0 supply chains.
The mechanics of the emerging green economy rely on carbon friendly modes of transport such as electric vehicles, as well as mobile technology, energy storage, rapid adoption of artificial intelligence (AI) technologies fueling increased computing power, and renewable power sources — all made from mined materials such as nickel, cobalt, manganese and lithium.
China’s drive to become the dominant commodity superpower started in the 1990s when it started opening up its economy to the world. The central government mandated unprecedented infrastructure spending, prompting the start of the commodity supercycle that lasted until late in the 2000s. In turn, the enormous demand for raw materials sparked a mining investment boom.
China does not have abundant domestic sources of minerals. During its infrastructure boom, the government quickly realized that, for the country to control its own destiny, it would have to secure and control the sources of these raw materials elsewhere.
At the time, sourcing the most important commodities like zinc, aluminium, bauxite, iron ore, copper and metallurgical coal from established open markets sources, was straightforward. However, that was not true for scarcer materials such as cobalt and nickel used in specialist industries.
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