China’s increasing dominance not only has ramifications for the mining industry but, given the minerals' significance to modern business and technology, also plays a key role in the ongoing China-US trade war.
In response to China’s export-led growth model, in which critical minerals constitute a significant part, the US has increasingly implemented measures to attempt to decouple itself from China’s economy.
TS Lombard’s Jon Harrison says that, while China rarely used to leverage its dominant position in the critical mineral supply chain for geopolitical ends, since 2017, it has “gradually tightened its control over rare earths and other critical minerals, imposing licensing and regulatory requirements, limiting foreign companies’ access to mining, processing and related technology”.
He says that China’s leveraging of dominance in the critical mineral supply chains is in response to US measures to curb China’s access to advanced technologies.
Similarly, Moerenhout notes that, while this plays into the “tit-for-tat games of trade restrictions” between China and the US, its dominance also allows Chinese companies the ability to push down prices and reduce competition of companies outside of China to levels that are economically unsustainable for other businesses to operate at.
Moerenhout adds that the export restrictions have accelerated over the past year, expanding not just from restrictions on the semiconductor industry but also in the battery supply chain and national security supply chains such as those for the valuable semi-metal antimony.