China’s warning shots with minerals that run the world

China recently unveiled restrictions on the export of antimony, a critical mineral vital for military applications, set to take effect on September 15. This decision is part of a broader strategy in which China leverages its control over critical minerals as a strategic tool for enhancing national security and exerting influence in global affairs.

Background

• Export Restrictions: The 2010 incident involving the collision between a Chinese trawler and Japanese Coast Guard vessels near the disputed Senkaku/Diaoyu Islands showcased China’s strategic use of export restrictions. In response to heightened tensions with Japan, China halted the export of rare earth minerals, which are essential for various high-tech industries. This action underscored China’s willingness to leverage its dominance in critical resources as a geopolitical tool, sending shockwaves through the global community and raising awareness of the potential risks associated with relying on China for key materials.
• Global Concerns and Lessons: The rare earth export ban not only exacerbated the existing territorial dispute between China and Japan but also served as a stark warning to the rest of the world. The incident highlighted the vulnerabilities of global supply chains and the geopolitical power that China wields through its control over essential resources. Nations worldwide began to reassess their dependence on Chinese mineral exports, realizing that similar restrictions could be imposed in future conflicts. This event catalyzed efforts to diversify supply chains and reduce reliance on a single dominant supplier, marking a significant shift in global resource security strategies.

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Countermoves and Escalation

• Export Control of Advanced Semiconductors (2023): In 2023, the Netherlands, under pressure from the United States, decided to impose restrictions on the export of advanced semiconductor manufacturing equipment to China. In response, China retaliated by announcing curbs on the export of critical minerals such as gallium and germanium, both essential for the production of solar cells and computer chips. This exchange signaled a tit-for-tat strategy in the ongoing economic confrontation between the two nations.
• Export Controls on High-Tech Sectors: The United States implemented stringent export controls on “advanced computing, semiconductors, and semiconductor manufacturing equipment,” effectively restricting China’s access to these vital technologies. In retaliation, China imposed restrictions on the export of high-purity, high-hardness synthetic graphite and natural flake graphite—materials that are crucial for electric vehicle (EV) batteries, fuel cells, and nuclear reactors. By targeting these minerals, China aimed to disrupt the supply chains essential for green energy and high-tech industries.
• Restrictions on Antimony: On August 15, 2024, China announced export restrictions on antimony, a critical mineral for strategic sectors such as defense, particularly for military equipment like missiles, infrared flares, and nuclear weapons. Citing national security concerns, this move was part of China’s broader strategy to leverage critical minerals as a tool in global geopolitics.

Why is China Banning Exports of Critical Minerals?

China controls the major supply chain of Rare and Critical earth materials. China controls 60% of rare earth production, 60% of critical minerals, and 80% of processing globally.

• Shift in Policy: Earlier, China’s approach to critical minerals was primarily about deterrence—signalling that it could restrict access to these resources if tensions escalated. However, this strategy has now evolved into an explicit policy of weaponization.  China has normalised the use of its dominance over critical minerals as a leverage tool in global geopolitics to influence international relations and counter external pressures.
  • Global Impact: The reliance and dependence of many states like the European Union, India, Japan, and the U.S. on Chinese minerals raises significant concerns.
• Strategic Dependency: China is leveraging its dominance in critical minerals to remind Western nations of their reliance on Chinese resources. This serves to assert its power in the global supply chain, illustrating how it can pressure and isolate these nations.
• Disruption of Alternate Supply Chains: By restricting its exports, China aims to prevent Western nations from establishing their own sources for critical minerals. This strategy is designed to stop these countries from developing independent mining and processing operations that could reduce their reliance on Chinese resources.

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India’s Position

• India’s Reliance on Critical Minerals: India is heavily dependent on imports of critical minerals such as lithium, nickel, cobalt, and copper, with expenditures reaching approximately ₹34,000 crore in FY23. This dependency highlights the country’s vulnerability to potential supply disruptions, particularly as the global demand for these minerals is expected to rise in the future. Such reliance poses significant risks, especially in the context of geopolitical tensions that could affect supply chains.
• Need for Strategic Partnerships: The recent ban on antimony by China serves as a crucial wake-up call for India. It emphasizes the urgent need for the Indian government to establish strategic partnerships with like-minded countries. By collaborating with other nations, India can enhance its access to critical minerals and secure more stable supply chains. This collaborative approach will not only diversify India’s sources but also strengthen its position in global mineral markets.

Conclusion

To effectively address these challenges, the Indian bureaucracy must adopt a proactive rather than a passive stance. This includes prioritizing the development of alternative supply chains that reduce dependence on single sources. By investing in domestic mining capabilities and exploring new partnerships, India can enhance its resilience against future disruptions. Fostering innovation and technology transfer in critical mineral extraction and processing will be essential for achieving long-term sustainability in this sector.

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