China dominates critical minerals, and the United States and other countries have reason to be worried about this dominance.
Newsweek reports that “China currently accounts for 60 percent of the world’s rare earth extraction and 87 percent of processing, according to analysis by the Paris-based International Energy Agency.”
The Organisation for Economic Co-operation and Development says that China leads the world in export controls on critical minerals, with “more than 13,000 restrictions.”
The restrictions allow China to manipulate the global market for these minerals, bouncing prices around by dumping or holding back. They are levers that enable the country to push around other countries in need of these minerals and to disrupt competitors who might challenge its dominance.
On September 10, 2024, the House Select Committee on the Chinese Communist Party held a hearing on strategies for obtaining critical minerals in order to reduce our dependence on China. Three industry experts—Ahmad Ghahreman, CEO of Cyclic Materials; Gerard Barron, CEO of The Metals Company; and Kijune Kim, executive vice president of Korea Zinc—spoke about recycling technology and exploiting new sources of critical minerals, particularly the ocean floor.
Self-sufficiency
The executives said that the United States needs to support the industry by providing funding for projects and otherwise helping it to better compete with China, whose government often provides low-cost capital and waives regulatory burdens for Chinese companies. They suggested that it would also be prudent for the U.S. to develop its own stockpiles of critical minerals in order to provide a buffer against the effects of Chinese price manipulation; and that it would be worthwhile to process, use, and eventually recycle minerals all within the U.S., processes which would have lifecycles of potentially hundreds of years.
Representative Rob Wittman (R-VA), who chaired the session, stressed the importance of recycling: “As the adoption of electric vehicles and renewable energy technologies accelerates, so too does the volume of end-of-life products that can be recycled. Currently, less than 1% of rare earth elements are recycled globally, leaving a significant opportunity for expanded U.S. market share.”
Wittman mentioned the Department of Energy’s Battery Recycling Prize as an example of motivating industry to turn goods that have reached end of life into usable metallic inputs. A research program at Defense Logistics Agency has succeeded in obtaining germanium from used night-vision goggles: ten percent of the amount currently needed from China.
With the enormous growth in production of electric vehicles, people have become more interested in what becomes of the expensive batteries that power them after they reach end of life. NPR has reported on American efforts to convert “black mass”—what’s left after a battery has been shredded—into usable components.
The supply of black mass from end-of-life batteries is expected to surge. Fastmarkets.com observes that in the United States, “87,000 tonnes of battery scrap are expected to be available for recycling in 2024, and this tonnage is expected to increase by approximately 488% by 2034.”
To get a sense of the scale of the investment and its output, consider a PC Mag story from April 2023, when Li-Cycle was planning to soon open “its largest facility ever in Rochester, New York. The 65-acre site is currently under construction, but ‘will be capable of processing 35,000 tonnes of black mass annually, with battery materials equivalent to approximately 225,000 EVs,’ Li-Cycle says.”
Speed of relevance
At the hearing, Representative Wittman repeatedly said that if the United States is to break free of China’s control of critical minerals, “speed of relevance” is crucial; i.e., American investments and changes in American policy must happen fast enough to make a difference in the global competition with China.
