Who controls the world’s minerals needed for green energy?

OfTheCross

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From my understanding this is one of the reasons that President Manchin was worried about the GND. We don't control the necessary ingredients.


Cobalt, copper, lithium, nickel, and rare earth elements (REEs) are all essential for producing electric vehicles and batteries, harnessing solar power and wind energy, and other actions to reduce the reliance of consumers and industries on fossil fuels. The supply of these critical minerals is vulnerable for various reasons. One is that production and processing of these minerals take place in a small number of countries, including some that have unstable political environments.

Equally concerning, reserves of critical minerals outside the United States are owned largely by a handful of governments, most notably China, with the power to interfere with their supply. The United States has reserves of some of these minerals, but the US government does not have direct control over their production or processing unless it invokes legislation such as the Defense Production Act of 1950.

The data show that China has become the main player in the refining and consumption of goods needing critical minerals, just as the United States is in fossil fuel–based energy, with its success in recent years in tapping natural gas through fracking. The paper's findings broken down by mineral are presented in the rest of this blog.

RARE EARTH ELEMENTS: CHINA DOMINATES​

Rare earth elements are used in electric vehicles, wind turbines, energy-efficient fluorescent lighting, and other items needed for the energy transition. China has considerable control over both the reserves and the production of key REEs (e.g., neodymium and dysprosium) as it does over the rest of the supply chain. The three countries with the largest REE reserves (China, Vietnam, and Russia) hold 70 percent of global reserves, with China holding a little over half of those reserves.

From a strategic point of view, a key consideration is China's position in global value chains. In 2020, Mountain Pass (a US-based company that claims to be the largest producer in the West) acknowledged that it produces an REE concentrate that it sells to a leading global REE company publicly listed in China and that can therefore be controlled by China. Myanmar, which also holds some REE reserves, reportedly sells all its production to China.

COBALT: CHINA AND THE GLASENBERG FAMILY ARE THE MAJOR PLAYERS​

Cobalt is used in rechargeable battery electrodes and to manufacture superalloys. The Democratic Republic of the Congo (DRC) is by far the largest producer (69 percent), followed by Russia in distant second place. Some countries have large reserves but have not yet commenced production (e.g., Indonesia). But a different picture emerges when looking at where the firms operating cobalt mines are incorporated. The top producers are incorporated in the United Kingdom/Switzerland (Glencore and Eurasian Natural Resources) and China (China Molybdenum and Metorex). Firms incorporated in the DRC exploit only 3.5 percent of global output.

Chinese shareholders control the two firms that account for 13.8 percent of the world output and about 24 percent of output produced by large firms that are known and active. The Glasenberg family (from South Africa) is the top shareholder in Glencore, which accounts for 19.3 percent of world output. The two largest players in cobalt are, therefore, not the DRC and Russia, but rather the Glasenberg family and China. Europe has no presence.

COPPER: CHINA CONTROLS LARGEST SHARE OF PRODUCTION BY A SMALL MARGIN​

Copper is the most widely used mineral not only in clean energy technologies but also in traditional industries. The market is well-established and not very concentrated. Chile is the world's top producer (28 percent), followed by Peru (10.4 percent) and China (8.3 percent). Chile also has the largest reserves (22.7 percent). However, companies incorporated in the United Kingdom are collectively the largest producers, followed by firms incorporated in Chile, the United States, and Mexico. China is in fifth spot.

Several of the top copper-producing firms are controlled by institutional investors (e.g., the government of Chile or public investment corporations) and institutional investors. China controls the largest share of production (11.2 percent), but by a small margin. Europe's presence is small, and the United States hosts some important shareholders (passive funds).

LITHIUM: CHINA HOLDS CONSIDERABLE CONTROL OF PRODUCTION​

Lithium use is growing rapidly in electric vehicles and lithium-ion batteries. Geographically, Australia produces more than half of the world's lithium, followed by Chile and China. This order is reversed when it comes to reserves, but many countries are trying to find lithium reserves on their own territory. Lithium mines are usually incorporated where they are located.

Shareholders based in China control several mining companies, accounting for 33.1 percent of the total production (and half of the production of large firms). The United States hosts significant shareholders, but these are passive funds (Vanguard and BlackRock), and there are no significant shareholders in Europe.

NICKEL: CHINA'S IMPORTANCE IS LIMITED​

Nickel is a versatile mineral used in a wide range of clean energy technologies but also in traditional industries like steel. Indonesia is the world's leading producer, with the Philippines and Russia a distant second and third. Indonesia also has a large share of the world's proven nickel reserves, although major efforts are being made to find more reserves, especially in Africa. The countries where mining companies are incorporated are dispersed, and foreign companies mostly extract Indonesia's nickel.

A bit like copper, most nickel-producing companies are controlled by a mix of investment funds and industrial shareholders. The importance of China is still limited, the United States does not host any major shareholder (except passive funds), and Europe is absent.
 

Eternal Tecate

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Biggest one is lithium so Bolivia, California, Taiwan. I know Sri Lanka has a lot of thorium.
 

Gritsngravy

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This isn’t a good reason to handicap yourself with energy innovation
 
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