Western countries are slowly but surely waking up. Gone are the days when one could comfortably lean back and simply wait for ships with ordered goods and raw materials to dock and be unloaded at the port. Moreover, the lulling ignorance of previous years has now turned into tangible fear.
The fear of no longer being supplied with raw materials and intermediate products, or not being supplied sufficiently, is quite real. For just as the West does not hesitate to use its economic power as a potential for pressure and discipline through sanctions, it must also be expected that China will sooner or later take this path as well.
This approach would not be new, because when China and Japan came into conflict in 2012 over several uninhabited islands in the Chinese Sea, administered by Japan but also claimed by China, the Middle Kingdom did not hesitate to exclude Japan from the supply of Rare Earths.
The Western Sleepwalkers Have Reached the End of the Dead End and Are Slowly Waking Up
The People’s Republic could take this path because China accounts for 90% of global production of rare earths. China’s share of global graphite production is similarly high. The situation for the West is somewhat better, but still fundamentally very poor, when it comes to cobalt and nickel. 68% of the cobalt needed for electronics comes from the People’s Republic, while for nickel it’s “only” 65%.
Even with the important battery metal lithium, China holds a significant position with a 58% share of production, and even the generally widespread copper, which is indispensable as a conductive material for the energy transition, comes 40% from smelters located in the Middle Kingdom.
The massive dependence of the West on China is not just an open flank. It is a dead end that has been maneuvered into for years without necessity, but also without strategic foresight. Now the Western states are slowly waking up and realizing with shock how vulnerable and susceptible to blackmail they and their economies have become.
Now Quick and Decisive Action Must Be Taken
However, this realization must now be followed by the necessary consequences. On one hand, they are expensive and on the other hand, they require a lot of time. At best, it takes only six years for a raw material project to go into production. But in many cases, progress is not quick, but extremely slow. This is why the times to commissioning a new mine have now grown to ten to fifteen years.
One can think what one wants of Donald Trump and the government he led. But one thing must be granted to him: It has long been recognized in the White House how crucial it is now to significantly accelerate the approval processes. At least that’s a start.
But let’s not kid ourselves. Further steps and measures must follow, and until they are all realized, Western countries live on the brink of production standstill when it comes to raw material supply. Because if China’s strong arm wills it, all wheels in the West could very quickly come to a halt due to lack of raw materials.
