China’s Battery Mineral Monopoly Poses National Security Risk: Report
Udumbara
China monopolizes over 80 percent of critical raw battery minerals used in U.S. military equipment, posing a serious national security threat, new research has found.
“In a hot war or even a cold one, Beijing could also weaponize the battery dependence of economic sectors ranging from cars to computers, communications, and construction,” the report said.
China’s current stranglehold requires mining a surplus of critical minerals in the upstream battery production process. As it stands, Beijing makes approximately 85 percent of anodes, 70 percent of cathodes, and a whopping 97 percent of the anode precursors, according to the report, citing data from the International Energy Agency.
Throughout the entire supply chain, bottlenecks are used to weaponize mineral exports for geopolitical leverage. However, diversifying certain minerals is proving to be complicated, especially battery-grade graphite, where China processes more than 95 percent, according to the report.
This is in part owed to China’s lax environmental standards, as the processing is “highly polluting,” and involves “discharging particulates into the air and dumping waste into local waters,” researchers said.
Another strategic hurdle is Beijing’s aggressive state subsidies that make Chinese companies temporarily immune to short-term market effects.
That figures, according to the report, “dwarf” the 7.4 billion dollars the United States allocated for EVs through 2017.
“This difference in scale is critical,” the report said. “When subsidies, like those in China, reach the point where profitability is no longer a relevant consideration for an enterprise, companies are capable of leveraging a degree of power that can push out profit-based competitors.”
To combat this dynamic, the report suggested the United States should step up domestic capacity for extracting critical minerals. Measures in this effort include incentivizing private investment, state encouragement, and streamlining the process to reduce inefficiency in the system.
“Permitting obstacles alone represent an estimated 40 percent of all delays in mining projects,” the report notes, while acknowledging robust guardrails protect “American communities from the pollution and safety hazards that citizens in China frequently face.”
Earlier this year, the Trump administration issued a series of executive orders aimed at boosting U.S. production and processing of critical minerals.
In April, another order promoted offshore mineral exploration, particularly targeting deep-sea polymetallic nodules rich in battery-critical elements like nickel, cobalt, copper, and manganese. However, the FDD research warns that disturbing those nodules could impact global oxygen levels, underscoring the environmental trade-offs involved.
The report highlights the need for alternative sources outside China, advocating for strong cooperation with allies through “ally-shorting” and “China plus one” policies already adopted by companies like Apple, Microsoft, and Black & Decker.
“America can—and should—use its trade power to force the creation of a better system,” the authors said. “Regaining our leadership is not an impossible task. ... Our national security depends on it.”
.
