the times | Saturday August 1 2020 1GM 33Comment
often by 16-year-old boys working underground from
dawn to dusk. It is a life lived in darkness. Since the
managers don’t want the workers to leave the pit,
traders from the market follow them into the tunnels,
hold up torches and sell them grain. The warlords
don’t usually profit directly from the mines — they tax
local communities. They have become part of a
mining community that includes metal traders,
prostitutes, if there is a peacekeeping force nearby, and
invariably a Chinese businessman.
As a result, tantalum has been deemed a “conflict
mineral” and for it to be legally sold to the US,
companies have to go through an arduous process of
tracking the metal’s progress from extraction smelting.
China has no such qualms. It buys the coltan and
takes it to China to be smelted. The sting in the tale: it
uses the DRC or Rwandan tantalum and sells its own
home-production to the US. If the dispute with the
Trump administration intensifies, it may end up
refusing to sell even this “clean” tantalum to the US.M
ost producers know how to handle this
single-minded pursuit of their buried
treasure. South Africa has become very
interesting to China because it accounts
for 80 per cent of world platinum
production. Tighter environmental regulation means
more cars will use platinum catalytic converters. So
Chinese demand is likely to grow by 14 per cent this
year, and South Africa can expect at least the promise
of a visit from President Xi.
South Africa doesn’t just dig out platinum but also
palladium and rhodium: the three most important
ingredients for catalytic converters. What, though, if
an electric vehicle boom cuts demand for converters?
Then Chinese foreign policy will perform another
somersault.
Breaking the Chinese hold on this most sensitive of
supply chains has become extraordinarily complex. It
may not yet have the military capability to slog
through a long war against a fully committed US but it
can, through its grip on the strategic supply chains,
hold the army to ransom. The more sophisticated the
weaponry, the more dependent it is on rare earth
elements and critical metals.
The first lesson to be learnt from Chinese behaviour
is that the government, specifically the Pentagon, has
to take a weightier role in funding the whole
production cycle of rare earth elements. The pattern
whereby American metals are sent to China to be
finished or turned into magnets and then returned is a
costly absurdity that will be exploited by Beijing.
The most efficient way to counter China’s menacing
monopolies is to form like-minded alliances. There is a
hint of that in talk of an Indo-Pacific alliance
committed to freedom of navigation on the main
maritime routes. A second, perhaps complementary,
approach would be to expand the Five Eyes
intelligence-sharing club. Taro Kono, the Japanese
defence minister, hinted last week that his country
could become the sixth member after the US, Britain,
Australia, Canada and New Zealand.
That probably won’t happen but it is a reminder that
many major states share a deepening sense of dismay
about China’s determination to impose its rules on the
world. Certainly Japan, which faced a Chinese
embargo of rare earths in 2010, has plenty of common
interests with Australia, which is home to Lynas Corp,
the only major non-Chinese rare earths producer.
Canberra has signed an agreement with the US for
their geological agencies to make a joint assessment of
where new supplies could come from.
Before it expands, Five Eyes should form more
common positions — on Huawei’s role in 5G, on
threat assessments, on protecting electoral integrity —
and stand up for them in public.
The sharing of intelligence is an important act of
trust and should translate into more action. Once the
values of Five Eyes are clearly set out, then comes the
moment when the club can decide whether and on
what terms to accept new members, whether it be
Japan or India.
Chinese academics complain in private that the
West reinforces the Xi regime’s sense of paranoia
when it works together to curtail or contain
Beijing’s overarching ambitions. No doubt some
well-intentioned German professors said something
similar to foreign guests about Kaiser Wilhelm in 1913.
But the case against a nationalist leader who is
bullying his way towards global domination, who
rules without checks and balances, who crushes
dissent — that case has surely to be made, arm in arm
with our allies.Roger Boyes is diplomatic editorChina has developed an Afghan policy because of
their large reserves of iron, copper and cobalt but,
above all, lithium. For a while the starry-eyed
described Afghanistan as the “Saudi Arabia of lithium”,
ignoring the obvious security risks, tribal politics, the
Taliban and poor infrastructure.
Still, lithium, cobalt, graphite are major components
of the lithium ion battery, one of the keys to the
coming transport revolution. And so China acts
accordingly. Chile has one of the world’s biggest
known reserves, 8.6 metric tonnes. So a Chinese
company buys a 23 per cent stake in a Chilean-based
group, the world’s second largest producer.
The great-power competition between China and
the US colours commodity politics. Bolivia was
convinced America was behind the coup that recently
overthrew the leftist president, Evo Morales. The
immediate assumption: Washington was greedy for
Bolivia’s lithium deposits. The US denied involvement
but even a hint of CIA puppetmastery was enough to
seal a deal — for a Chinese company. It may find
Bolivia a difficult supplier; the new government is
insisting that China processes the lithium in Bolivia.
Rarely has there been so much pushing and shoving
between the big powers than over the coltan mines of
the Democratic Republic of Congo. Coltan is used to
make tantalum, a hardening metal that is vital for US
missile warheads. It is extracted in grisly conditions,governments and ambitious foreign companies.
When the US approved an arms sale to Taiwan, the
Chinese press speculated that Beijing would “cut off
material supply including rare earths which are crucial
to advanced weapons production”. Xi paid a very
ostentatious visit to a rare earths magnet maker in
Jiangxi province. The point: to show that however
much the US tries to create alternative supply chains,
it is still way behind. If its policies didn’t fall into line,
its arms and aerospace industry could be punished
with a flick of the pen.T
he need to have a finger in every pie is the
defining quality of Xi’s foreign policy. The
belt-and-road initiative is dressed up as
sentimental recreation of the ancient Silk
Road but it has become a strategic instrument
to create a buffer against a hostile West. It is clear that
it is constructed both as a shield and a sword. A shield,
because China is aware of its vulnerability to a
blockade from the sea. Some 80 per cent of its oil is
imported through the Indian Ocean and Malacca Strait
into the South China Sea. The belt-and-road diplomacy
thus ploughs cash and credit into creating land routes
to China, into building deep water ports. And a sword,
because it creates artificial islands with airstrips in the
South China Sea, builds up a marine force and buys
into countries with strategic metals.The case
against a
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global
domination
has surely
to be made
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