As the clean energy transition accelerates, critical minerals such as cobalt, lithium, and rare earth elements have become buzzwords in business, international relations, and sustainability.

Yet amid the scramble for these well-known resources, another metal – antimony – has quietly emerged as another keenly contested resource. With China’s recent announcement of export restrictions on this metal, the challenges of balancing supply and demand are intensifying, raising concerns over supply chain vulnerabilities and fuelling a new form of competition among great powers.

Antimony, a lustrous silvery-grey metalloid, is scarce in nature and unevenly distributed globally. It is, however, critical for producing high-tech and defence products, including flame-retardant materials, certain semiconductors, and superhard materials. As with many critical minerals, China dominates the global antimony supply chain. The country holds the world’s largest deposit, accounting for approximately 32% of global antimony resources, yet it produces more than 48% of global output.

China’s move to restrict the export of antimony, ostensibly to safeguard “national security and interests”, is set to take effect on 15 September. While these restrictions are not explicitly targeted at any specific country, the geopolitical implications are significant. China has gradually reduced its antimony production over the past few years to limit strategic stockpiling. As a result, the announcement has driven up prices, potentially disrupting global supply chains. The impact is particularly acute for the United States, which sourced 63% of its antimony imports from China.

China’s export control of this critical metal might appear a calculated move within the broader framework of resource nationalism. Beyond safeguarding strategic resources and preventing over-exploitation, these controls reinforce China’s leadership in the global antimony industry, enhancing its influence over the international allocation of this critical mineral. This move, thus, is not just about acquiring and protecting resources; it is also about denying rivals a strategic advantage.

Antimony is one of the few elements classified as a “critical” or “strategic” mineral by countries including the United States, China, Australia, and Russia, as well as the European Union, underscoring its special geopolitical value. Following similar restrictions on germanium, gallium, graphite, and rare earths, China’s export control of antimony marks another move to leverage its dominance in global supply chains. This action serves as a response to US efforts to limit the availability to China of critical technologies such as high-end chips .

China’s anitimony announcement has not gone unnoticed by markets. In Australia, the response has been notably positive. Larvotto Resources, a leading exploration and pre-development company focused on high-demand commodities including antimony, saw its share price surge as it possesses the rights to operate the Hillgrove Gold-Antimony Project, the eighth-largest in the world. The assumption is that Australia will fill the market gap left by China. In an effort to counter China’s dominance in critical mineral supply chains, the United States had forged partnerships with resource-rich countries including Australia.

However, China’s export restrictions target antimony oxides with a purity of 99.99% or higher, as well as other high-purity antimony compounds (99.999%). Producing such high-purity chemical compounds requires advanced processing technologies, and export controls with this high-purity threshold are likely aimed at restricting the export of high value-added antimony products and advanced processing technologies. These ultra-pure products are used in specialised industries, including high-end electronics, optics, and defence applications.

Australia’s ability to mitigate the risks associated with China’s dominance remains limited. China is a net importer of antimony metal. Currently, 86% of Australia’s antimony exports are sent to China for processing. Investing in processing capacity and infrastructure for lower-grade antimony products may offer limited strategic value for the United States, as these products will still be available under China’s restrictions. Conversely, developing high value-added processing technologies to produce high-purity antimony products carries significant risks, particularly if China decides to retaliate in trade or lift these restrictions. In the latter case, even if alternative processing technologies become available in Australia, the market – including the United States – may still turn to China for more cost-efficient products, potentially rendering Australia’s investments obsolete.

Navigating these dynamic complexities and maintaining an independent policy in the face of great power competition will be a true test of political acumen for Australian policymakers.

The competition over antimony is merely the latest manifestation in the great power rivalry that centres on technological supremacy. Each side is manoeuvring to secure critical materials and technologies, define future systems, and outpace the other in innovation.

The underlying issue is a deepening lack of trust between these global powers. This mistrust fuels the tug-of-war over resources, with nations viewing control over materials as crucial for maintaining technological dominance.

However, this relentless pursuit of supremacy comes with significant downsides: fragmented global supply chains, rising resource nationalism, and intensified trade restrictions. Cooperation gives way to competition, and technological progress risks becoming a zero-sum game.

To read the article as it was published on the The Interpreter webpage, click here.

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The Organization of the Petroleum Exporting Countries, OPEC, was established in 1960, with five founding members: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. OPEC’s primary objective was to unify petroleum policies and secure fair prices for its member countries, which has since expanded to include 13 core members. According to current estimates, 80.4% of the world’s proven oil reserves are located in OPEC Member Countries, with the bulk of OPEC oil reserves in the Middle east, amounting to 67.1% of the OPEC total.1 Central to OPEC’s power is its ability to leverage its collective influence to manipulate global supply and demand dynamics, thereby influencing prices. Reductions in production create market scarcity, driving prices upward, while increases result in a surplus, leading to price decreases. Decisions on production quotas are made during OPEC meetings, where member nations negotiate and coordinate their strategies. 

The United States is on the cliff of its third energy revolution in 100 years. 

Up to this point, renewables have only played a minor role in US power generation; in order to fulfill the promises of a net-zero emissions scenario by 2030, 2040, or 2050…wherever the target is now! 

The shift from a fuel-intensive to a material-intensive energy system powered by renewables will rely on a supply chain for critical minerals and rare earth metals controlled by only a handful of countries. 

Where is this fuel coming from?

The materials necessary for our smart phones, high technology devices, consumer and industrial batteries, electric vehicles, renewable energy infrastructure, all require the metals and rare earth elements whose supply is currently controlled by a small group of countries, led by China.

China has emerged as a dominant force in the processing of these raw materials into usable forms, driven by domestic resource availability, cost-effective labor, and advanced processing technologies. An underlying reason for China’s preeminence is the hesitation of many countries to engage in environmentally impactful processing activities associated with critical minerals. The processing journey from raw materials to refined forms involves extraction, beneficiation, smelting, and refining; processes that generate waste, release pollutants, and have adverse ecological effects on the environment. China’s willingness to engage in processing activities, albeit with varying environmental standards, has allowed it to become a global bottleneck in the green-energy metal supply chain.

This bottleneck extends to both processed raw materials and finished goods (wind turbines, electric vehicle batteries, and battery energy storage systems) contributing to China’s dominance in the sector. As the world strives for renewable energy solutions, the reliance on China for processing and manufacturing introduces potential vulnerabilities in supply chains, affecting availability and affordability.

Where are the clean-energy technologies manufactured?

Answer: China

To recap, China controls a portion of the mine supply, a significant majority of the processing, and an even more significant majority of the manufacturing of clean-energy technologies. They are vertically integrated; a term that describes a business strategy in which a company owns or controls different stages of the supply chain of a product or service.

So what will the largest consumers of renewables and clean-energy technologies, the US & Europe, do if China decides to turn off the spout for say, a raw material…we’re about to find out. 

On July 4th (of all days) China announced a curb on exports of Gallium and Germanium, two of the rare earth elements critical to chipmaking and electronics. 

It’s not just a China problem…the risk of a new OPEC is real.

Argentina and Chile has the world’s second- and third-largest reserves of Lithium, respectively. Those countries, along with their neighbor Bolivia, make up the “Lithium Triangle”. The US imports roughly 91% of its lithium from the Lithium Triangle, primarily Chile. 

At the end of April 2023, Chile’s President announced the nationalization of its lithium reserves, which could signal the imminent rise of protectionist measures on a global scale, with a focus on these core green energy metals and rare earths. Our reliance on lithium is set to grow even further. Recently, MIT scientists created a solid-state lithium battery that surpasses the performance of current battery technologies5. As newer technologies demand even greater quantities of lithium, the US is likely to accept the nationalization of, and its short- to medium-term dependence on, Chilean lithium, while exploring alternative sources in countries with more favorable business environments. 

As the world accelerates its shift towards renewable energy, the concentration of green-energy metal reserves and processing capabilities in a limited group of countries raises concerns about pricing power and supply chain resilience; this could give rise to a new cartel of metal exporting countries, OMEC. 

The United States, Europe, and other developed nations, as major consumers of these materials, will have to deal with this group…but it’s likely that China will be setting the price for now. 

To read the full insight, please click here.

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Many Western governments frame their strategies towards Critical Raw Materials in terms of security of supply and fret about “dependency” on hostile trading partners. Governments of lower per-capita income nations with lots of material reserves see the matter differently. For them, the sharp predicted increases in demand for these materials in the decades ahead is too good an opportunity to miss to develop processing industries as part of the modernisation of their economies. Both groups frequently talk past each other, a practice made worse by the suspicions created by intensified geopolitical rivalry. The ensuing scramble for critical raw materials is the subject of this report.

Many narratives around geopolitics and critical raw materials are misleading

What differentiates this report from others is that:

We assess the pros and the numerous cons of creating lists of raw materials deemed “critical.” Lists can have the merit of being transparent, but they attract the attention of special interest groups.

• We evaluate whether trading patterns in critical raw materials are more volatile than other materials and metals (they aren’t). Central to geopolitical scaremongering about trade in critical raw materials are claims made that China “weaponised” Rare Earths exports against Japan in 2010. Using United Nations’ trade data, we found no evidence that China singled out any G7 member or the EU for reductions in Rare Earth exports.
• We demonstrate that, with the exception of the United States, Western nations have significantly reduced their sourcing of Rare Earths from China since 2010. That was facilitated by a five-fold increase in the quantity of Rare Earths available from other countries in the years 2015 to 2021.
• Another narrative we challenge with data is that Indonesia’s export curbs on nickel ore provided a surefire recipe to develop its downstream processing industry. Increases in Indonesia downstream exports look a lot less impressive when the surge in recent years of Indonesia’s other non-agricultural exports is taken into account. Attributing downstream nickel sector gains solely to the upstream export ban fails to take account of the other measures Indonesia took.
• For all the talk of policy support for sourcing and producing critical raw materials we show that, worldwide, policy intervention affecting other materials occurred more often, was more likely to be permanent, and was more likely to favour local firms than the products deemed critical.
• We show that the weight given in trade policy circles to export restrictions on critical raw materials is probably misplaced. In fact, such restrictions account for small percentages of the measures taken by governments that bear upon markets for critical raw materials. Resort to subsidies is far more frequent.
• Given Western governments frequent reference to securing critical raw materials one might have expected that they would have reduced import restrictions on more critical raw material product lines and larger shares of relevant imports. We show that, when compared to those champions of active industrial policy—the BRICS and Indonesia—they didn’t.

Time to take stock and to face the realities inhibiting capacity growth

It surprised us that much of the trade policy-related narrative concerning critical raw materials has little basis in fact. Analysts and officials need to take stock of the current scramble for critical raw materials—and, ultimately, revisit assumptions about the factors most likely to prevent long-term supply of critical raw materials from growing to meet growing demand.

Even in the absence of geopolitical rivalry, the challenges associated with scaling up supply of raw and processed critical raw materials to meet higher levels of demand would have been formidable. Complicating factors include fundamental uncertainty as to the pace of the digital and energy transitions, with their knock-on effects for both how much material will be needed and, quite possibly, which materials are needed in greater quantities in the first place.

On top of this are geological considerations including the fact that some critical raw materials are byproducts of other less-wanted materials, that long time frames needed to bring some mining facilities online, and the central roles that uncertainty and difficulties in financing play in scaling up production. Without denying the contribution that greater recycling and the adoption of circular economy practices can make, on its current trajectory, supply expansion for most critical raw materials is likely to be sporadic.

One consequence is that periodic outbreaks of market disruption are on the cards. Whichever long-term strategies are adopted by governments need to be designed with this disruption in mind. Opportunists should not be allowed to capitalise on any short-term shortages, price hikes, and the like. Anyone expecting or demanding that markets for critical raw materials unfold over time in a predictable manner simply hasn’t read enough about the mining industry. This is going to be messy. Yet, we do not counsel despair.

The ensuing scramble for critical raw materials is the subject of this report, the 31st prepared by the Global Trade Alert team. Part I of the report examines the very notion of a critical raw material and what factors underlie the expected shortages and volatility in world markets for these goods. The pros and cons of enumerating lists of critical raw materials is discussed, not least given the tendency of some producer groups to claim their materials deserve state largesse. Given the frequent mention of Rare Earth materials in deliberations on critical raw materials, a chapter is devoted to alleged attempts to weaponise trade in them.

Part II of the report provides detailed evidence on the unilateral policy intervention undertaken by governments towards critical raw materials. Here we examine if there is a mismatch between the narratives used by policymakers to characterise their policies towards critical raw materials and the actual policy mix chosen. A subsequent chapter is devoted to steps taken by governments, sometimes in concert, to produce or secure critical raw materials abroad. Having found these approaches wanting, we advocate an approach to thickening over time markets of critical raw materials.

In policy deliberations, it is mistaken to view market structures and international sourcing patterns for critical raw materials as immutable. They can evolve over time guided by market-supportive government intervention. Still, the fundamental uncertainty facing demand for critical materials as societies undertake the digital and energy transitions means that, whatever steps are taken to thicken markets over time, there will be occasional shortages and market disruption. Private and public sector decisionmakers should expect such disruption and take mitigating measures in advance such as, where viable, stockpiling.

The Global Trade Alert team at the St. Gallen Endowment for Prosperity Through Trade contributed to the production and dissemination of this report. This report was written by Simon J. Evenett and Johannes Fritz.

To read the full report, please click here.

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Industrial raw materials are once again at the forefront of policy discussions, for several reasons.

The challenge of achieving net zero CO2 emissions by 2050 will require a significant scaling up of production and international trade of several raw materials which will be critical for transforming the global economy from one dominated by fossil fuels to one led by renewable energy technologies (IEA, 2021). Such technologies make generally more intensive use of minerals than their fossil fuel counterparts. For example, a typical electric car requires six times the mineral inputs of a conventional car and an onshore wind plant requires nine times more mineral resources than a gas-fired plant (IEA, 2021). Therefore, while the green transition will reduce the global dependence on fossil fuels, it will intensify the pressure on the production and efficient international exchange of other raw materials. For example, because of the increasing share of renewables in new investment in the energy sector, the average amount of minerals needed for a new unit of power generation capacity has increased by 50% since 2010 (IEA, 2021).

Some relatively abundant raw materials, which have traditionally underpinned industrial production (e.g. aluminium, copper and iron ore and steel) will also remain essential in green sectors and their enabling technologies. Other materials, such as rare earth minerals (notably neodymium and dysprosium), lithium, cobalt or nickel, are also prevalent in new technologies and thus their demand is expected to grow substantially (Gielen, 2021). The IEA projects, for example, that in the next twenty years the clean energy sector’s demand for materials such as cobalt, natural graphite or lithium will increase from twenty to more than forty times (Figure 1.1). Overall, depending on the assumed pace of green transition, it is estimated that the demand for minerals (from the energy as well as other sectors) will grow by on average four to six times between 2020 and 2030 (IEA, 2021).

To read the full policy paper, please click here.

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