Sacred Headwaters #61: "Critical Minerals" Pt 3 - a New Cold War?
The concept of "criticality" is a national security one, not an energy needs one. How can we avoid concerns about control of mineral production fanning the flames of a new cold war?
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Issue #61: “Critical Minerals” Pt 3 - a New Cold War?
In recent years, many have seen conflict between the United States and China as increasingly inevitable.
The US Treasury Secretary Janet Yellen said that in April, and the “many” she’s referring to are the people she interacts with regularly: Washington insiders, power brokers, and media. She went on to disagree with that inevitability, but as she pointed out — and as anyone who pays attention to the core media outlets of US empire can plainly see — she’s in the minority in Washington. War with China really is being seen as increasingly inevitable by a significant portion of US decision-makers.
That scares the shit out of me, and it should scare you too.
There’s a lot to unpack in terms of what the “real” justifications for a war might be. Possible conflict over Taiwan certainly plays a role (itself a product of many factors), but it’s pretty clear that would just be the spark, not the underlying cause. To the extent there is an answer, it’s some combination of concern over the decline of US empire (Yellen argues that war is not inevitable precisely because the US empire is not, in fact, in decline) and the perennial warmongering influence of the military industrial complex.
Access to energy transition minerals isn’t at the top of the list as far as justifications for war goes. But the majority of reporting on critical minerals places it precisely into this new cold war narrative, and its emerging as one of the more prominent ways with which the public is being prepared for war, or at least for a cold war (a dangerous game to play).
This issue is the third in a series on “critical minerals:”
Issue #59: “More Mobility…Less Mining” (Apr 10th, 2023)
Issue #60: “Critical Minerals” Pt 2 - the Mineral Production Gap (May 8th, 2023)
Issue #61: “Critical Minerals” Pt 3 - a New Cold War? (Aug 7th, 2023)
The notion of “criticality” itself is important to understand here. It first emerged in the US within the context of the two world wars (see the Strategic and Critical Materials Stockpiling Act of 1939) and is fundamentally intertwined with national security and wartime decision-making. Today, it’s typically framed as a matter of achieving “supply chain dominance,” a concept that seems to have different moral implications depending on who’s doing it — if it’s the US, it’s good. If it’s China, it’s bad.
The building conflict over these so-called critical minerals is, in some ways, a departure from the period of neoliberal globalization of the last few decades: many critical minerals themselves are geographically widespread, but economically viable mineral deposits are not. Mineral abundance isn’t the only factor that contributes to a country’s comparative advantage, but it’s obviously a dominant one. So the insistence by the wealthy world that we reshore mineral production is odd on-face, and seems to be part of a larger movement away from a consensus around globalization.
This new strategy of securing supply chains through a combination of “reshoring” mineral production and expanding spheres of influence is threatening the same kinds of conflict and proxy wars that peppered the latter half of the 20th century. But at the same time, it’s hard to imagine how else mineral resource development and trade could function under current global conditions. Sticking to a market-driven, free trade approach could be safer from a conflict perspective, but there are a number of reasons why it also might not be, as we’ll read below. Presumably, there’s a third option, one of global collaboration against climate and ecological collapse that coordinates production and distribution of energy transition minerals in an efficient and just way…but we’re so far from that it’s hard to even conceptualize what a more collaborative approach might look like.
I don’t have any answers to that, at this point. But the reading in this issue is an effort to better understand the role critical minerals play in building tensions — because the stakes couldn’t be higher. We’ll read an example of how traditional US media outlets are leveraging the critical mineral narrative to normalize the idea of war with China, an explanation of the concept of criticality itself, and an exploration of the factors that make mineral supply chains a driver of geopolitics. The big question here is, what are the dynamics of energy transition minerals that are contributing to the growing momentum of this new cold war, and how can they be mitigated?
As an aside, as part of exactly the political project I’m describing here, the New York Times recently published a piece that framed any caution about a “new cold war with China” as Chinese state-backed propaganda. So, reader beware: according to the newspaper of [imperial] record, this is Chinese state-backed propaganda.
To be clear, while I spend a lot more time criticizing the US and Canada in this newsletter, I am not a China apologist, but its increasingly “Climate Mao” approach to climate action does serve as a foil that undermines the legitimacy of the global capitalist regime in useful ways — and US media are the ones trying to fan the flames of war.
Can the World Make an Electric Car Battery Without China? (10 minutes)
Agnes Chang and Keith Bradsher, The New York Times, May 16th 2023. If you don’t have access, you can read it here.
This piece is so over-the-top that I was almost surprised to read it, even in the Times. Right in the lede, the authors make it clear that they believe “the West” and China are locked in some kind of zero-sum combat over developing renewable technologies, declaring that "China is so far ahead...that the rest of the world may take decades to catch up." One could imagine a world where we might celebrate the fact that China is building more renewables and selling more electric vehicles than the rest of the world combined, given that emissions are cumulative and global warming transcends borders. But no: what we get instead is fear-mongering language, deliberately presenting China as a nefarious actor that has spread its tentacles throughout the global south in an effort to "control" access to critical minerals. If a US billionaire, or, say, US-based asset managers like Blackrock and Vanguard, invested broadly in mineral production throughout the global south, it simply wouldn’t be news. We know, because they do, and newspapers like the Times don’t frame that as the US sneakily seeking supply chain dominance.
There are lots in here, but the important thing is the message: the Times is using critical minerals as a tool to paint China as an enemy, manufacturing consent for a future conflict, when, in fact, China is the only country investing in climate action — including mineral production — at anywhere near the scale that capitalist-friendly climate plans claim is necessary.
There’s one particular line I can’t let slip by without calling out, because it’s factually wrong in a way that really elucidates the political project here:
Western countries also own mines abroad, and are trying to catch up with China. But they have been more reluctant to put money into countries with unstable governments or poor labor practices. And they have been slow to ramp up their own production.
75% of all global mining companies are based in Canada, and they love countries with unstable governments and poor labor practices. It’s what allows them to get away with — and this is not a literary conceit — murder. And slavery! If there’s any truth at all to what they wrote here, it stems from the fact that western companies have focused on socially useless minerals like gold.
Critical Minerals: a Primer (10 minutes)
Murtiani Hendriwardani and Isabelle Ramdoo, Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development, 2022.
This short pamphlet introduces the concept of mineral “criticality,” explains the different approaches that countries are using to assess criticality, and lists some of the factors going into critical mineral decision-making and planning. According to the authors, there are two primary approaches to assessing mineral criticality: "security and control of supply" and "value capture." The former sees criticality as a product of potential economic impact and supply chain vulnerability and implies critical mineral strategies focused on reducing that vulnerability by cultivating new resources, whether domestically or within "friendly" countries. The latter is more of what one might expect from the capitalist state formation: it sees criticality as a way to identify opportunities for monopolistic control and competitive advantage in order to maximize domestic profit. Interestingly enough, the concept of “criticality” that we see most commonly portrayed in western media is the former, the national security-focused version, precisely because that is the chosen approach of dominant western countries: the US and Europe.
The latter half of the pamphlet is in many ways a review of what we’ve covered in issues #59 and #60, but one thing stuck out to me: because large-scale mines take years or even decades to come online and require huge capital expenditures, "artisanal and small-scale mining," or ASM, is rapidly growing to fill the mineral production gap. These small, often illegal mining operations contribute as much as a quarter or even a third of global supply of important minerals like cobalt, and these operations can — at times — be even worse than global mining conglomerates when it comes to environmental harm and human rights.
How to Avoid a New Cold War Over Critical Minerals (15 minutes)
Cullen Hendrix, Foreign Policy, November 22nd 2022.
Before diving into this piece, it’s worth being clear that it’s written by a fellow at the Peterson Institute for International Economics, a think tank once referred to as “the Team Globalization and Free Trade cheering squad” that boasts a veritable who’s who of liberal-leaning corporate elites as its board of directors. So — and this is good practice generally — bear that in mind.
If market mechanisms can’t be counted on to secure adequate, predictable, and affordable supplies, it becomes more likely that geopolitical leverage will be used instead...[and] basic economic logic suggests critical mineral markets will be prone to market failures
In this piece, Hendrix looks to the similarities and differences between oil — a commodity that he argues was a major driver of most of the geopolitical events of the 20th century — and energy transition minerals. There are a handful of differences that suggest mineral supply chains may be less brittle and less subject to disruption via geopolitical maneuvering, notably including something the IEA has also highlighted: the operation of the economy does not require constant inputs of minerals. They’re only required to build new infrastructure (i.e. for growth), so a mineral embargo wouldn’t have the same kind of impact that the OPEC oil embargo did. Unfortunately, Hendrix also points out a handful of differences that suggest mineral supply may be more likely to lead to cold war dynamics than oil was, including the high geographic concentrations of production, the relatively equal resource positioning of the US and China, and the small market caps of most of these minerals minerals.
Hendrix’s answer to these concerns is to radically grow mineral supply chains, but importantly, not just through increased mining (though that’s part of what he’s calling for). According to him, countries of the global south that currently dominate mineral production (for many energy transition minerals) should seek investment to move up the supply chain by building refining capacity, thus “widening” the supply chains and making them less prone to the factors that might lead to conflict. He also suggests these countries seek investment from both the US and China as a hedge against interventionism by either one of them.
This piece presents one vision for avoiding a new half-century of cold war politics (and tip-toeing around nuclear apocalypse), although the US and its allies are already pursuing the aggressive “reshoring” that Cullen cautions against instead of ramping up investment in the global south. But the more we can focus on the other side of the mineral production gap — demand — the more we can preclude “criticality” and its inherent potential for conflict altogether.
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