Photo Credit: Reuters
On August 15 this year, China announced its decision to restrict the export of antimony, a critical mineral used in strategic sectors such as defence, for military equipment such as missiles, infrared sensors, flares, ammunition, and even nuclear weapons. China’s Commerce Ministry justified this move on the basis of “national security”, adding that the measure would take effect from September 15. The declaration, however, was part of a series of countermoves that began in August 2023.
Moves and countermoves
When it comes to critical minerals, China is not only a stakeholder but also a leader. It dominates every supply chain segment — upstream, midstream, and downstream, covering mining, extraction, refining and processing. It enjoys a near-monopoly status, controlling 60% of rare earth production, 60% of critical minerals production and 80% of the processing worldwide. Therefore, any decision China makes has profound national security implications globally. The European Union and countries such as India, Japan and the United States are strategically vulnerable due to their dependence on critical minerals.
China’s intimidating behaviour first gained international attention in the aftermath of the incident in 2010 when a Chinese trawler collided with Japanese Coast Guard boats, after which it halted the exports of rare earth elements to Japan. The event also led to serious global discussions about the world’s dependence on China for strategic minerals. The recent antimony episode has only reaffirmed the western belief that China is willing to use critical minerals to coerce. All of this became evident in mid-2023 when China announced a set of restrictions on the exports of critical minerals with U.S. export control measures. In 2023, following the decision by the Netherlands to restrict the supply of semiconductor equipment, under pressure from the U.S., China announced curbs on the export of gallium and germanium, two critical minerals used in solar cells and computer chips. Similarly, again in 2023, after the U.S. announced export control on “advanced computing, semiconductors, and semiconductors manufacturing equipment”, China reciprocated by curbing the export of “high-purity, high-hardness and high-intensity synthetic graphite material and natural flake graphite and its products”, widely used in electric vehicle (EV) batteries, fuel cells, and nuclear reactors. These steps were primarily aimed at responding to U.S. actions and sending a strong signal that if pushed to the wall, China would not hesitate to weaponise the critical mineral supply chain. Apart from these two steps, China has reminded the U.S. of its monopoly and monopsony as a mineral power and buyer, exhibiting the importance of its critical minerals in developing the U.S.’s high technology and green energy sectors. China has also restricted the export of rare earth processing technologies in making rare earth magnets used in EVs, in addition to technologies used to extract and separate critical minerals, hamstringing the U.S.-led attempt to build an alternative supply chain.
A hardening of foreign policy posture
Restricting access to strategic resources is a classic statecraft strategy, hitting the enemy’s weak points, an example being the U.S. oil embargo against Japan in 1940. Therefore, this is expected from an aspiring great power such as China, which seeks to leverage its status as a mineral power. The difference in China’s case is that this initially started as an act to intimidate countries. However, with recent countermoves, critical minerals export controls have now become a part of China’s foreign policy objectives. It has moved from the politicisation to the weaponisation stage. For two reasons, China has grown more comfortable using its mineral resources as a political tool. First, Beijing is reminding the West of its strategic dependency on China by demonstrating its status as a mineral power and exerting control over the supply chain. Second, China is responding in like and believes that it is acceptable to take advantage of the situation to sabotage the West’s critical mineral supply chain, which will hinder the development of its high-tech sectors and undermine their efforts to decouple and de-risk. Those critical minerals utilised in dual-use applications are major targets in particular as they are needed in the building of the Virginia class submarine and the F-35 fighter aircraft, which require several hundred pounds of rare earth elements. This shows that the aggressive, reciprocal and coercive approach has taken over the cooperative and collaborative approach, one of China’s two schools of thought. It signals that Chinese curbs via export control will only grow as ties with the West deteriorate. According to Chinese Natural Resource Minister Wang Guanghua, “China will push forward exploration, increase critical minerals capacity, and enhance mineral resources reserves over the next five years”, thus displaying China’s ambitions to leave no stone unturned.
India’s vulnerability
Like its Quad partners, Australia, Japan and the U.S., India remains vulnerable due to its strategic dependence on China. New Delhi is heavily dependent on the imports of critical minerals such as lithium, nickel, cobalt and copper, which resulted in an import cost of around ₹34,000 crore in FY23. It is estimated that India’s hunger for minerals will only grow, and so will the import cost, further increasing India’s vulnerability. Hence, this episode must act as a wake-up call for India and the policymakers who have been slow in taking precautionary measures such as having partnerships with like-minded countries and investing in developing alternative supply chains.
Abhishek Sharma is a Research Assistant with the Observer Research Foundation’s Strategic Studies Programme
