China Chokes Off Metals to US; Artificial Elements?; Power Metal Party!
And more about the human and environmental costs of renewable energy and digital technology —and how we can do better.
China Chokes Off Metals to US
The risk of a trans-Pacific trade war rose significantly this week, as China declared a ban on exports to the US of several obscure but very important metals. The cutoffs are a riposte to American moves to block high-tech exports to China. They came one day after the Biden administration announced the US would restrict China’s access to bleeding-edge memory chips needed for artificial-intelligence applications.
The list of embargoed metals includes:
Gallium, essential for semiconductors, TV and phone screens, and solar panels;
Germanium, also used for semiconductors, plus night-vision goggles, fiber optic cables, and the solar cells that power most satellites, and
Antimony, used in batteries and ammunition.
China isn’t America’s only source for those particular metals, but it is an important one. Until recently, it supplied about 21% of America’s gallium, 54% of germanium, and 80% of antimony. The US Geological Survey warned in a report issued just two weeks ago that a Chinese ban on gallium and germanium sales could cost the American economy $3.4 billion.
But the most significant thing about these export bans isn’t what they mean for the supply of those specific metals. It’s that they could presage more embargoes on other Chinese-produced critical metals, which could do major damage to America’s efforts to build its renewable energy and electric car industries, and to the economy as a whole. As I wrote in Power Metal, the book, by “leveraging its own natural resources, relatively lax environmental standards, diplomatic clout, and shrewd overseas investments, China has, in recent decades, come to dominate the entire supply chain for critical metals.” China mines lots of metals within its own borders, and owns mines all over the world. It also refines most of the world’s lithium, cobalt, and much of its nickel, copper and other critical metals. Chinese factories then take those refined metals and use them to produce most of the world’s solar panels, nearly three quarters of all lithium-ion batteries, and a majority of all electric vehicles.
In short, Beijing’s grip on critical metal supply chains gives it enormous economic and geopolitical leverage. It unsheathed the embargo weapon once before back in 2010, when it cut off rare earth exports to Japan, sending economic shockwaves around the world. This week’s moves to cut off germanium, gallium and antimony may only be warning shots. China has also tightened controls on exports of rare earth metals, which are used in electric car motors and most digital gadgets, including the one you’re probably reading this on. And this week Beijing also announced it would begin to restrict sales of graphite, a key ingredient in most electric car batteries. “The US imports 100% of its battery-grade natural graphite material from China,” Jack Bedder, an analyst with Project Blue, told me via email. A full-scale ban “could present a major risk for the US battery landscape.”
Freeing the US from its dependency on Chinese critical metals was one of the key motivations behind the Inflation Reduction Act, President Biden’s signature piece of legislation, which aims to steer hundreds of billions of dollars to renewable energy and critical metal projects. Trump wants to shut it down (though that’s likely to prove difficult, considering most of its benefits so far have flowed to deep-red states).
At the same time, Trump has also promised to slap heavy tariffs on Chinese imports, which seem certain to provoke Beijing further. China certainly doesn’t seem to be afraid of a trade war—and is well armed for one.
Artificial Elements?
If China were to ban graphite exports, where would American battery makers turn? Maybe to artificial versions of the material. In Malaysia, a startup called GraphJet Technology says they’ve developed a cost-effective process to turn palm oil waste products into graphite. Malaysia is a huge palm oil producer, and the process generates millions of tons of kernel shells which would normally be trashed; converting them instead into valuable graphite is an appealing win-win pitch. The company aims to open a facility in Nevada soon.
They may have competition nearby. In California, another startup, Molten Industries, has developed a technique to separate out graphite from methane gas. They’ve attracted investment dollars from Bill Gates’s Breakthrough Energy Ventures, according to Bloomberg.
Both sound promising, but both still have to prove they can bring actual product to the market at a competitive price—and even that might not be enough. “Other materials like silicon, lithium and hard carbon may begin to compete with graphite as the default material in battery anodes,” according to Bloomberg. “The shift could potentially halve demand by 2035.”
Power Metal Party!
We threw a little bash to celebrate the publication of Power Metal last week, and I think I can safely say a splendid time was had by all. Certainly by me, at least. There was cake and tequila aplenty, not to mention fabulous door prizes!
In other book news, I’ll be appearing with ace Bloomberg environmental reporter Todd Woody on Tuesday, December 10, at the Berkeley Ecology Center in Berkeley, California. If you’re in the area, come check it out! Tickets are free—just register here.
If you did some shopping after Thanksgiving, you might be interested in this piece I wrote for Time on the real cost of Black Friday. You can also hear my latest interviews on the HC Commodities podcast, Columbia University’s Energy Exchange, and NPR’s 1A.
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