How #China cornered the market for #CleanTech-Right Under the West's Nose...

Following up on yesterday's FT article "The New Commodities Superpowers" on how #BatteryMetals producers are looking to establish their own cartel, today the FT goes deeper into how China cornered the market for the building blocks of clean technologies.  

"China today is responsible for the production of about 90% of the world’s rare earth elements, at least 80% of all the stages of making solar panels and 60% of wind turbines and electric-car batteries. In some of the materials used in batteries and more niche products, China’s market share is close to 100%."

This has led to serious geopolitical challenges in the West s they seek to transition away from fossil fuels.

"The rise and rise of China’s clean tech companies poses a massive competitive threat to western manufacturing industries, including legacy carmakers and energy giants. But in the context of a worsening technological cold war with the west, those capabilities could become a source of leverage for China. 

“People are starting to realise that control of the supply chain is important, otherwise you have systemic risk because it’s easy for China to shut down supply,” says Ross Gregory, Seoul-based partner of consultancy New Electric Partners. 

"Western governments are now desperately attempting to catch up with China’s ascendance to the top of the world’s critical minerals and renewable energy industrial supply chains."

Investments in Mining Companies & Projects

Nikhil Bhandari, co-head of Goldman’s Asia-Pacific natural resources and clean tech research team, says China’s grip on raw materials is “more than it appears”. This is thanks to equity investments in overseas mining operations by Chinese companies such as metals group Huayou Cobalt, carmaker BYD and battery giant CATL. In lithium, for instance, China only has a small share in mining, yet by next year Chinese interests will control more of the resource than the country needs for domestic purposes. 

And there is no sign that China’s interest in tying up resources is close to being quenched. 

The country’s overseas metals and mining investments are on track to hit a record this year, according to data published last week by Fudan University in Shanghai. Spending in the first six months of 2023 hit $10bn, more than the total in 2022, and investments this year are likely to surpass the previous annual record of $17bn in 2018.

Read the whole piece on the FT here: How China cornered the market for clean tech | Financial Times