Ignoring China’s grip on critical metals production is not an option | Brunell

China processes more than 90 percent of the world’s manganese, while the U.S. has none.

China’s growing dominance of critical metals production and its vast stockpiles is setting off global alarms as economies emerge from the punishing COVID pandemic. It is not only fear of the Chinese control of refined rare earth minerals, but more traditional metals such as manganese.

Ores containing these elements are located in deposits across our planet; however, the technology to process them is largely in China. As the People’s Republic of China (PRC) under Xi Jinping exerts its leverage, China is tightening export allocations and driving up prices.

The 17 elements classified as “rare earth” are not commonly known, but they are critical components in products ranging from smart phones and laptop computers to batteries, electric vehicle and jet engines, wind turbines, LEDs and major weapon systems.

Rare earth metals are important because of their unique magnetic, luminescent, and electrochemical properties which make many technologies perform with reduced weight, emissions, and energy consumption.

However, manganese is long-recognized as an essential ingredient of steel— the frame work in buildings, ships and vehicles. It is the backbone of all modern industrial components – not only in the commercial economy, but for our Army, Navy, Air Force and Space Force.

China processes more than 90 percent of the world’s manganese. The United States has no manganese production. There is no substitute for manganese when forging steel. It takes 13 pounds of manganese to make one ton of steel.

The clear and present danger, as Wall Street Journal reporter Chuin-Wei Yap noted on May 21, is “dozens of Chinese manganese processors accounting for most of global capacity have joined a state-backed campaign to establish a “manganese innovation alliance,” setting out in planning documents goals and moves that others in the industry say are akin to a production cartel.”

“They include centralizing control over supply of key products, coordinating prices, stockpiling and networks for mutual financial assistance,” Chuin-Wei Yap added. “The manganese alliance notched a success this year in throttling the supply of critical products, mainly steel-strengthening additives, sending their prices soaring more than 50 percent in three months.”

China’s strategy is not new. It has been developing since the 1980s and is engrained in its Made in China 2025 plan. The key goal is to dominate global metals output and calls for massive domestic stockpiles.

Last year, China announced a new trillion dollar program to develop next-generation technologies as it seeks to catapult itself ahead of the U.S. in critical technology areas, Wall Street Journal reporter Liza Lin wrote. The focus is artificial intelligence, data centers, mobile communications and superfast cellular (5G) networks. Its success hinges on controlling essential metals.

Meanwhile, many smelting and refining operations in the U.S. have been closed and dismantled. They were heavy polluters; however, they provided our nation with strategic capacity to provide essential metals.

One major closure was Tacoma’s ASARCO heavy metals smelter in 1985. Similar shut downs and razings occurred in Montana—Anaconda, Great Falls and East Helena—and in Kellogg, Idaho, at same time. Meanwhile, Montana and Idaho mines still operate yet their ores are concentrated and shipped to smelters in Japan and Korea.

Presidents Trump and Biden along with other world leaders recognized the potential strangle hold China is starting to apply. However, diversify metals production is easier said than done, are costly and take time. The PRC has the technology and the installed capacity to leverage its strategy right now.

While the rest of the world plays “catch-up”, America should increase its stockpiles, support alliances to offset China’s dominance, and encourage recycling of metals currently in the system.

However, ignoring China’s grip on the world’s critical metals supplies is no longer an option.

Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.