How many rare earths are in my iPhone?
More than forty. And not only on your iPhone, there are and more on almost any mobile or PC; because those rare and valuable minerals are found today in almost any digital technology.
Are all the rare earths in China?
Most of your mines, yes; but what is relevant is that in reality we do not know precisely, because the value chains of each product from those mines to our hands have been hidden. Those minerals are what oil was in the 20th century, but we know little about how they end up being used.
Why have they not been revealed?
For corporate and geostrategic interests. The drama is that without knowing them in depth we will not be able to progress in the transition towards sustainable energies.
Can states force disclosure?
And we could also process them here, but think how angry you would be if they put factories with those minerals – not all of them are clean and innocuous – next to your house. And yet, if only China continues to control them, they make us dependent on Beijing.
To what extent are we already?
Many of the relevant technological value chains are already under Chinese control with strategic materials such as lithium, cobalt, nickel, graphite… And, today, electric vehicles cannot be made without them.
China has just launched electric cars here in Spain: good, beautiful and cheap.
Chinese manufacturers often import minerals and parts from other countries as well; but, since the value chains are not known, they continue to control them.
Did Beijing plan it that way or was it casual?
There was no Chinese Machiavellian plan. China simply had cheap labor and in recent decades multinationals from Japan, Korea and Western countries have been setting up their production chains there…
At first, China produced cheap, but not that good: almost everything was from everything to 100.
But he learned and left the multinationals huge margins. He made billionaires out of a Western elite who manufactured everything in China. Also in China their ecological requirements were non-existent or minimal. And they paid a price with their health.
Why has that cheap factory in the world become the enemy?
The party decided that the Chinese had to start manufacturing higher-value technology and also design the engineering, financing, marketing… The entire value chain from basic research to sales and branding. And he started doing it successfully.
As?
Pollution in China was already unbearable, so abandoning obsolete technologies was urgent. Their advantage was that they were latecomers to combustion technology and would never beat Germany in diesels; but they can still reign in renewables – look at how they sweep solar panels – and they are also very good at scaling.
And those who go on strike are jailed.
I have reported for Bloomberg 7 years from Beijing: don’t explain it to me. The Chinese also know how to plan and, for example, subsidize their production of renewable generators and thus force the Europeans to go bankrupt.
It seems that right now Washington has begun to subsidize at the expense of the EU.
Beijing, in addition to subsidizing its exporters, instigates brutal price and quality competition among them. And every day dozens of losing Chinese companies go bankrupt.
Will hydrogen change the rules?
There is still a long way to go to change them and it will only serve large energy consumers. Meanwhile, in our daily life as citizens, the key will still be the batteries.
What technology will prevail?
At the moment, for the energy transition we need a mixture of several.
And will China use its mastery of rare earths as a geopolitical weapon?
Russia has shown that whoever uses its raw materials as a weapon loses, because other countries find quick alternatives.
Should we fear China as Washington seems to preach?
I think that China seeks to sell us everything, starting right now with electric cars, than to dominate us all.
How to relate to China?
With a smart strategy. Do we need to make all our strategic value chains – from mobiles to satellites – dependent on China?
One would say no.
Is it convenient for us that in some of them we cooperate with China? We need to diversify so as not to depend on Beijing, but it is not profitable for us to fight.
How to deal – in one sentence – with China?
The key is to diversify in everything and repatriate industry that is in China today to our countries; but not all of it and that here and there it is cleaner and more sustainable.
