By Allison Proffitt
February 2, 2021 | Defining critical raw materials is an exercise in responding to socio-economic forces, Alison Saxby said last month during the Advanced Automotive Battery Conference Europe. Saxby is Managing Director at Roskill Information Services.
In the 18th century, British economists were most concerned about food scarcity, but that focus shifted to coal to drive industrial production in the 19th century. Today, new technologies, geopolitical forces, trade wars, and sustainability drive perceptions of scarcity and the definitions of critical materials.
But defining critical materials varies by counties. In the United States and Europe, critical materials are generally defined as metals and minerals of high economic importance and at risk of supply shortage. CRM Alliance in Europe particular flags materials that are, “not only ‘critical’ for key industry sectors and future applications, but also for sustainable functioning of the economy.”
But China has taken a different approach, Saxby said, instead defining critical raw materials as those a state has in abundance, and for which it can use its dominant position in the global supply chains to gain an international competitive advantage (she quotes Chen and Wang, 2007).
In the 1950s—in response to similar moves from the US and USSR—China formed the State Reserve Bureau, a state planning bureau to assess raw materials and make strategic decisions based on perceived scarcity. By the 2000s, strategic mineral resource planning had become a key focus of policy and planning documents in China.
A turning point was when the “Go Out” policy was adopted, Saxby said, “the effects, of which, today are striking.” In 2001, Premier Zhu Rongji called for the establishment of a strategic mineral stockpile. For example, China took pains to secure Congolese feedstocks of crude cobalt hydroxide to supply its domestic refineries. In 2020, China has a cobalt-refining capacity of 183,000 tons—75% of global, operational capacity.
“Chinese define critical materials through a different lens,” Saxby said. China has its own prioritization and categorization scheme for critical raw materials that doesn’t always align with other views. In the 2010s, China’s Five Year Plans all included the terms “staple mineral”, “advantageous mineral”, and “strategic emerging mineral.” And the National Mineral Resource Plan (NMRP) for 2016 introduces a catalogue of 24 strategic energy-, metallic, and non-metallic minerals.
Of materials commonly used in electrical vehicles, China considers nickel and copper critical materials, while the US, Europe, and Australia don’t include either on critical materials lists. Alternatively, titanium and niobium are flagged as critical by US, Japanese, European, and Australian regulators and not by China.
Like all countries, China has made policy decisions that aligned with its assessment of critical materials. “Policies have been adopted to strengthen China’s domestic supply capacity of materials defined as strategic—especially where China controls the global supply chains, such as rare earths,” Saxby said. In some cases, this has meant protecting mineral deposits and increasing barriers to export.
And it has worked.
China is the source for 98% of the rare earth elements. China has invested heavily in refining capacity as well. Chemical refining of cobalt and nickel are both dominated by China; refining of lithium is dominated by China and South America. While China supplies 48% of graphite overall, spherical graphite—the form of graphite used in Li-ion batteries—is produced almost exclusively in China. Thermal purification, an alternative production method, is currently much more expensive.
In total, China produces 66.7% of the world’s cathode materials, and a majority of the anode materials
