How many rare earths are in my iPhone?
More than forty And not only on your iPhone, there is more on practically any mobile phone or PC; because these rare and valuable minerals are found in almost any digital technology today.
Are all rare earths in China?
Most of their mines, yes; but the most relevant thing is that in reality we do not know precisely, because the value chains of each product of these mines in our hands have been covered up. These 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 tragedy is that without knowing them thoroughly we will not be able to progress in the transition towards sustainable energies.
Can states compel disclosure?
And we could process them here too, but think how angry you would be if they put factories with these minerals – not all of them clean and harmless – next to your house. And despite that, 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, as of now, electric vehicles cannot be manufactured without them.
China has just sold electric cars in Spain: good, beautiful and cheap.
Often, Chinese manufacturers also import minerals and parts from other countries; however, because the value chains are not known, they continue to control them.
Did Beijing plan it this way or is it a coincidence?
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...
In the beginning, China produced cheaply, but not so well: almost everything was 100%.
But it was learning and leaving the multinationals enormous margins. He made billionaires of a Western elite that manufactured everything in China. Also in China the ecological requirements were non-existent or minimal. And they paid a price with their health.
Why has this cheap factory of the world become the enemy?
The party decided that the Chinese should start manufacturing more valuable technology and also design engineering, financing, marketing... The entire value chain from basic research to sales and branding. And he started doing it successfully.
With?
Pollution in China was already unbearable, and therefore abandoning outdated technologies was urgent. Their advantage was that they were latecomers to combustion technology and would never beat Germany on diesels; but they can still reign supreme in renewables – look at how they are rampant in solar panels – and they are also very good at climbing.
And those who go on strike are imprisoned.
I've reported for Bloomberg for seven years from Beijing: don't tell me. The Chinese also know how to plan and, for example, subsidize their production of renewable generators and 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 competition between them in terms of prices and quality. And every day dozens of Chinese companies that lose go bankrupt.
Will hydrogen change the rules?
There is still a long way to go before it changes and it will only work for large energy consumers. Meanwhile, in our day-to-day lives as citizens, batteries will still be the key.
What technology will prevail?
At the moment, for the energy transition we need a mixture of several.
And will China use its dominance of the rare earths as a geopolitical weapon?
Russia has shown that whoever uses its raw materials as a weapon loses, because other countries quickly find alternatives.
Should we fear China as Washington seems to preach?
I think China would rather sell us everything, starting right now with electric cars, than dominate us all.
How to relate to China?
With a smart strategy. Do we need all our value chains – from mobiles to satellites – to depend on China?
I do not think so.
Should we cooperate with China in some of them? We need to diversify in order not to depend on Beijing, but it is not profitable for us to fight.
How should we deal – briefly – with China?
The key is to diversify in everything and repatriate industry that is currently in China to our countries; but not all, and that here and there it is cleaner and more sustainable.
