The global race for critical minerals
China tightens its grip on critical minerals, including in Tibet
As the transition to a greener economy accelerates, how is the global race to control the extraction and refinement of critical minerals shaping geopolitical tensions and environmental concerns?
The green transition is triggering a global race to develop and deploy renewable energy technologies. But the devices that will power a greener economy - from electric vehicles to photovoltaics - require vast amounts of minerals. Many of these so-called “critical minerals'', which include iron, nickel, copper, cobalt, coltan, lithium, and rare earths, are globally distributed. Paradoxically, the push to slow climate change could, if poorly managed, generate significant environmental damages. Against a backdrop of deepening tensions between China and the US, and the protracted war between Russia and Ukraine, the competition over who controls their removal and refinement is heating-up. Countries and territories with significant supplies - including Tibet - are in the cross-hairs.
The People’s Republic of China (PRC) is currently winning the global scramble to secure critical minerals and rare earths. PRC is among the largest producers of selected critical minerals and rare earths, controlling vast reserves inside and outside its territory. China is also a major power when it comes to processing raw materials. China accounts for roughly 64 percent of the world’s rare earth mining and 85 percent of all rare earth processing. This gives China enormous leverage, especially when combined with measures to control the flow of minerals and refining technologies: Indeed, Beijing has imposed as many as 13,000 export restrictions as of 2020 heavily influencing the availability (and price) of raw materials. What is more, China is already a global leader in manufacturing green technologies, from solar panels and wind turbines to magnets and conductors.
The PRC is currently winning the global scramble to secure critical minerals and rare earths.
As part of its wider strategic ambition to control critical mineral and rare earth supply chains, China is aggressively expanding its extractive activities in Tibet. Indeed, control over the Tibetan plateau - a region spanning 2.5 million km2 (approximately the size of Western Europe) - is a geopolitical priority for the PRC leadership. Tibet is no stranger to Chinese influence, having experienced a crackdown on Tibetan-medium schools, religious centers, and other aspects of Tibetan culture. China is also expanding railway, road and telecommunications infrastructure in Tibet, extending its control and influence over mobility, communications and commerce, as part of a long term strategy for the region. China has also broadened its control of water resources, a significant factor since Tibet is widely known as the “third pole” and a source for thirsty Chinese and Indians.
The critical mineral rush in Tibet
China’s approach to controlling Tibet’s vast mineral resource wealth is fourfold. First, PRC is involved in both ownership and extraction, with its state owned enterprises dominating the extraction and mining sectors. Second, China’s also tightening up regulatory, environmental and licensing controls over rare earth mining, favoring state companies and excluding foreign operators. China is even considering an export ban on rare earth magnet technology, essentially leveraging rare earth tech as a bargaining chip in response to the US’s semiconductor restrictions. Third, China also applies export quotas on critical minerals and rare earths, including those sourced from Tibet, thus maintaining prices and exerting influence over countries that depend on these resources. Finally, China has also achieved a degree of vertical integration, essentially controlling the entire supply chain from mining to processing and manufacturing.
China’s also tightening up regulatory, environmental and licensing controls over rare earth mining, favoring state companies and excluding foreign operators.
New research from SecDev based on publicly available data in Chinese and English reveals that the Tibetan Plateau is a vast source of critical minerals. In general, most mineral deposits are located in the southern, north-eastern and south-eastern regions of Tibet, which are more accessible for geological research and extraction. According to official figures, the PRC has registered close to 6,000 discrete mining sites within the historical boundaries of Tibet. Approximately 2,000 of these are already being mined or in the planning of stages for extraction (see Figure 1). These minerals include non-ferrous metals such as aluminum, cobalt, copper, mercury, nickel, and zinc (over 3,600 deposits), hydrocarbons such as coal (more than 1,600 deposits), rare earth metals and elements (roughly 600 deposits) and scattered elements such as cadmium, gallium, selenium and thallium (54 deposits). Excluded from this sample are ferrous and precious minerals. The larger the deposits, the more lucrative for potential exploitation. Roughly a third of all discovered deposits in Tibet are classified as medium, large and extra-large, making the region especially promising for mining.
Figure 1. Distribution of mineral deposits by size
Source: SecDev (2023)
Figure 2. Distribution of lithium deposits
Source: SecDev (2023)
The estimated value of critical minerals in the Tibet Plateau is significant. Take the case of lithium. At least three of the twelve largest lithium deposits in the world are in China and roughly two thirds of explored reserves are believed to be in the Tibetan Plateau (primarily in the Qaidam Basin) (see Figure 2). At the beginning of 2022, a new deposit was discovered in the Himalayan region that could contain as much as one million tons of lithium oxide. All told, there are an estimated 1.5 to 3.4 million tons of lithium in the Tibetan Plateau, valued at up to $240 billion in current prices. Taken together, the total potential value of proven reserves for certain mineral resources including lithium, copper, nickel, lead, zinc and known hydrocarbons could amount as much as $3.5 trillion, though this figure does not include costs of extraction, refinement, storage or transport.
Figure 3a. Used mineral deposits
Source: SecDev (2023)
Figure 3b. Unused mineral deposits
Source: SecDev (2023)
Virtually half of all mineral deposits detected by SecDev in the Tibetan Plateau (for which utilization status is indicated) is either a mined deposit or is slated for mining in the future. This is a comparatively high rate of utilization for a region as geographically and geologically complex as the Tibetan Plateau. One possible reason for the high proportion of ongoing mining is that many deposits have only recently been discovered. Indeed, these reserves have yet to be exploited precisely because most other potential mining sites in China have been surveyed, are more accessible, and already mined (see Figures 3a and 3b). Likewise, there is evidence of significant levels of active investment in transportation, electricity production and transmission, and refinement and processing infrastructure in the Tibetan Plateau. Most of the actual and planned mining identified by SecDev is located in the northeastern and southeastern regions of historical Tibet including Qinghai and Sichuan provinces.
The total value of proven reserves for certain mineral resources including lithium, copper, nickel, lead, zinc and known hydrocarbons could amount to as much as $3.5 trillion.
Historically, there have been at least four stages of mining in the Tibetan Plateau. The first phase occurred during the early period of Chinese control over Tibet in the 1960s, and was confined primarily to the Tsaidam Basin (an area rich in oil and natural gas, as well as minerals). The second phase consisted of an environmentally destructive gold rush in the 1980s and 1990s, mostly in the Kham and Amdo rivers. A third phase was initiated with large-scale mining led by PRC state-owned enterprises focused on minerals commanding high global prices. The fourth phase only recently started and involves extraction of strategic minerals, especially lithium and rare earths. This is accompanied with significant energy outlays for mining, purification, and transportation. Expansion in mining is also coinciding with expanded investment in hydroelectric power plants and railway lines.
China’s strategic bet
Tibet and its mineral resources are one several strategic bets that the PRC authorities are making in their pursuit of geopolitical and economic superiority. Rising tensions between China and the US, coupled with China's expanding political, military and economic ambitions, pose many challenges and at the same time opportunities for the Chinese ruling regime. Access to and control of critical minerals, rare earths and non-ferrous metals is assuming a top priority for China. By deepening its influence and influence in the Tibetan Plateau, China will be in a better position to reduce its dependence on other countries while strengthening its global dominance across supply chains.
For the PRC authorities, the development of mineral resources also presents an opportunity for the further political and social integration of Tibet into the Chinese economy.
Control over critical minerals is especially important due to their demand in such most promising areas as green and nuclear energy, superconductors, electronics and semiconductor industries. China's desire to ensure its own autonomy in critical minerals extraction, refinement and technology development can provide its leadership with strategic advantages. For PRC authorities, the development of mineral resources also presents an opportunity for the further political and social integration of Tibet into the Chinese economy. The active development of transport and energy infrastructure in Tibet, as well as industrial capacities for the mining and processing industries, creates conditions for a more extensive involvement of the Tibetan population in economic activities, forcing them to abandon their traditional foundations and way of life. In this way, China is achieving enduring political objectives: through ever wider economic involvement, the social and cultural assimilation of Tibet can be more rapidly achieved.
Enjoying Flashnotes?
We provide tailored premium subscription levels to match your specific requirements. Our comprehensive coverage spans from geopolitical risks to technology foresight, backed by specialized research. We utilize cutting-edge open-source artificial intelligence for our analysis, drawing upon publicly available and exclusive curated data sources. Reach out to us and let's discuss how we can serve your needs.
Download Secdev White papers
About SecDev
SecDev is next generation consultancy working at the intersection of geopolitical, digital, urban, energy and cyber risk. Our mission is to deliver high quality, data-driven advice, and solutions by seamlessly integrating human and artificial intelligence. Our global network and ability to see ahead of the curve earns us the trust of global leaders in business, government, and intergovernmental organizations. We foster transformative change and to create enduring value for a better, more secure future.
www.secdev.com
