With the rapid development of modern technology, rare mineral products have not only become indispensable raw materials for civilian products such as aerospace, advanced national defense, and electric vehicles, but have also become important strategic resources internationally. In order to compete for dominance, the Chinese Communist Party (CCP) is not only restricting the export of rare metals in its country but also accelerating monopolization of the global rare metal market. In response, the United States has had to create the “Metal NATO” with its allies to establish a secure and sustainable critical mineral supply chain, countering the CCP’s challenges in the strategic resources field.
According to Kurt Campbell, the US Deputy Secretary of State, during a seminar hosted by the Carnegie Endowment for International Peace on October 2nd, the CCP believes that the United States is in decline, and now is the time to show China’s strength and force the US out of the global stage. He also mentioned that in many aspects, the United States is dealing with an assertive CCP alongside its allies, “We are entering a new era dominated by competition.”
With the continuous development of modern technology, the demand for metals like lithium, cobalt, nickel, rare earths, graphene, gallium, and titanium is increasing in various industries such as semiconductors, telecommunications, medical equipment, aerospace, solar power generation, electric vehicle batteries, and defense, making them critical products.
The CCP, through means such as government subsidies, price manipulation, and export restrictions in the supply chain of critical minerals, has gradually taken a dominant position in some rare mineral sectors and controlled the global market.
Therefore, to avoid excessive reliance on the CCP’s supply chain and the economic and security risks it brings, the United States and the European Union established the “Minerals Security Partnership” alliance (MSP) in June 2022. The CCP refers to it as “Metal NATO.”
During the 79th session of the United Nations General Assembly, MSP, consisting of the United States, the European Commission, and 13 allied countries, announced the establishment of a financing network called the “Minerals Security Financial Network.” This network aims to strengthen cooperation between participating institutions, promote information exchange and joint financing, and facilitate the establishment of diversified, secure, and sustainable critical mineral supply chains.
The 15 member countries of MSP are the G7 member countries, the European Union, Australia, Norway, Sweden, Finland, Estonia, South Korea, and India.
On September 27th, the United States and the European Union held a “Minerals Security Partnership Forum” during the break of the United Nations General Assembly. During this forum, seven new member countries were added: Congo, the Dominican Republic, Ecuador, the Philippines, Serbia, Turkey, and Zambia.
The “Minerals Security Partnership Forum” is an international cooperation platform under the MSP framework aimed at connecting non-member countries rich in mineral resources with MSP member countries to exchange policies collectively and enhance cooperation. In February of this year, Bloomberg reported from informed sources that the EU and the US intend to merge the EU’s “Critical Raw Materials Alliance” with the US-led MSP.
The forum was co-chaired by US Deputy Secretary of State Jose Fernandez and Maive Rute, Deputy Director-General of the European Commission. The forum primarily discussed how to promote sustainable production and local value-added of mineral products through policies, including enhancing regulatory cooperation, promoting fair competition, increasing transparency, and facilitating recycling, among other relevant issues.
As early as May of this year, Fernandez accused the CMOC Group, a Chinese company, of flooding the market with cobalt, thus lowering prices and making it more difficult for other companies to invest in this metal. He said, “Oversupply will have consequences,” and “This predatory behavior not only damages competition but also jeopardizes America’s energy security transformation.”
CMOC Group declined to comment on the US allegations but stated that the company is working to promote healthy development in the cobalt industry and establish a competitive and sustainable cobalt supply chain.
Chinese media reported that “CMOC Group’s impact on global cobalt prices has become crucial, with its supply and pace of changes already significant factors to consider in cobalt price fluctuations globally.” The report praised CMOC Group for its “strong rise” and its role as a “driver in reshaping the cobalt industry landscape.”
Data shows that the company produced 54,000 tons of cobalt in the first half of this year, a 178% increase year-on-year, achieving 83% of its annual target (60,000 to 70,000 tons) within that period. This increase in production with 35,000 tons of additional cobalt products in the first half of this year from CMOC Group is enough to affect the movement of cobalt prices.
Following CMOC Group’s significant increase in production in 2023, global cobalt prices continued to decline. Wind data shows that at the beginning of 2023, the average price of MB cobalt (standard grade) was $19.13 per pound, dropping to $11.25 per pound by the end of August 2023. This price is a 70% drop from the peak of $40 per pound in 2022.
The world’s second-largest cobalt miner, Glencore, believes that due to the surplus production exceeding demand, the oversupply in the cobalt market will continue until 2026.
CMOC Group’s substantial increase in production has also affected domestic peer companies in China, such as Huayou Cobalt Industry, Hanrui Cobalt, whose gross profit margins have fallen to below 10%, while CMOC Group’s gross profit margin for this year is 42.17%, an increase of 155.42% year-on-year, making it the largest cobalt product producer.
In response to international media attention and questioning, the company stated that “long-term prices will improve in a healthy and effective manner.”
On its official website, CMOC Group describes itself as a global leading copper and cobalt producer. In the Congo (Kinshasa), the company holds an 80% stake in the TFM copper-cobalt mine and a 71.25% stake in the KFM copper-cobalt mine. Both TFM and KFM are two world-class projects, with an area of approximately 1,600 square kilometers and 33 square kilometers, respectively.
With the support of the Chinese government, CMOC Group acquired the two largest cobalt mines in the Congo, leading to rapid development. The Congo holds about 50% of the world’s cobalt reserves.
The company’s business scope includes exploration, mining, refining, processing, and sales, with its primary products being cathode copper and cobalt hydroxide. The Congo (Kinshasa) is the largest cobalt-producing country, accounting for over 70% of the global production in 2023, while China is the largest global refined cobalt processing country, with a 75% share of refined cobalt production in 2023.
Additionally, the company produced 55,500 tons of cobalt in 2023, making it a leading cobalt producer globally, mainly selling cobalt hydroxide to international markets. In the first half of 2024, the Congo region produced a total of 313,800 tons of copper and 54,000 tons of cobalt, achieving an operating income of 24.368 billion yuan, a 444.78% year-on-year increase, and a gross profit of 12.316 billion yuan. The company is expected to maintain its leading market position in 2024.
Established in 1969, CMOC Group underwent two mixed-ownership reforms in 2004 and 2014, and is currently a nominally private holding company. In 2024, the company ranked 145th on the Fortune China 500 list and 24th among the top 40 global mining listed companies (by market value) in the PwC ranking.
Currently, not only does China possess the world’s largest reserves of rare earth minerals, but it also has strong extraction capabilities for key minerals like rare earths, lithium, and cobalt. China controls approximately 60% of the global rare earth mining and nearly 90% of the processing and refining capacity, holding over 50% market share in the processing of nickel, cobalt, lithium, and other minerals both domestically and internationally.
Chinese companies have been able to reduce mining and processing costs domestically and overseas by relying on extensive government subsidies, relaxed environmental regulations, and cheap labor, using unfair competitive means to sell their products internationally. This has made it challenging for peer companies in other countries to compete with them.
Furthermore, Chinese companies have heavily invested in mineral-rich regions such as Africa and South America, developing critical mineral projects for extraction and processing. Notable examples include cobalt mines in the Congo, the “Lithium Triangle” in Zimbabwe and South America, and nickel and bauxite projects in Brazil.
Fernandez told the Financial Times that the CCP is taking monopolistic measures to exclude competitors, accusing China of using “overproduction and predatory pricing” to maintain control over the global supply of critical minerals. The United States has also realized that solving this problem single-handedly is difficult and thus, has united with its allies to harness their collective strength to counter the CCP’s monopoly.
On August 15th, the Chinese Ministry of Commerce and the General Administration of Customs announced that to “safeguard national security and interests and fulfill international obligations such as nonproliferation,” they would implement export controls on six related items including antimony ores and raw materials, antimony metals and products, antimony oxide, and gold-antimony smelting and separation technology, effective from September 15th. This comes after last year’s restrictions on exports of gallium, germanium, graphite, rare earths, and other strategic minerals.
Antimony is one of the strategic metals used in military applications for manufacturing ammunition, nuclear weapons, infrared missiles, night vision goggles, as well as civilian uses in batteries and photovoltaic equipment among others. In 2023, China’s antimony production accounted for 48% of global production, with a total of approximately 40,000 tons.