The United States and China are increasing competition for cobalt

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Photo: Samir Townsi (Getty Images)

US and China may be on a collision course over scarce resources, whose fallout could have a massive impact on developing countries.

Ssuperpowers fighting anxiously over valuable goods may sound familiar in connection with oil and gas. Bout the new resource battle is above metals and minerals that will drive the future from electric cars for clean energy technology.

It shows a recent New York Times investigation, which used previously classified diplomatic cables and interviews with more than 100 people spread across three continents to draw a picture of the fight for cobalt. The study focuses specifically on the southwestern region of the Democratic Republic of Congo called Kisanfu, which is home to one of the world’s largest cobalt reserves.. Congo as a whole is responsible for producing over 70% of the world’s cobalt supply, according to Reuters.

The report tracks Chinese companies increase efforts cobalt extraction in Congo back to 2016, where a large U.S. mining company sold two massive cobalt reserves to a Chinese conglomerate China Molybdenum. Chinese mining companies have since been on a shopping spree in the county and locked up up a large part of the global cobalt supply chain.

According to the Times, 15 of the 19 cobalt-producing mines in the country are now owned by Chinese companies that have received at least $ 12 billion in loans and financing from state-sponsored institutions. The five largest companies have a credit line that fluctuates around as much as $ 124 billion. The United States has meanwhile fallen behind – and has even let cobalt assets slip out of its grip. It has set the stage for a great battle for the energy of the 21st century, with Congolese workers and residents trapped in the center.

Congolese officials have accused one of these mining companies, China Molybdenum, of withholding payments to the government. As cobalt production has increased rapidly since Chinese firms took over, at least a dozen employees and contractors at a Think Fungurume mine complained of a “drastic drop in safety and an increase in damage, many of which were not reported to management.”

The report comes as the U.S. Senate prepares vote on Build a better bill back, which would include $ 320 billion in extended renewable energy tax deductions and electric vehicles and an additional $ 110 billion to improve U.S. renewable energy technology supply chains. These investments will be crucial if the country and the automakers have any chance meet EV and clean energy set goals for the next decade. For some reason, President Biden has promised to decarbonize the grid by 2035 and set one Goal of making half of all sales of new American cars electric by 2030. He has Used that the weight of the federal government to start the EV transition, and Build Back Better would add more juice to it and the goals of clean energy. But there is a lot of work to do between now and then; -one report from LMC Automotive suggested it this share is expected to be less than 4% this year.

But analysts and experts are already warning of an upcoming EV battery shortage that could look like the current global shortage of semiconductors is rattling supply chains. In the United States, electric car manufacturers just like Tesla too as traditional brands like General Motors and Ford are preparing to increase their demand for cobalt and lithium dramatically in the coming years as they increase electricity production. To could load already shaky supplies.

Some of these effects are already being felt according to one report published last month by Benchmark Mineral Intelligence, which found an increase in battery cell prices in parallel with an increase in commodity prices, especially for lithium. If countries continue to move towards meeting the necessary climate goals, tInternational Energy Agency warns supplies from existing mines may only be able to meet half of the lithium and cobalt needs by 2030.

Biden, for his part, made clear his administration’s ambition to increase the mineral race with China during a visit to a General Motors facility last week, the Times notes.

“We risked losing our lead as a nation, and China and the rest of the world are catching up,” Biden said. “Well, we’re turning it around in a big, big way.”

So far, the global push towards renewable energy technology seems to be following a well-known manuscript, with a handful of major players competing fiercely on the global stage to extract valuable resources, likely at the expense of local geography, ecology and communities.

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