US Senators Introduce Legislation To Monitor China’s Overseas Mineral Investments

March 6, 2020 Updated: March 6, 2020
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Two U.S. senators on March 5 introduced legislation drawing attention to China’s plans to dominate rare earth supplies in other countries through its “One Belt, One Road” foreign policy initiative.

Rare earths are a group of minerals used to manufacture a range of consumer products and military technologies, including smartphones, electric vehicles, satellites, missiles, and semiconductor chips that power all electronic products.

Senators Mitt Romney (R-Utah) and Catherine Cortez Masto (D-Nev.) proposed legislation that would require the director of national intelligence to submit a congressional report, at least once annually, assessing the extent of China’s mineral investments through its One Belt, One Road (OBOR, also known as Belt and Road) initiative.

“The U.S. must monitor China’s mineral investments to prevent mineral assets in developing countries from becoming beholden to the Chinese government and to thwart any efforts to weaponize those mineral investments against us,” Romney said, according to a press release.

Beijing rolled out OBOR in 2013, with the objective of increasing geopolitical influence by building up trade routes linking China, Southeast Asia, Africa, and Europe.

Through OBOR, the Chinese regime has been accused by critics of putting developing countries into a “debt trap” by offering unsustainable loans, while exploiting their natural resources like timber, crude oil, and minerals to drive the Chinese economy.

A part of the report would include an assessment of whether China’s efforts to acquire minerals through OBOR “counter or interfere with the goals of the Energy Resouce Governance Initiative” by the U.S. State Department.

The State Department’s initiative aims at “promoting sound mining sector governance” while engaging with other countries.

The proposed legislation is an amendment to the American Energy Innovation Act (AEIA), a bipartisan Senate bill introduced by Senators Lisa Murkowski (R-Ala.) and Joe Manchin (D-W.Va.) last week, intending to modernize the U.S. energy laws.

“Not only will this legislation bolster U.S. national security by ensuring the Administration is monitoring Chinese investments in vital resources and keeping Congress informed, but it will also protect American industries and help Nevada’s growing critical mineral operations access information relevant to industry market competition,” Cortez Masto said in the press release.

Rare Earths

China produces over 70 percent of the world’s rare earths, as the result of its cheap labor, lax environmental regulations, and rich deposits—about 35 percent of the world’s rare earth deposits are in China.

The United States is heavily dependent on China for its rare-earth needs, buying about 80 percent of its mineral imports from China from 2014 to 2017.

Despite its own rich rare-earth deposits, China lacks three key minerals inside its border: cobalt, lithium, and platinum-group metals, according to a 2019 report by Foreign Policy.

Lithium is a critical element used to manufacture batteries to power smartphones and electric vehicles. According to Foreign Policy, in 2017 China had stakes in 61 percent of lithium production in Australia, 67 percent in Chile, as well as having stakes mining projects in Argentina and Bolivia.

In terms of cobalt, which is used to manufacture products such as electric vehicles and satellites, China, as of 2017, influenced over 52 percent of cobalt production in the Democratic Republic of Congo, the report said. In 2017, Amnesty International raised concerns that Congolese children were being exploited to mine cobalt, which ended up at a Chinese processing company.

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