The Daily Signal - INTERVIEW | How China Is Dominating African Minerals, and Why US Should Care

Episode Date: March 1, 2023

An energy expert is sounding the alarm over the Chinese Communist Party's dominance of African minerals.  "It's such an important topic because President [Joe] Biden and the governor of California, Gov. [Gavin] Newsom have the goal of having all new-vehicle sales in the United States battery-powered electric by 2035, so if we're going to have all electric vehicles with batteries, we need the minerals for those batteries, and the United States used to produce those minerals," says Diana Furchtgott-Roth, director of the Center for Energy, Climate and Environment at The Heritage Foundation. (The Daily Signal is the news outlet of The Heritage Foundation.)  Lithium brine and cobalt and nickel ores are among the minerals needed for electric vehicles with batteries, Furchtgott-Roth says.  "As recently as 1990, the U.S. was the world's No.1 producer of those minerals. Today, we are in seventh place. Even though we have vast mineral reserves worth trillions of dollars, we are now 100% dependent on imports for some 17 key minerals, and China is a significant source for many of those minerals," she says.  Furchtgott-Roth explains how China "can go to Africa and purchase vast tracts of land in the Democratic Republic of the Congo, for example, where it can get out the cobalt," and that Beijing "doesn't have problems with using children to mine for these minerals or using slave labor in Xinjiang to mine for these minerals." "So, China has all kinds of business advantages that we in the United States do not have," she says. Furchtgott-Roth joins today's episode of "The Daily Signal Podcast" to discuss what the U.S. can do to have more influence in Africa, why the U.S. should be more active in reducing China's role in regard to African minerals, and the connection between "environmental, social, and governance" policies and China. Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Daily Signal podcast for Wednesday, March 1st. I'm Samantha Sherris. Over the last few weeks on this show, we've talked about the rising threat of the Chinese Communist Party. From the Chinese spy balloon to reports that it could supply Russia with lethal aid in its war against Ukraine, the CCP's threat is both real and unwavering. Today, we are going to dive into China's role in Africa, specifically relating to its monopoly over African minerals. Joining today's show is Diana for Scott Roth. She is the director

of the Center for Energy, Climate, and Environment here at the Heritage Foundation, and is the Herbert and Joyce Morgan Fellow in Energy and Environmental Policy. We'll get to my conversation with Diana right after this. This is Mike Howl at the Heritage Foundation. I know how the left and the deep state operate, because I've seen it from the inside. When I was working for the Trump administration, I learned how the left made our lives miserable and how they continued to think they can play by their own rules. Well, now we're taking all of these tricks and tactics that were deployed against the Trump administration

and turning them against the Biden regime. Through the work of the Oversight Project, we're exposing the Left for what they are and embarrassing some actors responsible. We're using strategic foias and fearless litigation to force these bureaucrats to deliver documents they'd prefer to never see the light of day. But for our work to be successful, we need patriots like you to stand with us.

You can take action now. Visit heritage.org slash oversight to learn more. There's no time to waste. Joining today's show is Diana Frischott Roth. She is the director of the Center for Energy, Climate, and Environment here at the Heritage Foundation. It is a Herbert and Joyce Morgan Fellow in Energy and Environmental Policy. Diana, thank you so much for joining us. It's great to be with you.

So I want to talk about an event that you hosted earlier this week at the Heritage Foundation about shattering China's energy dominance in African minerals. It was a really interesting event and focused on a topic that is incredibly important, but maybe doesn't receive as much attention. First and foremost, can you tell us a little bit about African minerals and why they are so valuable? Thank you, Samantha. It's such an important topic because President Biden and the United States, and the governor of California, Governor Newsom, have the goal of having all new vehicle sales in the United States battery powered electric by 2035. So if we're going to have all electric vehicles with batteries, we need the minerals for those batteries. And the United States used to produce those minerals. As recently as 1990, the U.S. was the world's number one producer of those minerals.

Today, we are in seventh place, even though we have vast mineral reserves worth trillions of dollars, we are now 100% dependent on imports for some 17 key minerals. And China is a significant source for many of those minerals. Even if we don't have 100% battery-powered electric vehicles in 2035, and I, for one, don't think we will, there's still the question of how are we going to get the minerals for those battery electric vehicles that we have? We don't want to be dependent on a foreign country

that's not particularly friendly towards us for the batteries in our battery part vehicles. And many of those minerals come from Africa. China has a very substantial presence in Africa. and is making inroads in mining those minerals and buying up the land that contains those minerals. So that's why we had the event today. We had two specialists from Africa.

We had Francois Baird of Baird USA. We had Tierra Tano, the former Energy Minister of Cote d'Ivoire. And Francois Bede is from South Africa. So we had two people from Africa to tell us about how the United States could be doing better. You brought up a really interesting point there about how back in 1990 the U.S. was the number one producer of minerals and now it's number seven. Can you expand a little bit about what happened with our ranking and with our production of these minerals? and how can the U.S. improve its chances of becoming or working to become number one again? Well, we could be number one again if we had the permits to get our minerals out of the ground,

but it's becoming more and more difficult for states to give companies the permits for mining these minerals. In other words, they're in the ground, but companies can get the permits. permits to get them out. There's either a federal problem or a state problem or a local problem. So it's become very difficult to do mining in the United States. And it shouldn't be like that. I mean, if we have the goal of 100% battery-powered electric vehicles, we should also be giving private companies permission to mine those minerals that are needed for the batteries here in the United States. but we do not have that permission.

And that's why China has an advantage. First of all, China can do the mining for minerals such as lithium in China, where it has vast reserves. Second, it can go to Africa and purchase vast tracts of land in the Democratic Republic of the Congo, for example, where it can get out the cobalt. China also doesn't have problems with using children to mine for these minerals or using slave labor in Xinjiang to mine for these minerals. So China has all kinds of business advantages that we in the United States do not have. Yes, I wanted to talk more about China's role and how it's monopolizing these key minerals that you just brought up. If you could speak to what's at stake with China having this monopoly from the U.S. perspective? Yes, but beforehand, I just want to say how many minerals are needed for an electric battery.

So battery weights vary from 1,000 to 2,000 pounds. And a single electric car battery weighing 1,000 pounds requires extracting and processing some 500,000 pounds of materials. So averaged over a battery's life, each mile of driving an electric car consumes about five pounds of earth. And there's a lot of mineral mining required. So lithium brines typically contain less than one-tenth of a percent of lithium. So that entails some 25,000 pounds of brines to get 25 pounds of pure lithium for your. 1,000 pound battery. And cobalt ore grades average about one-tenth of a percent.

So that's nearly 30,000 pounds of ore to get the cobalt needed. Nickel ore, that average is about 1%. So that's about 6,000 pounds of ore for an electric battery. And it goes on with these other minerals. We need vast amounts of them. That is really interesting. And when we think about these minerals and how many are needed and this role that China has with being able to, as you were talking about, go in, get these minerals basically at any

cost necessary. You know, from the U.S. perspective, why is this concerning? Why should we be more active in reducing China's role in this? Because we don't want to be dependent on China for anything. What we've seen with Russia's role in Europe, Russia cutting off natural gas to Europe, is that a shock in the supply can cause immense economic problems. We saw this in the 1970s with the OPEC oil shock, where American automotive technology just dramatically changed to have cars smaller and lighter when the price of oil went up.

We don't want to be in a position where China cuts off batteries to the United States, and we are entirely dependent on battery electric cars, and then we can't drive anymore. Now, this is a reason, by the way, for not moving too much in the battery car direction, because we have cars with internal combustion engines. 95% of cars sold have an internal combustion engine right now. We have vast reserves of oil and natural gas here in the United States. We are energy independent as far as oil and natural gas goes, and we can use our own resources for cars with internal combustion engines.

But for some reason, some people want to move. completely in the direction of battery-powered electric vehicles, which means that we would be dependent on China as things stand right now. So either we have to give up our dreams of an entire fleet of battery-powered electric vehicles, or we need to develop the minerals ourselves here in the United States. We don't want to be dependent on China for these minerals. We've seen what happens when Europe is dependent. on Russia for oil, or when the United States is dependent on OPEC for oil, as we were in the 1970s.

If we're dependent on any country, we want to be dependent on countries that are more friendly towards us, and African countries have the potential to be very friendly towards us, and we can make arrangements with them to have our companies mine the minerals, rather than just simply saying the African continent is the purview of China, and we're going to leave Africa to China. This is not something we want to do. That's why I held this event today to invite Francois Baird from South Africa and Cheritano from Cote d'Ivoire in to give us the benefit of their experience.

I want to talk a little bit more about any legislation that you, think should happen at the local state or even national level regarding our ability here in the United States to be able to access these minerals? So there's federal legislation, there's state legislation, there's local legislation. And on a local level, tribes and any other groups are able to hold up permits for mining. And this isn't just a matter of permits for mining. We are having trouble getting permit approvals for pipelines to carry our oil and natural gas from where they're produced to where they're needed.

We have problems with approvals for major infrastructure projects, such as bridges and roads and airports. Anyone can hold anything up. So we really need proper permitting reform here in the United States, not just just for mining, but across the board. And we need to be thinking about whether we should be, perhaps at some point, overriding states' refusal to say no. For example, we can't get a pipeline to take our oil from the Marcellus Shale in Pennsylvania up to New England. So New England is dependent on ships refueling in Boston Harbor, oil, in Pennsylvania, and

order to enable New Englanders to get enough heating in the winter. And it used to be that these were Russian ships. And nothing makes less sense than to have Russian ships bringing oil to New England when, just a little way away, just in Pennsylvania, we're producing enough natural gas from the Marcellus shale to be able to heat oil of New England in a cleaner way, in a less expensive way, but because we can't get that pipeline built, because of the permitting problems, then we have to be dependent on oil ships refueling New England. So this is a very difficult problem and congressional legislation could indeed solve it by

allowing certain forms of overriding states. However, we have the best government in the world due to our founding fathers and one characteristic of our government is that we have checks and balances, not just the executive branch, the judicial branch and the congressional branch, but also within the congressional branch, we have the House and the Senate. And right now we have the Senate that's controlled by the Democrats, the House is controlled by Republicans. We have gridlock. That means bad bills can't get through, but also good bills can't get through. And I think one of the wonderful things about the United States is that it's so hard to pass a law? And all my European friends think that's very silly. Well, Diana,

why wouldn't you want as many laws passed as possible? Well, the majority of laws really impede competition and business activities and really don't do that much good and make it much easier to raise taxes. So you find in Europe you have a high income tax, 40 to 50%, you have a value-added tax, 20%, you have a high pension tax. These are very, very easy to put on. At least in our country, it's more difficult, which I think is part of the reason for our high GDP growth compared with other countries.

But to cut a long story short, this makes it more difficult to have permitting reform. It is theoretically possible, but I don't see it in the next couple of years. I want to shift topics a little bit, still in regard to China, but specifically over the last few months, we've seen more and more conversations about ESG or environmental, social, and governance policies. Can you first explain for our listeners what ESG is?

Well, environmental social and governmental policies is a catch-all term for people who want to basically promote a certain agenda of not using conventional fuels for the environmental part and for the social part having diversity, equity, and inclusion, which I prefer to say diversity, inclusion, and equity, because the acronym is die, and that's often what happens to businesses who take up this. And what we find in the environmental area, which is what we're concerned with right now, is that the the use of conventional fuels is discouraged and the use of renewable fuels and renewables such as wind and solar are encouraged. And the idea is, and it's a very well-intentioned idea, that this reduces global emissions and the global emissions contribute to global warming and global warming

hurts the planet. And the people who propound ESG policies are concerned about the environment and are concerned about our planet. And we have to respect them for this. But in practice, the United States has vast reserves of clean natural gas. Our carbon emissions have gone down by about 900 million metric tons over the past 15 years. And getting rid of our energy-intensive industry by making it go to China or Russia or India or other places that produce most of their electricity through coal-fired power plants that raises global emissions. So, for example, if you have cars manufactured here in the United States, there are certain regulations as to how much carbon can be put up in the air. Carbon scrubbers tend to take some of it out.

natural gas that doesn't produce a lot of emissions. But then when you get that same car company and you take it over to China, this car is made with coal-fired power plants and the coal in China is dirtier than the coal in Wyoming. So that produces more global emissions. So if we're in favor of reducing global emissions, we want to use more clean natural gas and we want to spread the technology of clean natural gas and fracking to other parts of the world so that they can use it too. So ESG proponents are very, very well-intentioned,

but sometimes there are unintended consequences to what they want to do. And if you could, just for our last question, if you could talk to the connection between ESG policies and China. ESG policies are connected with China because quite a lot of what people want to do with ESG policies here, result in more dependence on China. So ESG policies generally require more renewables, more solar panels and more wind turbines.

Seven of the largest solar panel makers are in China. Seven of the largest wind turbine manufacturers are in China. These wind turbines are produced with fossil fuels, with coal-fired power plants. So are the solar panels. and they're shipped over here, which also has its own carbon footprint. So the ESG policies make us more dependent on China for renewables, more dependent on China for electric batteries,

and they don't reduce overall global emissions. People talk about battery-powered electric vehicles being emissions-free, but they're not emissions-free, because when you charge them, the electricity that is produced to charge, these battery pad electric vehicles creates emissions. This electricity is not being produced by nuclear power, which would be emissions free. It's not being produced by hydropower. It's not generally being produced by solar and wind completely. It's being produced by electricity that creates

emissions. So ESG is linked to China in that a lot of ESG policies make us more dependent on China and that's not where we want to be. It's okay to be dependent on a country that's more friendly towards us such as Canada. We want to be importing Canadian oil and refining it in our refineries to turn into gasoline and diesel and everybody knows we need more diesel looking at the difference in price between diesel fuel and gasoline these days. Purchasing things from Canada benefits both our countries, but becoming dependent on China is a little like Europe being dependent on Russia for natural gas. You don't know when it can be cut off.

And you don't know when the supplies just end and where there would be a shock to your economy. It's not a position we want to be in. We want to have energy security, national security. And that means using our own resources with all those of our friends. So, Dana, I also wanted to ask what the U.S. can do to have more influence in Africa? Well, that's a great question, Samantha, and our two panelists, Thierry Tannot and Francois Baird,

both said that, first of all, we should not look on Africa as monolithic. Each country is different, and we have to make overtures to each country separately, and each country has different demands and different ways in which we could be active. both of them were saying that it's very important to look at the rule of law because if you're a business and you're digging holes in the ground to get out the minerals,

you don't want a country just to come and take away your hole in the ground because that's the end of your investment. So we need to see what we can do to encourage the rule of law in different African countries. We need to see what we can do to encourage education in Africa so that children are not sent down into the mines. We need to see what we can do in terms of working with African leaders to fund different kinds of infrastructure around the mines so that some companies would find it easier to embark on mining operations. But the most important thing we can do is to transfer our principles that we take for granted here in the

United States about the rule of law to countries in Africa, see if we can encourage the rule of law so that when our companies make an investment, they know that they're going to get a return, that their mind isn't just going to get nationalized and given to some local company or potentially some Chinese company. Well, Diana, thank you so much for joining us today. It was so great to have your insight once again on our show. I'd love to have you back on in the future to talk more about this topic and much more. So thank you so much.

Anytime, Samantha. Thanks so much for having me on. And that'll do it for today's episode. Thank you for listening to My Interview with Diana. If you haven't gotten a chance, make sure you subscribe to the Daily Signal wherever you get your podcast. and help us reach even more listeners by leaving a five-star rating and review. We read and appreciate all of your feedback. Thanks again for listening.

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