Nearly a hundred experts met in Montreal on May 15 at the initiative of the Ministry of Economy, Innovation and Energy to discuss the future of clean energy in Quebec. Many issues, each more relevant than the next, were addressed, but there was one major missing: the geopolitical situation and the availability of mineral resources, which are essential to the project of decarbonizing our economy.
The energy transition in which many countries and administrations, including Quebec, want to engage is in fact highly dependent on the geopolitical situation, which involves risks that it could be fatal for us to neglect. Currently, the greatest risks on the horizon are the geographic concentration of minerals needed for the transition and the near complete dominance of China, especially in refining.
It should be remembered that the transition requires minerals such as cobalt, copper, nickel, graphite, lithium and rare earth elements.
For example, an electric vehicle requires six times more minerals than a gasoline vehicle, especially for the battery.
A wind farm requires substantially more minerals than a gas-fired power plant of the same size. And electrification means more wires, so more copper.
The case of copper – the metal of electrification – is notorious and arouses the concern of several observers. According to a report by renowned analyst firm S&P Global published in 2022, “unless massive new supply is brought to market in a timely manner, the goal of zero emissions by 2050 will be out of reach. . In the XXIe century, the shortage of copper could become a destabilizing threat to international security. The challenges this poses are reminiscent of the 20th century race for oil.e century, but they could be accentuated by an even stronger geographic concentration of copper resources1 “.
Geopolitics of mines
No less than 60% of the deposits of this resource are today found in just five countries: Chile, Peru, China, the Democratic Republic of Congo and the United States.
This leads many experts to say that the geopolitics of energy will increasingly merge with the geopolitics of mines.
The other issue relates to China’s dominance in mineral refining. For about thirty years, the developed countries have been divesting themselves of their industrial production, mainly for the benefit of Asia, in order to reduce the cost of consumer products. China took advantage of this to become a manufacturing country, but also one of the transition and the minerals required for it.
Today, more than half of the world’s investments in renewable energies are of Chinese origin. China has thus developed an efficient supply chain and unique expertise.
The country now refines nearly 75% of the cobalt used in the world, about 70% of the graphite, 67% of the lithium and 63% of the nickel.
On the battery side, China produces 77% of cathodes and 92% of anodes, in addition to having control over approximately 80% of the components needed to manufacture solar panels.2.
Western states woke up very late to this dazzling development. It has been barely three or four years since these countries, including the United States, rushed to forge alliances – notably with Canada, which has great mining resources and strong expertise in the matter – in an attempt to undo so many as possible from this dependence on a single supplier. However, this will take time… In the meantime, it is to be hoped that Xi Jinping’s China will not imitate Vladimir Putin’s Russia, which has repeatedly tried to use Russian natural gas as a weapon in order to subjugate a Europe which was heavily dependent on it. Moreover, Beijing has already done so in 2010 with its mineral exports, against the United States, the European Union and Japan. The case was finally resolved at the World Trade Organization in 2014, against China.
In order to make a success of the energy transition in Quebec as elsewhere, it will be difficult to deprive ourselves of China, of its minerals and its refining capacities, as well as of the other countries which dominate the mineral market. But we will have to considerably accelerate the diversification of our supply if we wish to mitigate the risks of a geopolitical nature.