Can the White House be so naïve as to not get what the Chinese Communist Party (CCP) is doing with its ties to sales of US lithium mined in Nevada? Nearly every piece of battery-powered electronic equipment produced by the commercial and defense industries depends on a reliable source of lithium. Because the need is so immense, even Elon Musk last May said he is considering starting an independent lithium mining operation. More troubling is how the People’s Republic of China (PRC) is dominating the metal’s worldwide supply chain.
“Today, Chinese companies hold key positions in the global lithium supply chain, both upstream and downstream, representing roughly 80% of battery cell manufacturing as of 2021,” Dillon Jaghory explained in a Nasdaq.com article. As a result, the PRC, like a spreading malignancy, is infecting nearly every aspect of US technology infrastructure critical to American national security and daily life.
China Could Benefit From US Lithium Mining
Lithium Americas, a Canadian enterprise, wants the United States to help the CCP. “A Canadian company hopes to use Biden administration loans to open the largest lithium mine in North America. But first, it must convince government officials and prospective partners that it’s adequately decoupled from its top shareholder: a Chinese enterprise led by known Chinese Communist Party members,” Colin Anderson reported in The Washington Free Beacon. However, Lithium Americas, with its major investor, Chinese mineral behemoth Ganfeng Lithium, intends to split the company in order to isolate its PRC-controlled partner from operating and financial decisions.
The Department of Defense has vowed “to fleet up with electric vehicles (EV), replacing all of their approximately 170,000 ‘non-tactical’ cars and trucks,” Liberty Nation reported. With current technology, every one of those non-tactical vehicles requires a lithium-ion battery. However, the problem is more than just the aspirations of Joe Biden’s green future: Warfighters in the field and in garrison depend on a reliable, robust lithium-based battery supply chain. And the Biden administration is hellbent on 50% of American vehicles being electric by 2030, just seven short years away. If circumstances don’t change rapidly and dramatically, Beijing will hold the United States hostage to the vagaries of its worldview and dominance in mining and refining lithium.
“China’s ability to hamstring American industry and defense must be mitigated,” warns Steven Bucci, a former top official in the Pentagon and visiting research fellow at the Heritage Foundation, writing in The Daily Signal. “Action must be taken to alter this disastrous ambush in the making, and it must be taken now.” Make no mistake: The PRC is a threat to the United States economically and militarily, with a stranglehold on the lithium supply chain. Again, as Jaghory explained:
“Chinese companies have already transformed the global lithium supply chain but are continuing to innovate at a rapid pace. As a testament to their importance in the industry, as of Aug 18, 2022, Chinese companies made up 41.2% of the Solactive Lithium Index, which is an index designed to track the performance of the largest and most liquid companies active in the exploration and/or mining of lithium or the production of lithium batteries.”
Congressional Objection to China Investing in US Lithium
The intention to decouple is not likely to deter the PRC from exercising financial control through its numerous other subsidiary lithium mining and production enterprises in South America and elsewhere. “Lithium Americas’ assurances that Thacker Pass is 100%-owned by them rather than Ganfeng are insufficient to resolve national security concerns, given the Party’s considerable stake in the company,” Sen. Tom Cotton (R-AR) wrote in a letter to Secretary of Energy Jennifer Granholm. “The US government should apply strict oversight regarding potential federal funding of CCP-owned or -controlled entities.” Former Secretary of State Mike Pompeo and Rep. Mike Waltz (R-FL) have echoed Cotton’s concern regarding China’s tentacles around this crucial national security need.
The United States has a too-slim grasp on the critical resources and supply chains necessary to ensure warfighters have the lithium-battery-powered systems required. For the US to underwrite loans to Lithium Americas to mine the precious metal in Nevada while the company is heavily involved with China is not acceptable. US policymakers can, and must, do better.
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