China"s Renewable Energy Strategy: Dominating Global Mineral Resources

China's dominance in the renewable energy sector is significantly bolstered by its control over critical mineral resources essential for energy transition technologies. A report from Wood Mackenzie highlights that the U.S. goals of decarbonizing its energy sector conflict with reducing reliance on China, as the latter holds a substantial market share in energy minerals. In 2023, China's investment in renewable energy surged by 40%, reaching $890 billion, making it a key driver of the country's economic growth. The clean energy sector, primarily focused on wind, solar, and electric vehicles, contributed $1.6 trillion to China's GDP. China's strategy involves acquiring mining rights, particularly in Africa, and investing heavily in domestic processing facilities for minerals like lithium, nickel, and cobalt. This approach has allowed China to refine a significant portion of these minerals globally, with estimates indicating it refines 35% of nickel, 50-70% of lithium and cobalt, and nearly 90% of rare-earth elements. The International Energy Agency projects that the energy sector will account for a large share of global demand for these minerals in the coming decades. Despite efforts to transition to renewable energy in the U.S., critics argue that the shift is not occurring as intended, with increasing coal consumption alongside the addition of renewable sources. The National Mining Association has criticized the Biden administration's restrictions on mining in Alaska, suggesting that these policies hinder the development of domestic mineral supply chains. Overall, analysts express skepticism about the establishment of new smelting and refining infrastructure outside of China, emphasizing the challenges faced by the U.S. in securing a stable supply of critical minerals necessary for its energy transition goals.