8.2 Working with Key Partners
to Achieve Cooperation
Enhancing the governance of metals and minerals supply chains will mean forging partnerships
with key players, some of whom are established
partners and others newer partners. On the supply
chain side, the China Chamber of Commerce of
Metals Minerals & Chemicals Importers &
Exporters could work with the European Commission and United States Geological Survey,
both of which already maintain data and information on reserves and production.
Dialogues between producers and consumers
will also be vital, China could encourage G20
states to engage constructively with regional
forums, such as the Community of Latin American and Caribbean States (CELAC) and the
Forum on China-Africa Cooperation (FOCAC).
On the demand side, circular economy-based
partnerships and breakthrough resource coalitions on secondary materials could reduce primary demand. China could work with the Clean
Energy Ministerial and Mission Innovation to
forge such partnerships.
8.3 Rationale for Action
By ensuring that the development and deployment of low-carbon technologies are not affected
by supply chain disruption and shortages of
critical inputs, both strategic cooperation pathways help facilitate improved urban air quality,
as well as supporting China’s progress up the
manufacturing value chain. Ultimately, if a large
part of China’s development strategy is concerned with positioning itself as an exporter of
batteries and EVs, its economic security will be
closely linked to the security of the necessary
raw materials.
Enhanced market cooperation and transparency could reduce international concerns over
China’s stockpiling of metals. At the production
level, adherence to high standards of transparency and environmental and societal risk
management can help reduce the risk of underperforming investments, particularly where the
societal licence to operate is compromised by
lack of investment in the host country, or labour
and environmental violations.
From the perspective of China’s partners,
China’s dominance in the production of rare
earth elements makes it a critical partner in any
efforts to reform the governance of metals and
minerals markets. For China and its partners,
fostering innovation and R&D into enhanced
recovery, recycling and substitution helps diversify supply and increase substitution. Developing
substitute technologies is aligned with China’s
domestic ambitions to enhance R&D capacity
and develop new business models.
8.4 Strategic Pathways
(1) Avoiding supply shortages and trade
disputes
Supply chain shortages and trade disputes
could be avoided by China working with
partners to develop: (i) improved information, data and price transparency across the
supply chain, while also: (ii) supporting
dialogues and developing win-win technology and investment packages with existing,
new and emerging producers to support trade
and prevent export controls. Resolution of
trade disputes that do arise would require
China to work with major economies to
reaffirm their commitment to WTO rules and
dispute resolution mechanisms, while working long term to address gaps in rules around
the trade of raw metals and minerals
(Fig. 45).
(2) Reducing the demand for increased
production
Minimising the need for additional extraction
capacity could be achieved by: (i) accelerated R&D, innovation and deployment of
enhanced recovery and recycling of metals
and minerals from in-use stocks, enabling the
greater use of secondary materials. This
could be led by a Clean Energy Ministerial
breakthrough resources coalition, including
industrial partners and national bodies. There
should be greater focus on future plans for
Special Report 5: International Energy Cooperation and Governance
653
to Achieve Cooperation
Enhancing the governance of metals and minerals supply chains will mean forging partnerships
with key players, some of whom are established
partners and others newer partners. On the supply
chain side, the China Chamber of Commerce of
Metals Minerals & Chemicals Importers &
Exporters could work with the European Commission and United States Geological Survey,
both of which already maintain data and information on reserves and production.
Dialogues between producers and consumers
will also be vital, China could encourage G20
states to engage constructively with regional
forums, such as the Community of Latin American and Caribbean States (CELAC) and the
Forum on China-Africa Cooperation (FOCAC).
On the demand side, circular economy-based
partnerships and breakthrough resource coalitions on secondary materials could reduce primary demand. China could work with the Clean
Energy Ministerial and Mission Innovation to
forge such partnerships.
8.3 Rationale for Action
By ensuring that the development and deployment of low-carbon technologies are not affected
by supply chain disruption and shortages of
critical inputs, both strategic cooperation pathways help facilitate improved urban air quality,
as well as supporting China’s progress up the
manufacturing value chain. Ultimately, if a large
part of China’s development strategy is concerned with positioning itself as an exporter of
batteries and EVs, its economic security will be
closely linked to the security of the necessary
raw materials.
Enhanced market cooperation and transparency could reduce international concerns over
China’s stockpiling of metals. At the production
level, adherence to high standards of transparency and environmental and societal risk
management can help reduce the risk of underperforming investments, particularly where the
societal licence to operate is compromised by
lack of investment in the host country, or labour
and environmental violations.
From the perspective of China’s partners,
China’s dominance in the production of rare
earth elements makes it a critical partner in any
efforts to reform the governance of metals and
minerals markets. For China and its partners,
fostering innovation and R&D into enhanced
recovery, recycling and substitution helps diversify supply and increase substitution. Developing
substitute technologies is aligned with China’s
domestic ambitions to enhance R&D capacity
and develop new business models.
8.4 Strategic Pathways
(1) Avoiding supply shortages and trade
disputes
Supply chain shortages and trade disputes
could be avoided by China working with
partners to develop: (i) improved information, data and price transparency across the
supply chain, while also: (ii) supporting
dialogues and developing win-win technology and investment packages with existing,
new and emerging producers to support trade
and prevent export controls. Resolution of
trade disputes that do arise would require
China to work with major economies to
reaffirm their commitment to WTO rules and
dispute resolution mechanisms, while working long term to address gaps in rules around
the trade of raw metals and minerals
(Fig. 45).
(2) Reducing the demand for increased
production
Minimising the need for additional extraction
capacity could be achieved by: (i) accelerated R&D, innovation and deployment of
enhanced recovery and recycling of metals
and minerals from in-use stocks, enabling the
greater use of secondary materials. This
could be led by a Clean Energy Ministerial
breakthrough resources coalition, including
industrial partners and national bodies. There
should be greater focus on future plans for
Special Report 5: International Energy Cooperation and Governance
653