China frequently uses economic coercion for its geopolitical ends, the leverage effect that its market allows it turns into a form of “predatory liberalism” that weaponizes its networks of interdependence created by globalization. The solutions adopted by the West, based on “de-risking”, such as decoupling, supply chain resilience, reshoring or diversification to minimize vulnerability are almost always applied in a fragmented and non-unitary way.
Critical metals will define global technological superiority in the decades to come and Beijing's pervasiveness in this sector seems limitless, particularly for those metals, often unknown to most, which play a fundamental role in strategic sectors. One of these metals is so critical, and so rare, that it is even difficult to define its price. This is cesium: essential for many applications and also for the development of 5G networks, a fundamental global competition of this century.
It's the “cesium standard” which allows us to measure time precisely making it key to mobile networks, the Internet and GPS. The cesium clock, aka the atomic clock, is an essential component of the web, cellular devices and satellites of the Global Positioning System. Provides the standard unit of measurement of time: some cesium clocks have an accuracy of one second every 14 million years. But cesium is also a fundamental metal in oncological therapies and cesium formate is widely used as a fluid drilling and lubricant in the oil sector.
Despite its strategic importance, only three mines in the world produce it on an industrial scale: Tanco in Canada, Bitika in Zimbabwe and Sinclair in Australia. Tanco and Bitika are currently not in production, in the case of Tanco due to stability issues related to geology, while Australia's first commercial cesium mine, Sinclair, extracted its last cesium in 2019. Who actually controls primary production of cesium is the Chinese Sinomine Resource Group Co. Ltd.
Sinomine currently extracts small quantities of cesium from the Tanco underground mine and also has a few years of potential supply using stockpiles and tailings. It also processes it on-site and sells the metal to mostly North American end users, which gives it complete control over the supply chain. He proposed to the Canadian authorities a project to develop the mine, taking it from current underground mining to open pit with a partial drainage of Lake Bernic overlooking the mine. The project would allow it to extract ore currently trapped in the mine's underground pillars.
But Ottawa is currently pondering the consequences of allowing much of its critical mining industry to be sold to Chinese buyers over the past decade. Two of the largest Canadian and global mining companies, Teck Resources Ltd. and Ivanhoe Mines Ltd., both have state-controlled Chinese companies as major shareholders because of this approach.”globalized”. In the case of Teck, having ceded control of the company to the Chinese Communist Party, in the guise of China Investment Corp., meant that Canada was unable to prevent a $22.5 billion hostile takeover by of the Swiss mining and raw materials giant Glencore.
From Dragon's perspective, the Canadian Critical Minerals Strategy, introduced by the federal government late last year to protect natural resources from foreign ownership and secure its critical minerals supply chains, places significant limits on its strategy to control global production of critical metals in particular. As in the case of cesium, which would allow it to deprive the American industry of a rare metal and would also prevent its use in the defense sector.
Power Metals Corp., a little-known Canadian mining company, controls ownership of the site in Case Lake, Ontario, where it has discovered a reserve containing a higher-grade cesium ore: this company operates on what is expected to become the fourth mine industrial of this type on the entire planet and most likely also the first producer. It is no coincidence that Beijing was trying to buy it. But in October, the Canadian government introduced a ban on new investments by state-controlled foreign companies in Canada's critical minerals sector by requiring the Chinese to divest from three mining companies, including Power Metals, and cancel the offtake agreement that would have granted him the right to Case Lake's production.
While the Canadian government does not have the authority to retroactively force Sinomine to divest from Tanco, it can block the mine's expansion, which cannot proceed without Ottawa's approval because draining a lake for mineral extraction requires permits. federal. The ore is too important strategically to grant greater control to the Dragon and therefore the strategy should be to “keep it in the ground“.
Although Sinomine tries to reassure Canadians that it is not the enemy, but above all that it is not controlled by the China Nonferrous Metal Mining Group, a state-owned mining giant, the recent provisions on national security adopted by the Chinese Government (The Thucydides Trap and the Wolf Warriors – Panorama) would probably allow him to put pressure on the executives of the mining company to “induce them” to follow Beijing's directives. “Collective resilience,” in this case between Canada and the US, a peer-to-peer competition strategy designed to discourage Xi Jinping's regime from economic predation, appears to have achieved its goals.
