But it also depends on China and Russia, foreign media: This country has recently "turned to the United States" article | Mongolia | United States

On August 12th, an article titled "Mongolia's Rare Earth Diplomacy and Its Geopolitical Impact" was published on the website of American Diplomats. The author is Zhang Yue, Associate Professor at the Australia China Relations Institute at the University of Technology Sydney, Australia. The full text is excerpted as follows:

Mongolia, located between China and Russia and rich in mineral resources, especially copper and rare earth elements, has recently turned to its "third neighbor", the United States. During his recent visit to Washington, Mongolian Prime Minister Robzanamuslai Oyun'erden intends to strengthen cooperation with the United States in key mineral resources, especially rare earth mining. In addition, Mongolia and the United States have also reached an Open Skies Agreement aimed at strengthening direct trade.

China's Rare Earth Advantages

If this agreement is implemented, rare earths can be transported by air from Mongolia to the United States. What impact will this have on the strategic competition between China and the United States?

Since the end of the Cold War, China US relations have been the most important bilateral relationship in the world. Recently, competition between these two superpowers has surpassed cooperation, and Beijing and Washington are vying for advantages in trade, technology, and control over key mineral supply chains.

Firstly, the United States has exerted significant influence in technology and geopolitics by leveraging its dominant position in the semiconductor supply chain. In response, China has taken its own measures, including implementing controls on the export of key metals.

Among these measures and countermeasures, China holds an unpredictable trump card - control over the separation and purification of rare earths. At present, China is the only country that provides continuous and uninterrupted supply of permanent magnets, which are suitable for high-temperature applications such as electric vehicle engines.

On February 13th, workers were working in the production workshop of Baotou Jiangxin Micro Motor Technology Co., Ltd.

Rare earths play a crucial role in many modern technologies. The rapid growth of renewable energy and related technologies has led to a 37% increase in rare earth demand in 2022, and this trend is expected to continue for at least five years. However, the rare earth supply chain faces geopolitical fragility. It is worth noting that China is the country with the richest natural reserves of all 17 rare earth elements, and has the ability to extract and separate each rare earth element.

Since 2012, China has increased its efforts to climb up the value chain. China has concentrated the mining and processing of rare earths in state-owned enterprises and established key research centers.

In addition to rare earths, China is also a major supplier and the most cost-effective supplier of many key minerals required for the transition to clean energy. Considering the geopolitical and environmental risks associated with mineral extraction and processing, concerns about the security of rare earth supply are increasing. Western countries are seeking diversification of mineral sources and establishing facilities without China's involvement.

Rare earth diplomacy is difficult to succeed

Can Mongolia's rare earth diplomacy change the balance of power? The possible rare earth cooperation between the United States and Mongolia is expected to achieve mutual benefit. For the United States, this cooperation can diversify the sources of rare earths. Meanwhile, Mongolia will benefit from strengthening diplomatic ties and potential investments from the United States, which will help drive its economic growth. However, like any international relationship, details determine success or failure.

Potential cooperation faces several major obstacles. Firstly, the economic feasibility of extracting rare earths cannot be guaranteed, as the concentration of rare earth oxides ranges from 1% to 70%. There is still uncertainty regarding the quality of rare earth minerals in Mongolia and the investment required for mining and processing.

Secondly, Mongolia may face domestic opposition to the mining of rare earths, as mining brings extremely high environmental costs. From the perspective of the entire value chain, the mining process consumes a large amount of energy and water resources, while generating various wastes and pollutants, including toxic mineral residues, wastewater containing heavy metals, radioactive waste, carbon dioxide and sulfur dioxide, and other atmospheric pollutants.

Thirdly, Mongolia lacks critical infrastructure, including roads suitable for transporting heavy machinery and reliable electricity, which further exacerbates the challenges. Ironically, the best hope for Mongolia to solve this problem lies in China. The two countries have agreed to cooperate on various infrastructure projects, including cross-border railways, trade ports, roads, and highways.

Finally, Mongolia's inland geographical location makes it dependent on road transportation to reach the nearest Chinese ports for global trade. Although the Open Sky Agreement provides an alternative solution, the cost of transporting minerals by air easily offsets the economic benefits. In addition, the implementation of this agreement depends on the consent of China or Russia, as the aircraft must cross their airspace.

Therefore, although the strengthened connection between the United States and Mongolia may be unfavorable to China in terms of geopolitics, Mongolia's shift seems more symbolic rather than rooted in economic pragmatism.