SCOTT SIMON, HOST:
China extracts and refines many minerals that are needed for semiconductors in our computers and the batteries in our electric cars. Some companies are concerned about relying too much on one country and are looking for other options. But as NPR's Emily Feng reports, it's not easy.
CHERRY LIN: Thank you.
(SOUNDBITE OF METAL BANGING)
EMILY FENG, BYLINE: Cherry Lin, the diminutive co-founder of Taiwan Carbon Materials Corporation, likes to set things on fire.
LIN: (Non-English language spoken).
FENG: Wielding a blowtorch, she shows me how good graphite is at conducting energy. Various films coated in the mineral simply dissipate the flames, remaining cool to the touch. I'm getting into her show, so I point to a role of metallic vinyl.
LIN: (Non-English language spoken).
FENG: (Non-English language spoken).
Are we going to set this on fire, too, I asked Lin. Sadly, no, but it is part of a suite of graphic products her company makes. Graphite is super important. It goes into our electric cars, and it's crucial in artificial intelligence because of how good graphite is at dispersing the heat produced by powerful computers. While Lin's products are designed and made in Taiwan, all of the raw materials, the natural graphite that Lin's company needs, are mined in Northern China.
FENG: (Non-English language spoken).
FENG: She says she has looked at other countries. There are graphite mines in Sri Lanka, for example. But the purity and the price that China offers are just unbeatable. Mining in China was not a problem in the past. But starting last year, China put export controls on natural graphite for national security reasons, it says. It has also announced limits on three other critical minerals since.
LIN: (Non-English language spoken).
FENG: Lin says her company now needs to report about six months ahead of time to Chinese authorities whenever she wants to buy graphite. Lin's company has not been denied a purchase yet, but she's worried. Three-fourths of natural graphite is mined in China. Half of the world synthetic graphite is smelted there. The head-scratching part of all of this is graphite and other critical minerals are actually quite common...
LUKE PATEY: Like, the minerals are really just beneath our feet.
FENG: ...Says Luke Patey, a senior researcher at the Danish Institute for International Studies. However, China dominates the processing of these minerals.
PATEY: China has done a very fine job of really capturing the entire supply chain of some of these green technologies and digital technologies.
FENG: And we need a lot of graphite. Wood Mackenzie, the energy analytics company, estimates graphite demand will nearly double by 2030. The reliance on China has sent Taiwanese business executive William Huang (ph) on a hunt across Asia over the last year.
WILLIAM HUANG: I have some plans cooking in Vietnam.
FENG: He is desperately trying to find locations other than China to make his graphite. Theoretically, you could make graphite anywhere, but it is an energy-intensive process, and only one country fits Huang's two must-haves for cheap power and reliable power grids, and that is China.
HUANG: That makes China special. That's the one place they can build a decent power grid without too much consideration of the cost and everything.
FENG: It's not just graphite where China dominates. The U.S. Department of the Interior estimates 20 minerals the U.S. deems critical are sourced entirely from China. And China is now showing it can cut off that supply at any moment.
HUANG: It's like a time bomb. You don't know when it's going to go off.
FENG: And now, there's another country putting pressure on Huang - the U.S. The Inflation Reduction Act passed under the Biden administration will require electric vehicle batteries sold in the U.S. to have at least 70% of their critical minerals mined or refined domestically or in a country with which the U.S. has a free trade agreement. That does not include China. So Lin at the graphite company TCMC is actually planning to open a factory in upstate New York as a result, her first outside Asia.
LIN: (Non-English language spoken).
FENG: She says with the uncertainty of who will become the U.S.'s next president, she also fears the U.S. will pass even stricter trade policies and wants to produce in the U.S. before that happens. Right now, Lin says she feels the push to not be so reliant on China. The question for her is if the U.S. will be successful at pulling in more manufacturers like her.
Emily Feng, NPR News, Taoyuan, Taiwan.
(SOUNDBITE OF DOKOI'S "GLOW') Transcript provided by NPR, Copyright NPR.
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