China Controlling Essential Resources America Requires for Its Defense, Report Shows

Concerns Over China’s Control of Battery Materials

A recent report highlights the potential risks posed by China’s dominance in the global battery materials market, which could have severe impacts on the U.S. defense industry.

The Chinese Communist Party oversees over 80% of the global supply of lithium-ion batteries and an extensive share of the components necessary for their production, according to the Foundation for Defense of Democracies (FDD). Advanced batteries are integral to many high-tech American weapons systems, like drones and missile guidance systems, and experts are concerned about China’s capability to manipulate supply chains.

“As drones, robots, and unmanned weapons platforms become more pivotal, enhanced batteries translate to stronger combat capabilities,” notes the FDD report. “The ongoing conflict between Russia and Ukraine illustrates how drone warfare is reshaping the battlefield. An estimated 50,000 battery-powered attack drones are deployed each month. Thus, developing a reliable, American-made advanced battery is a key national security concern, especially since numerous small U.S. drones depend on components sourced from China.

Furthermore, China dominates the market for key battery components, controlling 97% of the cathode share and heavily influencing the graphite and cobalt markets, which are crucial for both chip production and batteries.

The report points out that while most nations abide by certain rules that encourage fair competition, China exploits various non-market tactics to gain control over supply chains, manufacture dependencies, weaken foreign competitors, and consolidate economic power.

Additionally, the Chinese government proactively shields its domestic companies from global market pressures, offering subsidies and tax incentives to support producers from 2009 to 2023.

Currently, the United States imports about 75% of its lithium-ion batteries from China alone. Reports suggest that nearly 90% of the global drone market is also in China’s hands. This situation raises alarms given the rising importance of drones in contemporary warfare.

The implications of this dependency were not lost on former President Donald Trump’s administration, which recognized the necessity of reducing reliance on China for batteries and sought alternative sources for rare earth elements, including lithium.

“Without access to essential raw materials and components, our adversaries could potentially defeat us simply by withholding these vital inputs,” the FDD report emphasized.

The report concluded that investing in domestic mineral extraction and processing is crucial for countering China’s influence over the battery market. Additionally, countries like Argentina and Chile may become significant partners in supplying vital minerals as the U.S. diversifies away from China.