Communia

The green transition is already paving the way for new wars. Current mineral production plus that in the pipeline is incapable of supplying the raw material demand of the energy transition. According to the International Energy Agency, by 2030 the production capacity calculated by then will only be able to supply 80% of the critical minerals and 50% of the copper demanded by the Green Deal. By 2040, the strain will be even worse: the demand for critical minerals will have quadrupled. What will large national capitals do along the way to secure the sources needed to supply their most valuable industries?

A raging competition for raw materials...

Map of new lithium battery gigafactories announced before January 1 in Europe. After that date, two more were announced in Spain alone. The typical investment in one of these facilities, critical to the automotive sector's green transition, is €5 billion.

The industrial conversion involved in the green transition implies, according to the same report, the massive deployment of a wide range of clean energy technologies, many of which in turn depend on critical minerals such as copper, lithium, nickel, cobalt and rare earths. That is, the implementation of the technologies needed for the green transition requires critical metals and metalloids and much larger quantities of conventional metals such as copper. Some minerals such as lithium have been moved into the critical category in 2020 by the EU in the face of expected supply problems.

For electric vehicle batteries and energy storage, by 2030 the EU would need up to 18 times more lithium and 5 times more cobalt, and by 2050 almost 60 times more lithium and 15 times more cobalt compared to the current supply for the Union economy as a whole. Failure to respond to this increased demand could lead to supply problems. ‎...‎ The demand for rare earths used in permanent magnets, for example for electric vehicles, digital technologies or wind generators, could increase tenfold by 2050.

Communication from the European Commission to the Parliament

...which puts Chile, Argentina and Bolivia at the center of imperialist tensions

Lithium decanting pools in the Atacama Desert, Chile. Chile is today the main supplier of the lithium needed for the automotive green transition.

The electric car is the centerpiece of the automotive industry's green transition. But without lithium there are no batteries to power it. That's why the German industry has been taking positions in Bolivia over the past few years. The German automotive industry hopes to secure at least 400,000 batteries a year straight away. Its goal is strategic: securing mineral reserves. And its effect on the South American map is immediate: Bolivia is reorienting its diplomacy to secure a waterway to the Atlantic.

But Germany has not been the only one to take a stand in the wake of the green transition. China, which was among the first powers to bet on Argentine supply, was producing almost eight times as much lithium as the United States in 2019. The appetite of the Chinese electromotive industry is already one of the main factors heightening tensions between Buenos Aires and Washington

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And this is just the beginning. Between Chile, Argentina and Australia, they produce 80% of the lithium that goes to the world market. The Chinese investments that are beginning to arrive in Santiago in packages of billions channel the expectations of the Asian demand on a region which China finds even less conflictive than Australia. As a result they pushed Chilean capital into investing in Bolivia and Piñera to seek an entente with Argentina.

But the confluence of interests between Bolivia, Argentina and Chile appears to have been a temporary mirage. Biden's Green New Deal has multiplied what the press calls South America's geopolitical importance and pushed U.S. companies to invest heavily in lithium mining projects in Chile and Argentina.

After all, copper prices have doubled in the last year on account, above all, of the demand for the new wind installations needed for the green transition, so everyone expects a similar evolution for lithium. The U.S. industry knows it is lagging behind, and although it is accelerating the search for deposits in its own territory, it must compete in order to secure supplies. The conflict with China over gaining scarce sources of raw materials is served.

Among other things because China, which had focused its lithium investments in Australia, has been in an escalation of tension with its supplier for several years now. Consequently, Chinese mining equity funds are trying to leave and move into the main alternative source, Chile, where they are already the main foreign investors...and not just in lithium mining.

The different levels of imperialist competition

The British military conducts surface-to-air and surface-to-sea missile exercises in the Falklands last week. The threat of war and trade promises are not polar opposites nor are they independent of the green transition.

Competition for raw materials is just the reflection of the main drivers of imperialist competition accelerated by the green transition. The Green Deal ensures, through legal imposition, a solvent demand for automakers and electric companies, which thanks to it become profitable applications for new masses of capital. That is the main objective of the green deal, rather than to reduce CO2 emissions. And it implies a massive transfer of rents from labor to capital, which is the crux of all this.

But, with all the major powers simultaneously making the leap, the ecological transition immediately takes the form of an accelerated competition among themselves for capital in search of a destination. A destination that will be all the more attractive the more competitive -lower costs per unit of product- and scalable it is, i.e. the more possibilities it has of absorbing new capital.

That is, in order to materialize profitability investments must ensure both access to external buyers and the essential supplies that sustain production. The first requirement pushes that contradictory Euro-US alliance for free trade that locks China out of its own markets. The second is a race to secure a supply - if possible at pre-fixed prices - that is already known to be insufficient.

Competition for markets, capital and raw materials are thus intertwined, turning each rival contract into an existential threat and each own investment into a lever to force governments and secure markets. And in this spiral, the prospect of industrial shortages necessarily becomes a fear of being expelled from the market. Any mechanism, such as the one designed by the green deal for the ecological transition, that generates shortages in the raw materials essential to the leading industries of national capital also pushes the way towards war.