Petteri Halonen retweetledi
I dropped one of my most in-depth research piece but it got buried.
Because reading Chinese policy drafts is hard, and retweeting prices/sales/ production numbers are much easier.
Once again, here’s a sweet treat for you mintwit fam.
A draft law is moving through the Chinese legislative system to establish buffer mineral inventory reserves. This is the endgame, weaponing minerals in preparations for minerals trade war.
I keep saying it: China does things step by step. One at a time. Connect the dots and you get the full picture.
Last Tuesday, MIIT dropped a new rare earth administrative penalty draft. Financial punishments only, for now. But read between the lines. Operating licenses revoked. Credit scores affected. In China, one wrongdoing is inherited across generations. This is how Beijing makes people obey.
The very next day, the Ministry of Natural Resources held a conference on the 15th Five-Year Plan.
Here is the message the market missed:
Beijing will target "shortage" minerals: copper, iron, lithium, cobalt, nickel.
Then came the line that matters for your portfolio:
They explicitly vowed to consolidate China's dominance in rare earths, tungsten, tin, and others.
Secure what you lack. Tighten what you control.
This is the playbook Beijing is drafting up. The legislation is advancing on all fronts,creating as many levers as possible to let Beijing use.
What Beijing wants doesn’t always convert into what corporations want. They will always have a backup plan should geopolitical event comes to play. This is the most spoken topic while travelling in China for mining deals.
What follows next is likely an outbound mining M&A wave. Chinese capital will secure what they need abroad and allow more stable supplier, while they will take command from CCP to choke domestic supply of what they already dominate, should the day comes.
Let the game begins.
Ian Zhang@SinaMin_CN
English
