How China’s export controls, 90% ownership of metal refining threatens the AI industry: Blockspace Pod

Core Insights - The AI and energy industries are facing a significant logistics threat due to China's dominance in manufacturing and refining, with implications for global supply chains [1][2] Group 1: China's Dominance in Refining - China controls 80% to 90% of the global refining capacity for critical minerals essential for AI and energy technologies, creating a geopolitical chokehold on supply [4][5] - The focus on financial efficiency in the West has allowed China to build a robust midstream refining capacity, leading to a situation where essential materials must be processed in China before reaching Western manufacturers [3][4] Group 2: Export Controls and Supply Chain Vulnerabilities - China has implemented a dual licensing system for refined metals, restricting access to select companies, which poses a risk to Western industries reliant on these materials [5] - Recent export controls by China on minerals like gallium, germanium, and antimony could severely impact the ability of Western industries to source materials necessary for high-performance computing and energy systems [5] Group 3: Silver Market Vulnerabilities - Silver production is heavily dependent on refining processes conducted in China, with a significant portion of silver being a byproduct of copper, lead, and zinc refining [6] - The market is currently facing a 25,000-tonne deficit of silver, exacerbated by the demand from the AI boom and solar panel manufacturing, which could lead to skyrocketing prices and hinder the deployment of new technologies if disruptions occur in the Chinese refining process [7]