Critical mineral supply is a risk for the green transition

Critical minerals are metal and non-metal compounds essential to modern technologies and whose supply chain is at risk of being disrupted. Many of these minerals are components of batteries, solar PVs, wind turbines, electric vehicles, and other clean technology. As the transition to green energy progresses and countries start to decarbonise different facets of the economy (transport, industry), access to critical minerals has become an issue of national security. China’s outsized role along the supply chain has also been a cause of concern.

What you will learn:

• Remarkably, supply scarcity is currently more a geopolitical outcome rather than a geological one as reserves have generally remained constant or increased due to exploration. Supply-side shortages are more likely to be the result of political, environmental, and social factors that make extraction contentious.
• The supply chain is vulnerable to significant disruption because the mining and processing of many minerals and metals are limited to just a few countries. Any disruptions could drive up the cost of low-carbon technology, and input prices have already started to climb in some countries. Diversification is difficult given the long investment horizon between discovery and production, as well as for developing processing capacity.
• Recycling must be economically viable to reduce risks by encouraging circularity along the critical mineral supply chain. Countries must enhance recycling capacity, physical recovery, and stockpiles. Countries should also invest in processing to allow for downstream diversification, and support research and innovation for more efficient use of scarce minerals or allow for substitutes.