Strategic Intelligence: Critical Minerals

Strategic Intelligence: Critical Minerals

Summary

Over 70 countries have set net-zero targets, and even more have pledged to lower their emissions. This requires shifting from fossil fuels to renewable technologies like solar photovoltaic (PV) cells and wind turbines and adopting energy transition technologies like hydrogen, energy storage, and carbon capture. However, scaling clean energy technologies relies on mining critical minerals.

Key Highlights

• The global transition to clean energy faces significant challenges due to critical supply-side risks in the mining sector. Four key risks stand out: mineral depletion, resource monopolization, geopolitics, and water stress. The near-term depletion of critical minerals raises concerns, especially as instability in the green technologies market causes price volatility. Lower-grade ores complicate extraction, making it less efficient, particularly in the copper industry. Recycling is expected to play a key role in diversifying supply chains.
• Many critical minerals are concentrated in specific regions, creating uneven resource distribution and volatile market dynamics. For example, much of the world’s lithium reserves are concentrated in South America and Australia, while the Democratic Republic of the Congo (DRC) provides much of the world’s cobalt, and Indonesia dominates nickel production. Geographic monopolies worsen supply risks and are further exacerbated by geopolitical tensions, ESG disclosure rules, and environmental factors like water scarcity. The race to control these critical minerals has intensified rivalries between China, the US, and the EU, with China currently dominating the mineral supply chain and energy transition technologies. Starting in 2019, these tensions have led to the introduction of sanctions by Western nations to level the playing field, which has disrupted global supply chains, leading to market volatility. In response, China banned rare earth elements (REEs) in 2023, escalating the situation further.

Scope

• This report provides an overview of the critical minerals theme.
• It identifies the main trends surrounding critical minerals and the energy transition, split into three categories: technology trends, macroeconomic trends, and regulatory trends.
• It looks at demand-side drivers for critical minerals, including electric vehicles, solar energy, wind energy, nuclear power, and hydrogen, and supply-side risks for critical minerals, including mineral depletion, resource monopolization, geopolitics, and water stress.
• The report includes analysis of critical mineral strategies by region, covering China, the US, the EU, South America, and Canada.
• It also incorporates analysis of various signals, including mergers and acquisitions and company filings, and profiles of key players in critical minerals mining.

Reasons to Buy

• Energy transition objectives are key for curbing the harmful effects of fossil fuels on climate change. However, the rapid scale-up of clean energy technologies required to reduce carbon emissions depends upon the intensive mining of several minerals.
• Due to the projected increase in demand for these minerals, they are classified as critical for achieving energy transition goals.
• This report provides a clear and concise introduction to the key issues surrounding critical minerals, with a specific focus on their role in energy transition.