Frankfurt, Germany (AP) – The world’s critical mineral resources are increasingly concentrated in a limited number of countries, especially China, which poses a risk of supply disruptions that could affect industries and lead to higher prices for consumers.
The International Energy Agency (IEA) report, based in Paris, examined the availability of low-volume minerals and metals, playing a significant role in the transition of the economy from fossil fuels to electricity and renewable energy sources.
For key materials such as copper, lithium, cobalt, graphite, and rare earth elements, the market share held by the top three producers is projected to increase from 82% in 2020 to 86% in 2024.
China stands out as the leading refiner of 19 out of the 20 strategic minerals covered in the report, maintaining an average share of about 75%. Meanwhile, Indonesia has made significant strides in nickel production, a vital component in steel manufacturing and electric vehicle batteries.
The IEA warns that current trends of export limitations and trade disputes raise serious concerns.
“The supply chain for critical minerals is highly susceptible to supply shocks, whether from extreme weather, technological failures, or trade disruptions,” stated Datih Birol, executive director of the IEA. “Such shocks can lead to widespread consequences, driving up consumer prices and diminishing industry competitiveness.”
Following Russia’s gas supply cut due to the invasion of Ukraine, Billol noted the ongoing European energy crisis. He referenced the global shortage of silicon-based computer chips during and after the pandemic, which severely impacted car production.
“The fundamental principle of energy security is diversification,” Billol emphasized in an interview with The Associated Press. “This principle extends beyond energy security to economic security as well.”
While market forces play a vital role, they are insufficient alone for the development of new sources. “We require well-structured government policies,” he added, highlighting the need for funding and other supportive measures.
China is a significant global supplier of critical minerals essential for various products, including computer chips, robots, electric vehicles, batteries, drones, and military equipment. It also dominates the refining and processing of many crucial minerals like lithium, cobalt, and graphite.
China has imposed export restrictions on many of these vital products, while trade negotiations under President Donald Trump escalated tensions, hindering U.S. industries and limiting swift alternative sourcing, which has reinforced foreign dominance. U.S. manufacturers face challenges in competing due to their lack of access to China’s critical reserves, heightening global supply tensions.
Trump aimed to decrease reliance on foreign critical minerals as part of his national security and economic resilience strategy, a core focus during his initial 100 days in office. agenda.
This approach extends beyond China. The Trump administration has confirmed a precarious deal with Ukraine, granting America access to extensive mineral resources earlier this month.
Trump also pursued initiatives to expedite deep-sea mining in international waters, drawing significant frustration from environmental groups. He aimed to bolster the domestic copper industry, culminating in a February Presidential Order that urged federal authorities to accelerate the permitting process for new mines. Furthermore, he reviewed mineral proposals from the Congo, a nation rife with conflict yet abundant in mineral riches, and sought to solidify Greenland’s mineral ties with the U.S.
According to the IEA report, the global market is currently well-supplied with generally declining prices. However, it warned that projected copper production, critical for electrical wiring and the power grid, will fall short of demand, leading to an anticipated 30% deficit by 2030.
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St. John contributed from Detroit, Michigan.
Source: apnews.com