Use + Remix

The new oil

‘New oil’ to play critical role in a greener future

Managing expectations around the supply of critical minerals will be key to avoiding conflict and moving the world towards decarbonisation.

Critical minerals are only found in a few countries making their supply a lightning rod for geopolitical tussles. : Illustration by Michael Joiner, 360info, images via jsjgeology on Flickr CC BY 4.0 Critical minerals are only found in a few countries making their supply a lightning rod for geopolitical tussles. : Illustration by Michael Joiner, 360info, images via jsjgeology on Flickr CC BY 4.0

Managing expectations around the supply of critical minerals will be key to avoiding conflict and moving the world towards decarbonisation.

Critical minerals are essential components in modern technology and clean energy systems. As such, their demand and supply significantly influences the global economy and geopolitical landscape.

The World Economic Forum dubs them the ‘new oil‘ as they may cause economic, political and environmental concerns which could escalate into major incidents.

These minerals — which include cobalt, lithium, nickel and rare earth elements such as neodymium, scandium and yttrium — are vital in the manufacture of a broad array of products, from smartphones and electric vehicles to wind turbines and military equipment.

Their importance is increasing amid the global shift towards cleaner energy solutions to achieve the Earth’s climate goals and keep global warming below 1.5 degrees Celsius.

Rare earth elements are relatively plentiful in many countries. Unfortunately, they are rarely found in sufficient concentrations that make them economically viable to extract and process.

China dominates global production of rare earth elements with more than 80 percent of the world’s supply — a near monopoly.

The Democratic Republic of the Congo produces around 70 percent of the world’s cobalt while Australia is a major producer of lithium. Indonesia is by far the largest nickel producer.

This concentration of critical minerals and elements in specific countries poses risks of supply chain disruptions.

Critical minerals and rare earths are supplied by only a few countries around the world.

The geopolitical dynamics around these minerals were further stirred when China announced a ban on rare earth extraction and separation technologies last year.

This prompted the United States to look at ways to reduce dependency on foreign sources of critical minerals to maintain its lead in high technology fields.

The extraction and processing of critical minerals present considerable environmental and social challenges together with sustainable sourcing and supply chain transparency.

Demand for critical minerals is projected to surge, driven primarily by the clean energy sector. However, this growing demand also underscores the need for sustainable and resilient supply chains.

360info has consulted the experts to explore the challenges and opportunities offered by these critical minerals and how individual countries are dealing with them.

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