Allianz Trade's Critical Raw Materials report highlights the intricate interplay between political dynamics and the push for renewable energy through the lens of vital minerals and metals. As materials like lithium, cobalt, and nickel become crucial for the transition to a fossil fuel-free economy, the renewable energy market's value has surged to $320 billion in 2022, doubling in size over the past five years, with similar growth projected for the next 17 years.
The report underscores the geopolitical significance of these materials, revealing China's overwhelming control over resources like magnesium and silicone metal, with the Democratic Republic of Congo, South Africa, and Russia dominating cobalt, platinum, and palladium production, respectively. The paper emphasizes the vulnerability of net import nations to the actions of mineral-rich countries, exemplified by China's embargo on critical raw materials to Japan in 2010. Focusing on the EU, which introduced the Critical Raw Materials Act (CRM) to ensure access and affordability, the report identifies gaps in policy understanding. It stresses that despite increased mining and refining efforts within the EU, the majority of activities will still occur outside its borders, leading to dependence on foreign sources. For several specialty metals, such as baryte and lithium, the EU relies heavily on other regions. The report proposes several recommendations, including supporting trade policies, developing an outward-looking CRM Act, leveraging foreign investments, and strengthening domestic production and recycling capacities.
The UK has also recognized the importance of critical minerals, publishing its first Critical Minerals Strategy in 2022. The British Geological Survey identified regions suitable for critical raw mineral industries, a part of the UK's overall strategy to ensure a resilient supply chain. The report lists areas like Lock Maree in Scotland, parts of Northern Ireland, and various regions across England and Wales. The Task & Finish Group on Critical Minerals Resilience for UK Industry is conducting an assessment to determine the country's current and future critical mineral needs, highlighting the crucial role of these materials in the transition to renewable energy. In summary, the Allianz Trade report sheds light on the geopolitical complexities surrounding critical minerals and their pivotal role in the renewable energy sector. The study underscores the dominance of certain nations over these resources and the need for comprehensive policies to ensure a stable and sustainable supply chain for essential raw materials.
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Technology is a useful servant, but a dangerous master, it was rightly said. Electronic devices have grown into an inevitable part of our daily lives.
