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17/04/2024
Mining News

The Scramble for Critical Minerals Heats Up

Both Europe and the US want to loosen China’s grip over minerals needed to build electric cars and other climate-friendly high-tech tools. But rather than cooperate, they risk competing.

The European Union has unveiled a new critical minerals strategy, and the US has published several strategies and executive orders on securing critical minerals. When European Commission President Ursula von der Leyen recently met US President Joseph Biden at the White House, she urged transatlantic cooperation. Expect a bumpy road.

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Demand for critical minerals is soaring. There won’t be sufficient supply for stakeholders wishing to carry out net zero policies. While the EU and US should be applauded for starting to cooperate, the two will end up fighting over limited supplies.

Chemical elements such as lithium and cobalt and rare earth metals such as lanthanum, didymium, erbium, and terbium are critical components for batteries, turbines, and countless other parts across the green economy’s emerging value chain. They are as central to the current energy transition as oil and gas were to the previous industrial revolution.

China now dominates. Consider lithium, key to producing batteries for electric cars. At present, Europe produces no battery-grade lithium, with 44% of the world’s supply and 60% of lithium processing coming from China. Prices are already soaring, reaching $62,000 per ton, more than five times the average cost of production. Although projects to extract lithium in Europe are moving forward, they will be slow to go online and insufficient to make the continent self-sufficient.

China is already winning the race to exploit Africa’s lithium reserves. A lithium war looks set to erupt between Western allies in South America, each hoping to get the most from the region’s Lithium Triangle. Chile, Argentina, and Bolivia host more than 75% of the world’s supply beneath their salt flats.

 

Source: CEPA

 

 

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