Demand for critical minerals drives massive changes in global economy

Competition is intensifying to strengthen global supply chains for metals and minerals essential to the ongoing energy transition.

Companies are jockeying for position in changing production networks, and Congress is pushing policies to move mineral processing away from China, where the industry has been concentrated for decades.

In the search for mineral resources, everything from international environmental bans on scraping the ocean floor to barbaric labor norms in developing countries are at issue, with mining operations in developing countries long criticized by human rights groups. It has been criticized.

At the center of several disputes are critical minerals such as cobalt, lithium and copper that can be used to make batteries, magnets, electronics and energy technology components to replace the fossil fuels that have caused global warming and climate change. demand for metals is rapidly increasing. .

Demand for lithium, nickel, cobalt and copper will continue to outpace production through 2050, according to a recent report. United Nations Conference on Trade and Development.

Topping the list is lithium, with expected demand in 2045 more than three times the expected supply in the same year, around 1,400 tonnes. Demand for copper in new energy systems is expected to jump from 23% of total demand for all uses of copper to more than 42% by 2050.

“To meet growing demand, countries should take particularly important steps to explore new resources rich in high-grade ores and attract investment into the sector,” UN economists said in a March report. There is a need to do so.”

Although reserves of raw materials used in fossil fuel production, such as natural gas and crude oil, are distributed to a greater or lesser extent around the world, critical minerals tend to be concentrated in different countries and regions and are tied to specific supply chains and It puts pressure on trade relations.

According to the US Geological Survey (USGS), more than half of the lithium, a key component in batteries, is found in just three South American countries: Bolivia, Argentina and Chile. Indonesia and Australia hold 42 percent of the world’s nickel, and Congo has about half of the world’s cobalt.

Even more concentrated than the raw materials themselves is refining and mineral refining capacity, which occurs almost exclusively in China.

“That’s the part of the supply chain that China absolutely dominates. They dominate it with cobalt, they dominate it with graphite, they dominate it with aluminum, copper, lithium,” Colombia said. Tom Mollenhout, a university energy policy researcher, told The Hill.

“There is a risk of concentration at the extraction stage, but the risk is even higher at the processing stage because a country has so much processing capacity,” he said.

Lawmakers are frustrated with the state of global mineral production and want the U.S. to get a better grip on the makeup of its supply chains.

One Bipartisan proposal introduced Early this year, the Department of the Interior will be required to regularly report to Congress on where critical minerals and rare earth elements come from and what political and market factors are affecting producers. become.

“The United States urgently needs to diversify its supply chains and strengthen relationships with our allies,” the bill’s sponsor, Sen. Todd Young (R-Ind.), said in a statement.

“Our bill would respond to China’s actions by developing a national strategy to better track the world’s mineral reserves and advance mining technology and international cooperation.”

Deep-sea mining is another area where political pressure is concentrated over mineral demand.

Commercial seabed mining currently does not occur on an industrial scale and is still a hypothetical venture surrounded by various questions about its environmental impact and economic viability.

However, metal nodules in remote areas of the ocean floor, such as the Clipperton area in the Pacific Ocean, are a topic that governments and international organizations are actively debating and considering as a matter of feasibility as they pursue policies related to the energy transition. are doing.

“There’s a lot of political pressure to change this,” Molenhout said.

The United States is not currently participating in these negotiations because it is not a signatory to the 1982 Convention on the Law of the Sea, which established the Jamaica-based International Seabed Authority (ISA) as the governing body for marine mineral rights.

However, efforts are underway to bring the United States on board. a bipartisan resolution to In addition to ratifying the treaty, former intelligence and defense secretaries sent a letter to the chairman of the Senate Foreign Relations Committee in March urging ratification.

“We have already lost two of the four ‘American’ designated deep-sea mines, each containing $1 trillion worth of strategic minerals such as copper, nickel, cobalt, manganese and rare earths. “These minerals are critical to America’s security advantage, as well as the transition to a greener 21st century,” said former Directors of National Intelligence James Clapper and John Negroponte. wrote along with dozens of other former officials.

Environmental groups are adamantly opposed to seabed mining, warning of the unknown damage it could cause to the ocean.

“Deep-sea mining is a highly destructive new extractive industry that is eager to open up in the global oceans,” Greenpeace said in an opinion piece, calling the practice “unavoidable for us.” “There is a risk of serious and irreversible environmental damage that cannot be avoided.” sea ​​and marine life.

Some companies will become completely reliant on critical and rare earth minerals as the US redesigns its mineral supply chain and “friendshors” parts of its production pipeline for military-sensitive industries such as semiconductors I’m trying to avoid that conflict.

Born out of research funded by the University of Minnesota’s Department of Energy, permanent magnet manufacturer Niron Magnetics’ technology began exploring ways to make magnets from widely available iron and nitrogen materials in 2013.

“We spent the next eight years or so perfecting the science, and the last two years actually engineering, scaling and commercializing the technology,” Niron CEO Jonathan Rountree told The told Hill. “We expect to make our first commercial sale later this year and have received significant interest from our customer base.”

As economic demand gradually increases, the labor and humanitarian impacts of competition for critical minerals in developing countries are becoming increasingly urgent.

A damning 2023 expose by Siddharth Kalla, an associate professor at the University of Nottingham, focuses on cobalt mining in the Congo and draws parallels. Colonial barbarism was committed It took place in the region during the reign of King Leopold II of Belgium, beginning in the late 19th century.

“The harsh reality of cobalt mining in Congo is an inconvenience for all stakeholders in the chain. “No company wants to admit that it contains cobalt that they mined,” Kara wrote.