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The future supply of several metals and minerals that are critical for the success of the energy transition is uncertain, threatening that success, GlobalData has said in a new report.
According to that report, the transition depends on the sustainable supply of these metals and minerals, including lithium, copper, cobalt, nickel, and rare earths.
However, most of these are not distributed evenly across the globe. Some of them are concentrated in challenging jurisdictions, such as the Democratic Republic of the Congo. Finally, China controls most of the supply chains for these minerals.
China’s dominance over critical mineral supply chains is fast becoming a major source of worry for Europe and the United States as they rush to speed up the energy transition.
The two, along with friendly nations such as Canada and Australia, which also happen to be rich in minerals, have attempted to forge new supply chains for these critical minerals but starting from scratch means these chains would take years and even decades to build.
In the meantime, analysts continue to forecast a surge in the demand for these metals and minerals due to the expected equal surge in demand for EVs, solar and wind power installations.
“The successful adoption of green energy technologies is inextricably linked to the availability and accessibility of these essential minerals,” says Isabel Al-Dhahir, author of the GlobalData report.
“Without an adequate supply of critical minerals, the ambitious energy transition goals could face substantial delays,” she also said.
These warnings add to earlier ones made by mining and commodity trading majors about the prospect of shortages in some key transition metals such as copper. Trafigura, for instance, warned that copper supply on a global level is in decline and a looming shortage would jeopardize the transition push.
Lithium supply is also problematic because of its geographical concentration and the fact that China dominates lithium processing, just as it does rare earths processing.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.