World can’t let critical minerals go the oil way

Energy transition must be fair, equitable and just, leaving nobody behind. The governance of critical minerals must evolve in response to this context

- Arunabha Ghosh

Major economies are scrambling to develop their own responses to restrictions of rare earths and critical minerals through domestic policies and international deals.

Near-term reactions will eventually need to give way to long-term strategic action. In the clean energy transition, critical minerals cannot go the oil and gas way.

Most recently, Beijing has announced tighter restrictions on exports of rare earths. The applications of copper, lithium, nickel, cobalt, and rare earth elements in solar panels, wind turbines, electric vehicles, standalone batteries, and semiconductors are well known. Less understood is how countries and companies define their criticality. For some, it depends on the strategic importance to key industries and availability in the face of supply risks.

Others fear that criticality stems from the risk of weaponisation. The threats are compounded by a rising concentration in the production and processing of minerals. For others still, especially those with vast reserves, minerals promise economic development. For companies facing huge capital expenses to prospect and develop mines, minerals come with a premium on policy clarity, price consistency and opportunities for collaboration and risk-sharing. In short, a critical mineral means different things to different constituencies. What is common, as the Quad Foreign Ministers' meeting in Japan recognised, is the transformative role these minerals play in critical and emerging technologies.

Energy transition must be fair, equitable and just, leaving nobody behind. The governance of critical minerals must evolve in response to this context. As the US and China come to head over these key minerals, the world cannot make the same mistake with critical minerals as it did with oil and gas. It needs a global framework to address sourcing and policy coordination.