Executive Summary: Who, What, and Why of National Critical Minerals Strategies
Cultivating Domestic Mining Industries or Stabilizing Metal Supply Chains?
Welcome back to this iteration of Non Ferrous Flows!
Last time we talked about Indonesia and its new rules regarding mineral processing, which you can find here. This week we are going to be doing something a little different. Rather than a deep dive into a single national industry, we are going to look at the broader international trend of “critical mineral strategies,” and its effect on the Asia Pacific. In the last several years, governments around the world have put out a whole new rash of critical mineral strategies, laws, and plans. We are going to examine some themes and main takeaways.
What defines a critical mineral? How do these plans differ country by country? How does the critical mineral label change how businesses can operate, and are those standardized across countries? What are the advantages of being classified in a critical minerals group? Or put another way, if copper is suddenly a critical mineral, what can the copper producer do now?
This article is curious about public policy because it affects business and how supply chains are changing, rather than the other way around. A broad understanding of contemporary geopolitical tensions is a prerequisite to understanding transformations and risks in those supply chains. We are excited about this week’s article, and we hope you enjoy it as well.
Finally several housekeeping notes. Non Ferrous Flows is aiming to publish a deep dive biweekly (as in every other week.) Secondly, the substack email readers receive will be an executive summary, with the full article posted on the website, linked here. This should avoid inundating readers with 4000-word inbox tomes. As always, any other suggestions or feedback are warmly welcomed.
Who, What, and Why of National Critical Minerals Strategies: Executive Summary
Let’s set the stakes with an excerpt from the Canadian Strategy:
Critical minerals are the building blocks for the green and digital economy. There is no energy transition without critical minerals: no batteries, no electric cars, no wind turbines and no solar panels. The sun provides raw energy, but electricity flows through copper. Wind turbines need manganese, platinum and rare earth magnets. Nuclear power requires uranium. Electric vehicles require batteries made with lithium, cobalt and nickel and magnets. Indium and tellurium are integral to solar panel manufacturing…Simply put, there is no energy transition without critical minerals, which is why their supply chain resilience has become an increasing priority for advanced economies.”
What is a critical mineral? The term critical minerals itself is flexible and is used inconsistently within the public policy realm, but most have the following qualities: centralized in one country, no sufficient substitute, high levels of volatility, or projected supply shortfall.
Analysis of Plans
- These plans are mostly being produced by G7 and likeminded countries (e.g., Australia, Japan, South Korea, UK, EU, Canada etc.,) but few in the global south
- Mining-heavy countries, like Canada and Australia, have critical mineral strategies which predominantly outline national goals for building their domestic industry (maximizing economic opportunities, jobs, and environmental safety)
- Alternatively, places like the EU and Japan are concerned about minimizing potential supply chain disruptions and diversifying their suppliers, and are therefore more international in focus
- China doesn’t have a singular critical minerals strategy, but uses other systems, like Five-Year plans, for their planning processes
Recommendations
- A consistent set of classifications for critical minerals will ease the complexity of doing business throughout different international jurisdictions. Uranium is a critical mineral in Canada, where exploration would be given a hefty tax credit, while in Australia it isn’t considered anything of the sort. Legislators should work for classification consistency between cooperating international markets
- It would behoove South-East Asian governments, particularly the Indonesian and Vietnamese governments, to produce a concrete critical minerals strategy. As these countries move to higher-tech manufacturing, more diverse metals are going to be needed, and having a clear structure of metal supply can increase business confidence
Thanks for reading! If you’re interested to learn more, the full article is up on the website (link below).
*Sidenote: coverage of US critical mineral strategy is limited in this issue because a deeper look at US policy, the inflation reduction act, and its new financial incentives is scheduled for next month