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By now it has been well established – and we have covered this fact on numerous occasions — that the global push towards net zero carbon will require massive amounts of metals and minerals underpinning renewable energy technology supporting the shift.

Here, the mainstream media largely focuses on covering material needs to achieve climate goals –which often means that the emphasis is on battery critical materials Lithium, Cobalt, Graphite and Manganese – and Nickel, as it ascends to the U.S. Government Critical Minerals List –  as well as on the Rare Earths.

Via a new infographic by Visual Capitalist comes a reminder that it’s not just these materials we need to focus on, and that, while it is of course a major factor, other drivers beyond the renewable energy transition are sending demand scenarios for metals and minerals to unprecedented heights.  As Visual Capitalist’s latest posits, “the expansion of megacities will boost metal markets.” 

Writes Nicholas LePan for Visual Capitalist:

“As developing economies grow, millions of people are moving to cities to pursue opportunities compounded by proximity and availability to resources. Many of these people see their economic circumstances improve, and consumption increases as a result.

Cars get more numerous, electricity and public transport networks expand, and consumers buy more electronic products for their homes. All of this means more steel, more copper, more aluminum, and more cement are needed.”

Using data from Swann Group’s Swann Index, Visual Capitalist shows Nickel demand estimated to rise from 2.4 million tonnes in 2019 to 5.2 million tonnes, in 2035, which would amount to an increase by 116%.

For Aluminum, Swann sees demand increased by 57%, from 66 million tonnes to 103.6 million tonnes in 2035.

Owing largely to the expansion of decarbonization technology, as well as the transition to electrification and automation, analysts see demand for Copper increasing by 26%, from 23.6 million tonnes in 2019 to 29.7 million tonnes by 2035.

As LePan writes, while for now Asian and primarily Chinese megacities are leading demand, projection of future population growth indicate a shift  towards the African continent, which according to some estimates, is home to 17 of the 20 fastest growing cities from 2020 to 2025.

All of which is to say that as stakeholders move to devise resource policy, it is more important than ever to keep an eye on the big picture.

We are facing a world with increasingly complex and daunting geopolitical tensions which in turn impact mineral resource supply scenarios (see our recent coverage on the geopolitics of resource supply here).

For the United States to remain competitive, U.S. critical mineral resource policy must be measured against two overarching imperatives:  It must be comprehensive, ensuring that all metals and minerals underpinning 21^st century technology are appropriately accounted for – and it needs to focus on the entire value chain, from mine to manufacturing.  We can, and should, harness partnerships with allies, expand recycling capabilities and work on “closed-loop solutions,”–  but we will not be able to meet vastly increasing mineral needs without leveraging and expanding domestic production and processing capabilities.

Against the backdrop of the global push to net carbon zero, supply chains for the critical metals and minerals underpinning this shift are facing immense pressures. As followers of ARPN well know, China, which not only holds the pole position when it comes to sourcing critical minerals, but has also cornered the downstream supply chain, is the elephant in the room here – but there are other significant geopolitical challenges stakeholders have to reckon with.

Often overlooked in the policy discourse, yet no-less crucial in the global race for critical mineral resources, is the Southern Hemisphere. Resource-rich Latin and South America have long been key players in this sector, but, with Latin America emerging as a major source of renewable energy metals and minerals, the region’s importance is growing in the context of the green energy transition.

Renowned author and energy expert Daniel Yergin agrees, stating that Latin America is “a major, major source of lithium, a major source of copper. Those are two of the critical elements in the energy transition.”

Yergin points to a rising challenge that is set to have major geopolitical implications that should get U.S. policy stakeholders thinking, and ultimately acting:

“But you also have across Latin America a wave of populism… Resource nationalism is not just about oil and gas, it’s also about minerals, definitely, with the batteries and everything else.”

Indeed, as Peter Schechter and Juan Cortiñas outline in a recent piece for Marsh McLennan’s Brink News,

“[t] he political tide in Latin America has turned decisively toward leaders who openly shun laissez-faire economics. A new generation of presidents and legislative leaders is advocating for greater government control of national economies, and with this trend, the specter of resource nationalism has once again gained a foothold in the region.” 

Argentina, Bolivia, and Chile, which form the so-called Lithium Triangle — home to more than half of the world’s known lithium reserves according to experts — are central in this new development, but other countries in the region, like Mexico, are also in the critical minerals business.  In each case, the trend toward resource nationalism is unmistakable.

President Andrés Manuel López Obrador has called for reserving future lithium extraction for the state, stating that the Mexican government “will deny any request for a concession to exploit lithium, and we have the power to do that.” 

In Chile, home to the world’s largest reserves of lithium and copper, recently elected center-left president Gabriel Boric has also proposed to nationalize mineral operations and end private concessions, with government documents arguing that “the strategic resources such as copper and lithium should serve the interest of all Chileans and therefore be incorporated into the ‘full and exclusive domain of the state.’”  

Argentina’s government is developing a new strategic roadmap for mining. With lithium mining at its heart, policy changes could include “analyzing investment incentives for lithium mining, including a possible exemption for profit repatriation … and a system of ‘progressive’ export taxes to charge lower rates at the start of a new project.” 

In Peru, another key traditional mining jurisdiction, President Pedro Castillo ran on a platform calling for increased mining royalties during his 2021 campaign, and has taken “a hands-off approach to the increasing social conflicts in the country’s mining regions” since assuming office.

According to media reports, against the backdrop of a global lithium market expected to grow by 500% in the next 35 years, developers in Argentina, Bolivia, Chile and possibly Peru are even evaluating the possibility of creating an OPEC-like cartel.

And while Schechter and Juan Cortiñas contend that it is “important not to confuse this resource nationalism with predictions of a highly ideological leftward turn,” this does not change the underlying implications for U.S. critical mineral resource supply chains as U.S. demand for lithium and other green energy critical materials continues to grow.

With its 100 Day Supply Chain Report and subsequent policy statements, the Biden Administration committed to an “all-of-the-above” approach to mineral resource policy.  However, since then, the overall approach to date has appeared more geared towards “rely[ing] on ally countries to supply the bulk of the metals needed to build electric vehicles and focus[ing] on processing them domestically into battery parts, [as] part of a strategy designed to placate environmentalists.”

As we previously pointed out, the “friend-shoring” concept may be an important pillar of the “all-of-the-above” approach, and highly appealing especially to those policy makers with “not in my backyard (NIMBY)” constituencies.

However, it will not be sufficient to meet our vast material needs, particularly as NIMBY-ism is going global.

It’s time we come to terms with the fact that as much as we want to rely on our friends and allies, this can only be part of our critical mineral resource strategy.  To succeed and remain competitive in the 21^st Century, we will also have to harness our arguably vast domestic resource potential across the entire value chain — from mine to manufacturing.

We’ve named it the year of the Supply Chain, noting that others said “2021 is the year ‘supply chain’ went from jargon to meme.” While an increased focus on the supply chain was undoubtedly a critical development in the mineral resource realm, and several steps to increase supply chain security for critical minerals were taken in [...]

With the addition of 15 metals and minerals bringing the total number up to 50, this year’s draft updated Critical Minerals List, for which USGS just solicited public comment, is significantly longer than its predecessor. This, as USGS notes, is largely the result of “splitting the rare earth elements and platinum group elements into individual entries [...]

On November 9, 2021, the U.S. Geological Survey announced it is seeking public comment, on a draft revised list of critical minerals.  The revised list is the latest development in a broader move towards a more comprehensive mineral resource policy on the part of the U.S. Government — a long-overdue shift that began to gain steam in [...]

As lawmakers on Capitol Hill are scrambling to finalize major federal spending legislation set to include several key provisions relating to natural resources, a recent Wall Street Journal piece on wind power underscores the urgency of our nation’s looming raw material shortfalls. Against the backdrop of surging demand in the context of the green energy transition, wind [...]

Amidst the global push towards carbon neutrality, “Critical Minerals” has become a buzzword.  As the green energy transition has gone mainstream and electric vehicles and renewable energy sources dominate the news cycle, so has talk about growing demand for some of the specialized materials underpinning this shift — most notably the Rare Earths, and the battery [...]

Friends of ARPN will know that “much of our work is grounded in a conviction that the Technology Age is driven by a revolution in materials science – a rapidly accelerating effort that is unlocking the potential of scores of metals and minerals long known but seldom utilized in our tools and technologies.” In this [...]

As we outlined in our last post, the Biden Administration’s strategy to secure critical mineral supply chains, as outlined in its just-released 100 Day Supply Chain Report, embraces an “all of the above approach.” While strengthening sustainable mining and processing domestically, the Administration will also rely on partnerships with our closest allies — and of [...]

The Biden Administration made clear early on that it is committed to pursuing a low-carbon energy future, and battery technology is a key driver underpinning the shift away from fossil fuels. Just a few weeks ago, when touting his infrastructure package at Ford’s electric vehicle plant in Dearborn, President Joe Biden declared: “The future of [...]