Critical Minerals that are considered to be “Critical” are those that are necessary for both the growth of the economy and the protection of the nation.
Critical Minerals: It is possible that supply chain vulnerabilities and even disruptions of supplies will occur as a result of the lack of availability of these minerals or the concentration of extraction or processing in a small number of geographical sites. This became abundantly clear throughout the course of the Covid-19 Pandemic. Technologies that are reliant on minerals such as lithium, graphite, cobalt, titanium, and rare earth elements will serve as the pillars around which the global economies of the future will be built.
The development of numerous industries, such as high-tech electronics, telecommunications, transportation, and military, depends on the availability of certain minerals known as Critical Minerals. They are also essential for powering the global transition to an economy with lower carbon emissions and the renewable energy technologies that will be necessary to achieve the ‘Nett Zero’ commitments of an increasing number of countries all over the world. This is because the number of countries that have made such promises is expected to continue growing.
As a result, it is absolutely necessary for countries to locate and create value chains for the minerals that are essential not only to satisfy their own objectives, but also the objectives and initiatives of the international community as a whole.
The first step for governments may be to establish a department tasked with compiling a list of the critical minerals that are indispensable to their nation. The members of the departments then engage in a series of discussions including industry leaders, at the end of which they arrive at a decision regarding a list of essential minerals that are to be designated as Critical Minerals.
Studying the critical minerals strategies of a variety of other countries is typically the first step in the assessment process. This helps to identify the parameters for assessing the importance and provide a list of minerals that can be internally identified as critical minerals.
As a consequence of this, once a procedure such as this has been finished, a government may identify a number of aspects or minerals that are regarded as being essential. The economies of Australia, the United States of America, Canada, the United Kingdom, Europe, Japan, and South Korea are among the major global economies that could be analysed.
In the second phase of the evaluation, a departmental consultation can be held in order to determine which minerals are absolutely necessary for the industries in question in that particular nation. It is possible, as a result of this deliberation, to compile a list of the minerals that are absolutely necessary for the various industries operating in that nation.
For instance, the methodology used by the EU takes into account both the economic significance of an element and the supply risk associated with that variable. The methodology took into account important factors such the possibility for disruption, substitutability, cross-cutting usages in a variety of industries, dependency on imports, recycling rates, and other similar factors.
The formed ministerial committee will then be able to identify a set of critical minerals that would be needed by their nation for future use based on a staged assessment process, taking into account important parameters like resource/reserve position in a country, production, import dependency, use for future technology/clean energy, and the requirement of fertiliser minerals in an economy based on agriculture.
The following is an example of a list of Critical Minerals that governments may require.
- Cobalt
- Copper
- Germanium
- Graphite
- Indium
- Lithium
- Molybdenum
- Niobium
- Nickel
- Phosphorous
- Potash
- REE
- Silicon
- Tantalum
- Tin
- Titanium
- Tungsten
- Vanadium
- Zirconium
The majority of nations would also establish a department or committee that would be responsible for regularly revising the list of important minerals that have been identified and for informing the relevant departments and ministries about any changes that have been made to their critical mineral strategy.
What Are Critical Minerals and How Are They Used?
Modern technology is based on critical minerals. The globe is in need of critical minerals in order to construct a wide variety of products, including solar panels, semiconductors, wind turbines, sophisticated batteries for storage and transportation (Electric Vehicles) and more.
Basically, the supply chain resilience of critical minerals is becoming increasingly important to large economies because they are essential to the energy revolution.
The economic prosperity of many countries throughout the world will be contingent on how well they are able to utilise their large energy and mineral resources to play to their own unique strengths, as well as how successfully they are able to adapt to follow the move in the global market towards zero emissions.
In the recent decade, global economies have undergone a transformational process of New Age reforms. All of these different policies are working towards the same goal, which is to boost the overall productivity of the economy and unleash its latent capacity for expansion.
A significant number of countries’ ongoing reform efforts are supported by the application of technology, in particular digital technology. Technologies that rely on minerals such as lithium, graphite, cobalt, titanium, and rare earth elements will fuel the future global economy. These elements will also play a role in the economy.
These are necessary for the development of a wide variety of industries, including defence, transportation, telecommunications, and high-tech electronics, among others.
They are also essential for driving the worldwide shift to a low-emission economy and the renewable energy technologies needed to satisfy the ‘Nett Zero’ commitments of an ever-growing number of nations. The dynamic geopolitical environment creates a chance for nations to gain advantages from the diversification of global supply chains, which is currently taking place.
Global trade disputes, pandemic-induced supply chain disruptions, and the conflict in Europe have all put multinational corporations and governments in the spotlight in recent years. The dangers of relying on a single nation for production were felt by the companies.
As a consequence of this, especially in light of the unpredictability of global policy, multinational corporations are gradually investigating various techniques to diversify their production bases and supply networks.
According to a research by the United Nations Conference on Trade and Development (UNCTAD), “reshoring, diversification, and regionalization will drive the restructuring of global value chains in the coming years.” This trend will be crucial for many economies throughout the world.
Countries are establishing themselves as credible destinations for capital diversification as a result of the implementation of enabling and supportive policy frameworks.
The finding of mineral wealth and the determining of areas of its potential through the application of new technologies are both necessary steps in the construction of competitive value chains. Countries will be able to better plan for the acquisition and protection of such mineral assets with the help of the identification of key critical minerals, which will take into account the long-term needs of their country.
This will, in turn, lessen the dependency of countries on other countries to import many of the vital critical minerals they require.
