Lead-In to Critical Raw Materials

🌱 What are critical raw materials?

It is difficult to define critical raw materials, as “[t]here is no universally accepted definition or list”. What is classified as a critical raw material “varies according to the needs and priorities of policymakers and industries”. Minerals are, however, typically “considered critical when they are essential to economic and technological development but face potential supply risks due to e.g. scarcity, supply concentration, and/or geopolitical factors”. That said, what is considered to be a critical raw material commonly changes over time. This is “influenced by [ongoing] technological advancements, market demands, geopolitical developments, and political priorities”.[i] Developing alternatives to critical raw materials is generally regarded as challenging – and, in some cases, even as impossible. In line with this, finding alternatives is usually connected with “significant time, investment, and technological advancements”.[ii]

🌱 What is classified as a critical raw material in the EU?

The European Commission regularly creates, reviews, and updates its list of critical raw materials. The list is based on the European Commission’s assessment of what “raw materials [are] of high importance to the EU economy and [have a] high risk associated with their supply”.[iii] The EU’s fifth list of critical raw materials from 2023 lists the following materials as critical: antimony, arsenic, baryte, bauxite, beryllium, bismuth, boron/borate, cobalt, coking coal, copper, feldspar, fluorspar, gallium, germanium, hafnium, heavy rare earth elements, helium, light rare earth elements, lithium, magnesium, manganese, natural graphite, nickel, niobium, phosphate rock, phosphorus, platinum group metals, scandium, silicon metal, strontium, tantalum, titanium metal, tungsten, and vanadium.[iv]

🌱 What are critical raw materials needed for?

Having a “[r]eliable and unhindered access to certain raw materials is a growing concern within the EU and across the globe.”[v] According to the International Energy Agency, critical raw materials “are essential components of many of today’s rapidly growing energy technologies – from wind turbines and electricity networks to electric vehicles”. Cobalt, graphite, lithium, nickel, and manganese are – for example – essential to batteries’ performance.[vi] Therefore, as the energy transition progresses, the demand for critical raw materials also continues to grow.[vii]

🌱 Which countries have critical raw materials?

The supply and production of critical raw materials is “concentrated in just a few geographical regions”. This makes the supply chains of critical raw materials “potentially vulnerable to geopolitical and economic risks” and “increase[s] the risk of supply disruptions”. An example of this type of risk includes export restrictions.[viii] Notably, China currently controls roughly “70% of global lithium refining capacity”.[ix] Moreover, while there are significant rare earth resources in several other countries, China currently leads in their production.[x] Similarly, the majority of the global cobalt supplies come from the Democratic Republic of the Congo.[xi] More data on the geographical distribution of given critical raw materials can be found here.

Explore our module on critical raw materials here.