December 1, 2021
Recently, the Politburo meeting of the Central Committee proposed to ensure the safety of energy and minerals during the review of the national security strategy. This is the first time such a high-level meeting put mineral security and energy security together, which means that mineral security has risen to a national strategy.
The reason behind this change is the massive demand for strategic minerals triggered by the global transition to clean energy. Clean energy requires the use of many key mineral resources, such as lithium, nickel, cobalt, and manganese for electric vehicle batteries, rare earths for wind power turbines, and copper for power transmission. In the future, the supply of these minerals may not be able to keep up with the rapidly increasing demand for clean energy, which should be paid attention to.
According to a report released by the International Energy Agency in May this year, in order to achieve the goal of the Paris Climate Agreement’s global warming within 2 degrees Celsius, the global demand for clean energy minerals will at least double by 2040, and the demand for electric vehicles related minerals will increase by 30 times, of which lithium will increase by 42 Times, graphite has increased by 25 times, cobalt has increased by 21 times, and nickel has increased by 19 times.
In fact, the tight supply of key mineral resources has already begun. Recently, the price of lithium broke the 200,000 yuan per ton mark for the first time, setting a record high. At the beginning of the year, many electric vehicle companies also said that insufficient battery supply may affect production progress. Although the emergence of "battery shortage" is due to insufficient production capacity, in recent years, global companies have generally focused on battery R&D and production capacity construction. With the gradual release of production capacity, they should be wary of battery shortages due to shortage of raw materials in the future.
The important reason is that the supply of these strategic minerals is inelastic. First, the concentration of these minerals is higher than that of traditional minerals. According to the “Global Reserves of Lithium, Cobalt, Nickel, Tin, and Potash Mineral Resources Assessment Report” released by the China Geological Survey for the first time, the top three countries with global reserves of lithium are Chile, Australia and Argentina, accounting for 68% of global reserves. The top three countries with reserves are Congo (DRC), Indonesia, and Australia, which account for about 70% of global reserves. The high geographic concentration of these minerals increases supply risks. It can be referred to that oil accounts for the largest share in the current global energy structure, but the top three countries in global oil production, the United States, Saudi Arabia, and Russia, account for 43% of global production, and the concentration is far lower than that of key minerals. Second, the investment output cycle of the resource industry is relatively long. Generally speaking, it takes about 5 years for a mine to go into commercial production.
|Contact Person :||Lisa|
|Tel :||0086 17611625682|