Critical minerals are integral to energy transition technologies, from wind turbines and solar PV plants to battery storage and electric vehicles. This publication explores the full value chain from mine to battery plant, looking at the issues for investors in and financiers of critical mineral projects, including trade and regulatory issues impacting the sector.
Key takeaways:
- Concentration and political sensitivity: Extraction and processing of critical battery minerals (lithium, nickel, cobalt) are dominated by a few countries, especially China. This has led the US, EU, and UK to seek supply chain diversification and reduce reliance on single sources.
- Rapidly evolving regulations: The US, EU, and China are reshaping regulations for critical minerals. The US favours protectionist measures and China is tightening export controls and licensing requirements. The EU mandates thorough due diligence and ESG compliance across the battery supply chain, with new laws and funding to promote sustainable mining, processing, and recycling, and to accelerate permitting for strategic projects.
- Investment challenges: Mining projects face political risk, infrastructure demands, long timelines, and shifting regulations. New financial products and government guarantees are emerging to support investment and secure long-term supply.
