The scramble to stockpile critical minerals could drive up energy transition costs
Why this matters: environmental and climate reporting with long-term consequences.
As competition for minerals needed to produce clean energy technologies intensifies, a growing number of countries have resorted to an age-old mechanism to cope with the threat of scarcity: stockpiling. The world’s biggest economies are racing to shore up reserves of cobalt, lithium, graphite and rare earths, which are needed to produce batteries, electric vehicles, wind turbines and electric systems to wean the global economy off fossil fuels. The same minerals are also increasingly sought after to manufacture military hardware and chips for AI, adding further pressure on supplies. But the cutthroat scramble to build up reserves threatens to drive up the costs of the energy transition by intensifying competition and pushing up prices of key materials needed to produce clean energy technologies, research published today has found. “If you undermine the financial viability of [clean energy] projects through higher raw material costs, you’re going to delay their roll-out,” co-author Hugh Miller, the critical minerals lead at the Centre for Economic Transition Expertise at the London School of Economics and Political Science, told Climate Home News. Stockpiling “is happening, whether we like it or not”, said Miller. “But if we’re going to do it, we need to have it in a coordinated manner that means we don’t have massive market volatility and adverse implications from every country trying to go at it alone,” he added. The rise of stockpiles A growing number of governments have adopted national stockpiling programmes in response to heightened geopolitical tensions around mineral supply chains. Earlier this year, US President Donald Trump announced the establishment of a critical mineral reserve known as “Project Vault” to protect American businesses from shortages after China imposed export restrictions on rare earth supplies. US Secretary of State Marco Rubio delivers opening remarks at the Critical Minerals Ministerial in Washington DC (Credit: Official Sta