Global Outlook: is critical mineral diversification possible?

In EIU’s latest Global Outlook video, director of forecasting and economics, Tom Rafferty, and senior analyst, Cody Feldman, discuss global critical mineral diversification efforts, notably the role of China and areas of opportunity for other countries.

EIU expects demand for critical minerals will only grow in the coming years due to rising appetite from consumers and businesses. In particular, the rapid development of the electric vehicle (or EV) market, which we expect to more than double between 2022 and 2027, will further fuel demand.

“China holds a dominant position in global critical mineral production as the largest producer for 30 of the 50 critical minerals that the US government has designated as essential to the US economy. In July China used its dominance in critical mineral production to respond to US restrictions on the use of cloud computing services. The Chinese government imposed export restrictions on gallium and germanium, which are used in both the semiconductor and renewable energy industries. EIU expects these restrictions to backfire, motivating Western economies to reduce their reliance on China and resulting in a decline in China’s share of global critical mineral processing.“

Cody Feldman, senior analyst, global forecasting, EIU

Major economies are seeking to diversify away from China. Of particular note, Australia and Canada are two of the best placed countries to play a major role in the global supply of critical minerals. Critical mineral exploration spending rose 40% year on year for both countries in 2022, compared with 20% globally.

Emerging markets are also seeking to move up the value chain and diversify their exports of raw critical minerals away from China. Some have recently imposed bans on exports of unprocessed minerals to encourage higher value-added domestic processing. 

Overall, diversification will hinge on countries’ ability to leverage global markets and encourage foreign investment in mining and processing in the long term.  

The analysis and forecasts featured in this video can be found in EIU’s Country Analysis service. This integrated solution provides unmatched global insights covering the economic, political and policy outlook for nearly 200 countries, helping organisations identify prospective opportunities and potential risks.