- Raw materials such as rare earth elements, cobalt and lithium are becoming increasingly important for the world economy
- China dominates the production and supply chains of most of these materials
- Beijing could use this advantage as a tool to pressure the West
Traditional analyses of energy security have almost exclusively focused on the potential for oil and gas supply disruptions from politically unstable or unreliable producer countries. However, digitization, the rise of renewables and other “green” technologies, the electrification of the energy sector, robotics and artificial intelligence could create a huge increase in global demand for critical raw materials (CRMs) – including rare earths, lithium and cobalt.
This shift will create new challenges, as the world turns to unfamiliar supply chains and sources. Currently, China has an unprecedented capability to harness this potential since it controls most of the world’s CRMs. Geopolitical risks to energy supplies will not fade with decarbonization and the end of the fossil fuel age.