Markets for raw materials have recovered from the 2008 financial crash, fuelled by the continued digital transformation of the economy and the rapid deployment of green technologies. Is the world on track for a repeat of the resource boom seen in the early 21st century?
The global fight for natural resources was nearing an all-time high when the European Commission first laid out an EU strategy for raw materials, back in 2008. “A strong and unforeseen surge in demand” driven essentially by double-digit growth in China, had led to a tripling of metal prices between 2002 and 2008, the Commission said at the time.
China, the world’s de facto sole supplier of rare earth metals, took advantage of its monopolistic position to impose restrictions on exports, prompting Japan to start stockpiling in fear of a supply crunch.
At the European level, those concerns resulted in the establishment of a “raw materials diplomacy” to secure supplies from abroad – including legal action at the WTO when necessary – a push for resource-efficiency inside Europe, and the creation of a list of critical raw materials to monitor potential supply risks.
Those fears were quickly swept away by the financial crisis, which depressed the global economy for many years. But ten years later, the fundamental economic trends that fuelled EU worries at the time are still there. If anything, those trends have intensified, driven by the continuous digitialisation of the economy and the transition to renewable energies.
For the rest of this article: https://www.euractiv.com/section/circular-economy/news/raw-materials-megatrends-point-to-looming-supply-risks-in-europe/