Building Supply Chain Resiliency of Critical Minerals – by Brendan Marshall (Canadian Global Affairs Institute – November 2021)

Increasing geopolitical uncertainty has magnified the precariousness of existing sources of critical minerals. These minerals are vital in aerospace, defence, health care, telecommunications, computing and in clean technologies such as solar panels, nuclear energy and electric vehicle (EV) batteries and motors.

Governments globally have started assessing the vulnerability of their economies to supply shocks for critical minerals that they cannot sufficiently source (or at all) inside their own borders, but on which the proper functioning of their economies (and sovereign responsibilities) depends.

China’s publicly stated intention that Taiwan “must and will be” reunited with China increases the potential for both regional and global instability. From a supply chain perspective, the potential destabilization of Taiwan, host to 55 per cent of global chip manufacturing capacity, would further deepen the West’s reliance on China for key inputs essential for manufacturing advanced technologies.

According to the recently released G7 Panel on Economic Resilience report, China alone accounts for 80 per cent of the U.S.’s rare earth elements (REE) imports and 98 per cent of the EU’s. Without these imports, wind energy, EV motors, enhanced defence systems and a host of other technologies would be impossible to manufacture. Reinforcing this acute vulnerability is the ongoing global chip and semiconductor shortage, and the demand implications for autos and other advanced manufacturing technologies this presents.

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