Critical minerals, essential in modern technology and clean energy systems, significantly influence the global economy and geopolitical landscape. The World Economic Forum has termed them the “new oil,” highlighting their potential to spark economic, political, and environmental concerns that could escalate into major incidents.
These minerals, including cobalt, lithium, nickel, and rare earth elements such as neodymium, scandium, and yttrium, are vital for manufacturing a wide range of products, from smartphones and electric vehicles to wind turbines and military equipment. Their importance is growing as the world shifts towards cleaner energy solutions to meet climate goals and keep global warming below 1.5 degrees Celsius.
Although rare earth elements are relatively abundant in many countries, they are seldom found in concentrations that make extraction and processing economically viable. The supply of critical minerals and rare earths is limited to a few countries worldwide, complicating the geopolitical dynamics surrounding them. China’s ban on rare earth extraction and separation technologies last year has stirred the geopolitical landscape, prompting the United States to seek ways to reduce its dependency on foreign sources of these minerals to maintain its technological lead.
Extracting and processing critical minerals present significant environmental and social challenges, including sustainable sourcing and supply chain transparency. The demand for critical minerals is projected to surge, driven primarily by the clean energy sector, underscoring the need for sustainable and resilient supply chains.
Managing expectations around the supply of these essential minerals will be crucial to avoiding conflict and ensuring a smooth transition towards global decarbonisation.
Pensana plc (LON:PRE) explores and mines neodymium, praseodymium, and rare earth minerals. The Company’s flagship assets are the Saltend rare earth refinery project in the United Kingdom and Longonjo neodymium and praseodymium (NdPr) Project in Angola.
