Significant amounts of feedstock metals will be required to build the infrastructure for the green energy transition. It is currently estimated, however, that the world may be facing an "infrastructure gap" that could prevent us from meeting United Nations Sustainable Development Goal targets. Prior investigations have focused on the extractive aspects of the mining industry to meet these targets and on looming bottlenecks and regional challenges in these upstream market segments. Scant attention has been paid to the downstream processing segments of the raw materials value chain, which also has a high degree of market concentration. Growing international tensions and geopolitical events have resulted in a shift toward "reshoring" and "near-shoring" of mining processing capabilities as regional powers attempt to make metal supply chains more secure. While increasing resilience, these shifts can also dilute the overall effectiveness of the global mining supply network and subsequently hamper the world's ability to close the green energy infrastructure gap. We argue that broadening the remit of the International Renewable Energy Agency (IRENA) to include coordinating these mission-critical metal processing functions can mitigate these issues. The G20 is one potential forum for enabling an integrated mineral processing agreement under the auspices of IRENA.
This paper examines economic statecraft in the case of rare-earth elements, of which China controls over 90% of the world's current supply, and famously cut off exports to Japan during a territorial dispute in 2010. The rare-earth sanctions provide an opportunity to investigate claims of economic statecraft, power and interdependence, and the political implications of near-monopoly control of a resource critical for high-tech military, consumer, medical, and environmental industries. A vector error correction model statistically disentangles the effects of China's economic statecraft from their rare-earth quota and pricing policies. Prior to the sanctions, there was little international supply diversification. China's purported use of rare-earth elements was an economically costly diplomatic signal that demonstrated their potential leverage, but also had unintended consequences, as Japan moved to diversify rare-earth supplies and in doing so deepened diplomatic ties with China's neighbors. Economic statecraft served to heighten regional tensions and undermine the China's own end goals.
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