One area within trade which has been the topic of much discussion is the supply of critical minerals and their importance to businesses in both Ireland and Northern Ireland.
In this article we consider what are critical minerals and why they are important for businesses and their supply chains.
What are critical minerals?
Simply put, critical minerals can be defined as those minerals which are essential to ensure sustainable low carbon production, but which are often subject to supply chain vulnerability.
Technology is evolving fast and as it does so does our reliance on certain cohorts of minerals.
For example, a recent GOV.UK publication stated, "We are moving to a world powered by critical minerals: we need lithium, cobalt and graphite to make batteries for electric cars; silicon and tin for our electronics; rare earth elements for electric cars and wind turbines. Indeed, it is estimated that by 2040 the world will need four times as many critical minerals as it does today."
And a recent EU publication stated, "To meet its climate and digital objectives, sourcing, processing, and recycling critical raw materials in Europe and securing supply chains are the challenges ahead.
"Lithium, cobalt and nickel are used to produce batteries; gallium is used in solar panels; raw boron is used in wind technologies; titanium and tungsten are used in the space and defence sectors."
This article will detail some of the steps taken by the EU and the UK government to help combat this. It will also consider what steps businesses can take to help ensure that they have an adequate supply of all critical minerals to fulfil demand for their products.
What are some examples of critical minerals?
The International Energy Agency lists 50 minerals as critical based on their importance to global supply chains. These include:
A full list of critical minerals can be found on the website of the International Energy Agency: Final List of Critical Minerals 2022. In addition, both the UK and the EU have lists of critical minerals. More details of these can be found in the links below.
Why are critical minerals important?
There are two main reasons why critical minerals are important.
- Increased demand for sustainability: In recent years demand for low carbon products and technology has increased rapidly. Many low carbon products are reliant on critical minerals to safeguard production. Both the UK and the EU governments have made clear plans to target Net Zero, and therefore this demand for critical minerals is likely to increase further, including for both businesses based in Ireland and Northern Ireland.
- Increased digitalisation: In addition to increased demand for more sustainable environmental solutions in recent years the growth in digitalisation has exacerbated the demand for critical minerals, with much of the infrastructure required to support digitalisation reliant on a range of critical minerals.
What steps are being taken to safeguard supply of critical minerals?
To help secure the provision of critical minerals the EU has recently launched the Critical Raw Materials Act. This act is designed to reduce existing dependencies on non-EU member states for the provision of these minerals and help increase sustainability and resilience within supply chains. More details around this act can be found on the European Commission website: European Critical Raw Materials Act.
This PDF factsheet by the European Commission gives a helpful overview of the European Critical Raw Materials Act.
Like the EU, the UK government has also recently launched a critical minerals strategy designed to enhance domestic capabilities regarding critical minerals, and increase international co-operation. More details around this strategy can be found in this GOV.UK Policy Paper: Resilience for the Future: The UK’s Critical Minerals Strategy.
My business is based in Ireland / Northern Ireland and relies on critical minerals. What actions should I consider taking?
Whilst the supply of critical minerals is a challenge that impacts businesses worldwide there are some steps which businesses based in either Ireland or Northern Ireland can consider taking to help ensure continuity of supply.
- Adopt a circularity mindset: With many constraints on the supply of critical minerals businesses should adopt a circularity mindset where focus is placed on keeping existing supplies of minerals in use for longer. Businesses should consider either reusing, repairing, remanufacturing, and recycling. By focusing on extending the use of existing critical minerals not only will businesses benefit the environment, but they will also reduce the risk of supply chain disruption. This may also result in cost savings as less new raw materials are needed.
- Build effective supplier relationships: When faced with a shortage of key minerals it is imperative that businesses work on developing effective relationships with key suppliers to help minimise the risk of potential supply chain disruptions. More advice on how to build effective relationships with suppliers can be found on the Cross-Border Trade Hub: Article: Supply chain and supplier relationships.
My business uses critical minerals. Where can I find assistance?
If you are based in either Ireland or Northern Ireland and you need help understanding your supply chain and trade routes used, or perhaps you would like assistance with adopting a circular mindset please use our chatbot, where, subject to eligibility, you may be able to receive specialist consultancy advice from an approved InterTradeIreland service provider.
Simply click the chat icon at the bottom right to get started.
Article Reviewed: October 2023