As you have probably realized by now, all countries are seeking rare earths, critical materials, precious metals. Everyone wants the matrices of the future.
Normally, such strong demand would drive up the price of highly sought-after goods whose supply is so concentrated. Yet, the Global Critical Minerals Outlook clearly explains that the opposite has happened: “Significant supply increases, driven by China, Indonesia, and the Democratic Republic of Congo, have exerted downward pressure on prices, particularly for electric battery metals. The rapid increase in battery metal production has highlighted the sector’s ability to ramp up new supply faster than traditional metals like copper and zinc.
Since 2020, the growth in battery metal supply has been double the rate recorded at the end of the 2010s. Consequently, after sharp price increases in 2021 and 2022, the economic value of key energy minerals has continued to decline, returning to pre-pandemic levels.” A concentrated market, which offers large quantities of matrices, keeps prices low; in view of growing demand for these materials, this choice should be an advantage for buyers. But if low prices instead stem from trade policies aimed at creating dumping against more sustainable matrix production or to discourage investments in an attempt to replace them with cheap materials, it becomes a major problem.
First of all, because if the availability of rare earths, raw materials, and precious metals is not effectively absolute, sooner or later prices will rise again. And by now you will have understood that the actual availability of elements extracted from underground is by nature relative. To be clear, the matrices available on the planet will eventually run out. And we won’t have to wait centuries, given the extraction pace we have undertaken in the last hundred years. As Guillaume Pitron writes, “From the aftermath of the First World War to 2007, the annual production of the fourteen minerals essential to the global economy has already increased twentyfold. In an even shorter period, between 2002 and 2015, humanity even managed to extract from underground a third of all materials extracted since the beginning of the twentieth century!”
The extraction process of matrices will become increasingly costly, but this time not in terms of money. When we talk about mining, we must consider that as we progressively extract various matrices, we move to successive levels and must go deeper and deeper underground to extract new minerals. This process has an energy cost: currently, metal production mobilizes just under 10 percent of the world’s energy, which is certainly no small matter. But the more we extract, and the deeper we must go, the more additional energy we will need to obtain the same amount as today. Before completely exhausting the matrices underground, the economic feasibility of doing so will be exhausted due to the costly energy ticket required for the ever-deeper journey into the Earth’s depths.
The second factor that makes the concentration of the matrix market problematic is the fact that control remains in the hands of very few nations. These, for various reasons, can suddenly intervene on prices, generating strong repercussions. Given the strategic importance of matrices for the future, this grants these states extraordinarily high influence power.
