The Scramble for Critical Raw Materials: Time to Take Stock?

For over a decade the scramble for so-called Critical Raw Materials has been a flashpoint between nations. Accusations and fears that governments weaponise trade in these industrial materials abound. Given the central role they play in the digital and energy transitions, policies to secure and produce these materials have the potential to upset trade relations for decades to come. Faced with this unwelcome prospect, Johannes Fritz and Simon Evenett devoted the 31st Global Trade Alert report to sort out the fact from fiction in this complex, long-term policy challenge.

As the Executive Summary makes clear, many of the narratives deployed by governments simply don’t stand up to scrutiny—which surprised us. Just two of many examples: The poster child for weaponising Rare Earths trade can’t be found in the finest-grained UN trade data. Nor is the track record of the leading emerging market industrial policy “success” (Indonesia’s nickel ore export ban) quite what it seems. We present evidence on what governments steps are actually taking towards Critical Raw Materials and assess them. We don’t counsel despair. Instead, we lay out five steps that would “thicken” markets over time for the small number of industrial materials where major excess demand gaps are likely to emerge in the decades ahead.