Paper 2 Proposal

Research Question

As a research analyst at a research or rating agency, I will be analyzing the evolution of critical minerals within the context of achieving net zero emissions by 2050 and examining their influence on global economic development. This analysis aims to provide both institutional investors and interested individuals with meaningful insights into the industry to support their investment decisions concerning critical minerals. Specifically, the focus will be on China’s dominance in the critical mineral industry and the impact of its policies on supply chain resilience.

Executive Summary

• Overview of the critical mineral industry and market shares

  

  Market size for energy transition minerals (IEA)

• China’s dominance and reliance in the global critical mineral industry

  China’s dominance and reliance in the global critical mineral industry are significant for us to examine the future scenario pivoting towards Net Zero 2050. China holds a dominating position in supplying critical minerals due to its reserves and production capacity, impacting various industries such as EV, cleantech, and renewable energy. However, China also depends on other countries for its critical minerals. For example, it relies heavily on the Democratic Republic of the Congo for mined cobalt. Therefore, it is important for investors to incorporate these dynamics into their investment decisions.

  

Analysis

• Demand: Background about current critical mineral demand and both by technology and by mineral

  We have observed an increasing demand for critical minerals in recent years, driven by the rising adoption of technologies such as low-emissions power generation, electric vehicles, grid battery storage, and hydrogen technologies. The reliance on critical minerals, such as lithium, cobalt, and rare earth elements, is expected to further increase in the longer term, aligning with the goals of achieving Net Zero by 2050.

• Supply: Discuss the supply side issues coming from extraction and procession

  On the supply side, critical minerals face challenges in extraction and processing. Issues such as intensifying geopolitical tensions in mineral-rich regions, and environmental concerns arising from the mining practices might deepen the supply chain vulnerabilities. In addition, the concentration of production in a few key regions can also amplify the risk of supply shock in critical minerals.

  

• Price stability: Discuss the price elasticity of critical minerals

  

Conclusion

• To summarize the above findings of the research and their implications for the investors and other stakeholders involved in the critical mineral supply chain.

• To summarize and provide predication about the resilience of critical mineral supply chains in the context of achieving net zero emissions by 2050.