WEF – Energy Transition and Geopolitics, 2024

The energy transition from fossil fuels to critical minerals like lithium and copper will lead to new dependencies and potential geopolitical challenges. Despite concerns about shortages and concentration of supply in certain countries, most critical minerals can be managed with proper policy interventions. Unlike oil, the demand for critical minerals is more flexible and responsive to market conditions, reducing the likelihood of supply manipulation. The report recommends implementing proactive policies to ensure a smooth transition and avoid negative economic and environmental impacts. Innovation, such as finding alternatives to critical minerals like cobalt, can help mitigate risks. Creating transparent markets and supporting forward markets can also help signal scarcity and finance new supplies. Ultimately, the report suggests that managing market forces effectively is essential to prevent geopolitical tensions over critical minerals that have been seen with oil.