🌱 Are the amounts of export restrictions on critical raw materials increasing?
From 2009 to 2020, Argentina, China, India, Kazakhstan, Russia, and Vietnam implemented the most export restrictions on critical raw materials. Since the OECD began collecting data in 2009, there has been a five-fold increase in the export restrictions on critical raw materials. The restrictions targeting upstream materials (i.e. metals and ores) grew faster than those targeting downstream products. About “10% of global exports in critical raw materials now fac[e] at least one export restriction measure”.
🌱 Why do countries impose export restrictions?
The mining industry often creates limited direct employment in the regions where the extraction occurs. In an attempt to counter this, some countries have put export restrictions in place. By restricting the export of unprocessed minerals, they hope to create “higher-value downstream processing jobs in the domestic market”. Countries may also impose export restrictions in the hope “to generate revenue for the government, to control the export of illegally mined products, to enhance environmental protection, or to offset exchange rate impacts caused by exports of several commodities”. While all these policy objectives are legitimate, the OECD’s research suggests “that export restrictions are not an appropriate policy instrument to respond to the challenges of regulating the extractive sector for economy-wide, sustainable growth”.
🌱 Is mineral production currently too concentrated?
China, Russia, Australia, South Africa, and Zimbabwe are key holders and producers of critical raw materials. According to the OECD, the production, import, and export of critical raw materials are all becoming “increasingly concentrated”. That said, the OECD holds that the mineral trade “remains relatively well diversified” and “that the possibility of significant disruption to the global green transition by disturbances to import or export flows of critical raw materials is limited”.
🌱 How can we achieve net zero emissions?
According to the OECD, “the trend toward increasing export restrictions may be playing a role in key international markets, with potentially sizable effects on both availability and prices of these materials”. To achieve net zero, it is essential that we continuously assess “how the concentration of production and trade coupled with the increasing use of export restrictions are affecting international markets for critical raw materials”. A diversification of resources – including increased local sourcing and recycling – could help secure supply chains. Exploring alternative materials to produce batteries and renewable technologies could also help to “ensure that [given] materials shortfalls do not prevent us from meeting our climate change commitments”.