Rare Earth Minerals Update: February 20, 2024

Archived post from legacy Decis reporting

Good morning and Happy Tuesday.

Today we’re updating the assessments of the countries essential to the supply of rare earth minerals and other critical elements.

This report covers ten countries, each of which is a source of one or more of the essential elements that you may rely on in your supply chain.

(Countries marked with an * are relatively recent additions to the database and the model is still refining the analysis of these locations so this may be more sparse than other assessments.)

These near-term forecasts consider current and upcoming events to assess the likely effect on each country’s stability. That allows you to use these forward-looking assessments in your decision-making.

If you’re unsure of how rare earth minerals and critical elements might affect your business, you can read the background report here.

Don’t forget, DCDR also produces customized risk profiles where we put your organization’s exposure into context so you always have an up-to-date view of your risks and opportunities.

Email me if you're interested in learning more about customized risk reporting.

(Reminder: DCDR's analysis engine generates these reports and conditions apply. See the footer for more.)

Key Metals: Lithium, Nickel

Australia is a leading producer of lithium and has significant nickel reserves, both essential for battery production and EVs.

Baseline stability rating: Australia is Highly Stable

The anticipated impact of upcoming events on the situation in Australia is Negligible.

This conclusion is based on the stable political climate and absence of immediate high-risk events in the provided list.

Rare Earth Reserves: 21 million MT

Brazil, tied with Russia for the third-largest reserves, has a low output of rare earth elements compared to its reserves, suggesting a significant untapped potential.

Baseline stability rating: Brazil is Unstable

The anticipated impact of upcoming events on the situation in Brazil is Degrades.

This conclusion is based on the following analysis: 1. Polarization and Populism: President Bolsonaro's populist leadership and anti-democratic rhetoric may exacerbate societal divisions, potentially leading to protests and political unrest. 2. Electoral Disputes: Continued attempts to undermine trust in the electoral system could fuel political instability, especially if they lead to widespread mistrust and disputes. 3. Political Violence: The rising trend of political violence could further destabilize the political landscape if not effectively addressed. 4. Government Response to Crises: Ineffective handling of crises, such as the COVID-19 pandemic, may fuel public discontent and contribute to instability. 5. Economic Factors: Economic challenges, if not managed effectively, could lead to public unrest and pose challenges to the government's stability

Key Metal: Copper

Chile is the world's largest copper producer, with copper being essential for electrical applications, including renewable energy infrastructure and EVs.

Baseline stability rating: Chile is Stable

The anticipated impact of upcoming events on the situation in Chile is Degrades.

This conclusion is based on the following analysis: 1. New constituent process: The uncertainty and potential conflicts surrounding the new constituent process could lead to heightened political tensions and public unrest, impacting stability. 2. Economic challenges: Failure to address economic issues may exacerbate social disparities and lead to public dissatisfaction, potentially fueling social unrest and political instability. 3. Political turmoil: Ongoing political turmoil, if not effectively managed, could erode public trust in governance and contribute to instability. These upcoming events collectively pose significant challenges to Chile's political stability, with the potential for deterioration if not managed effectively.

Rare Earth Reserves: 44 million metric tons (MT)

China not only has the highest reserves of rare earth minerals but also dominates global production, significantly influencing the rare earth market.

Baseline stability rating: China is Stable

The anticipated impact of upcoming events on the situation in China is Degrades.

This conclusion is based on the following analysis: 1. Economic challenges: Any significant economic downturn or trade disputes could exacerbate existing social and political tensions, leading to increased instability. 2. Authoritarian marketing: Aggressive marketing of the authoritarian system may trigger resistance from both domestic and international actors, potentially undermining political stability. 3. Political tensions and infighting: Growing political tensions and infighting could weaken the leadership's ability to manage crises effectively, contributing to instability. 4. Global governance approach: China's actions on the international stage could provoke backlash and impact domestic political dynamics, potentially leading to instability

Key Metal: Cobalt

The DRC is the world's largest producer of cobalt, a critical component for lithium-ion batteries used in electric vehicles (EVs) and various electronic devices.

Baseline stability rating: Democratic Republic of the Congo is Unstable

The anticipated impact of upcoming events on the situation in Democratic Republic of the Congo is Degrades.

This conclusion is based on the historical context of tense and violent elections, which could exacerbate existing political instability and lead to unrest

Rare Earth Reserves: 6.9 million MT

India has the fifth-largest reserves of rare earth minerals. With nearly 35% of the world’s beach and sand mineral deposits, India's role in the rare earth market could expand with increased investment and development.

Baseline stability rating: India is Stable.

The anticipated impact of upcoming events on the situation in India is Degrades.

This conclusion is based on the following analysis: 1. Elections: Potential shifts in power and policy changes could lead to uncertainty and political tensions, impacting stability. 2. Economic Policies: Controversial reforms or economic hardships could fuel public dissent and destabilize the political landscape. 3. International Relations: Involvement in global conflicts may trigger domestic repercussions and strain stability. 4. Internal Security Issues: Escalation in security threats could challenge political stability and governance.

Key Metal: Nickel

Indonesia is among the top producers of nickel, a critical component for stainless steel and lithium-ion batteries.

Baseline stability rating: Indonesia is Stable

The anticipated impact of upcoming events on the situation in Indonesia is Degrades.

This conclusion is based on the following analysis: 1. 2024 general elections: Elections are inherently periods of heightened political activity and can be a source of instability if not managed properly. The potential for political tensions and unrest during the election process could impact stability. 2. Terrorism threats: Any terrorist activity or increased threat level could lead to security concerns and potential instability, especially if not effectively managed. 3. Organized crime and protective security issues: These issues, if not adequately addressed, could contribute to a sense of insecurity and impact political stability. 4. Economic, social, and environmental challenges: These issues have the potential to lead to social unrest or policy changes, impacting overall stability. 5. Regional integration and international relations: Indonesia's role in ASEAN and its international relations could influence its political stability, especially in the context of geopolitical tensions and regional dynamics. These upcoming events have the potential to exacerbate existing challenges and contribute to a degradation of political stability in Indonesia

Rare Earth Reserves: 21 million MT

Russia shares the third place with Brazil for rare earth reserves. Its production and development of these resources are crucial for diversifying the global supply.

Key Metals: Nickel, Palladium

Russia holds significant reserves of nickel and is a major producer of palladium, used in catalytic converters and fuel cells.

Baseline stability rating: Russia is Weak

The anticipated impact of upcoming events on the situation in Russia is Degrades.

This conclusion is based on the following analysis: President Putin's future plans, internal elite conflicts, and looming government personnel changes have the potential to exacerbate existing political instability and power struggles within the country

Rare Earth Reserves: 22 million MT

Vietnam holds the world's second-largest rare earth reserves. Despite its large reserves, Vietnam's mine production is among the lowest, indicating potential for future development.

Baseline stability rating: Vietnam is Stable

The anticipated impact of upcoming events on the situation in Vietnam is Negligible.

This conclusion is based on the following analysis: - Economic and Trade Developments: Vietnam's integration into global trade agreements may bring economic shifts, but the government's proactive approach to managing such changes mitigates potential instability. - Anti-Corruption Efforts: While anti-corruption measures may affect political figures, the government's commitment to addressing corruption is likely to reinforce stability by demonstrating governance improvements. - Human Rights and Labor Issues: Effective implementation of labor laws and addressing social concerns can contribute to stability, minimizing the risk of significant unrest. - Terrorism Threat: The low terrorism risk and Vietnam's security measures suggest minimal impact on overall stability. - Leadership Changes: The Communist Party's control and prioritization of stability suggest that any leadership changes would be managed to minimize destabilizing effects. Overall, Vietnam's political system's resilience and proactive governance strategies are expected to mitigate potential destabilizing effects of the upcoming events

Key Metals: Copper

KoBold Mining just announced the find of an estimated 247 million tonnes copper deposit at Zambia’s Mingomba site.

Baseline stability rating: Zambia is Stable

The anticipated impact of upcoming events on the situation in Zambia is Degrades.

This conclusion is based on the following analysis: The potential for democratic backsliding, corruption, and economic challenges poses a risk to Zambia's political stability. While no specific upcoming events are listed, the general factors mentioned could lead to increased political uncertainty and public dissatisfaction.

Sign off

~Andrew