Emerging criticality: Unraveling shifting dynamics of the EU's critical raw materials and their implications on Canada and South Africa

Abstract

Critical Raw Materials (or CRMs) are materials that are in high demand, difficult to replace and whose supply is prone to disruption. Various nations have defined CRM lists, although terminology, supporting data and assessment frameworks differ. The European Union (EU) has the longest published history of CRM lists with the first one published in 2011, followed by 3-year revisions. In this study, we analyze CRM designation trends over time by using the EU's five CRM lists to deduce the driving factors. Overall, the number of CRMs have increased by 1.67 new CRMs per year from 2011 to 2023, with the number of new CRMs yet to reach a plateau. Our analysis also reveals issues that could affect the value of the CRM lists including: (1) a hidden two-stage process with transparency issues; (2) static baselines with regards to criticality; (3) an overemphasis on ideology versus pragmatism; (4) a lack of differentiation between CRMs and strategic raw materials (SRMs); (5) a lack of foresight; and (6) a lack of consideration for extrinsic risks and system behaviour. Given these issues, we provide suggestions to improve the CRM assessment methodology and discuss the implications for the EU and the minerals industry. Subsequently, we extend our findings to Canada and South Africa, which are nations in the early stages of CRM framework creation. We find that Canada has more time to realize its CRM framework as compared to the EU, and that South Africa may be faced with a bifurcating reality of extra-national and national needs. Our findings also highlight serious geopolitical implications with the ensuing competition for resources likely resulting in the formation of economic blocs, clubs or cartels. Finally, improvements to the methodology resulting in more predictable outcomes would better incentivize the minerals industry to lower investment risk and ensure a smooth and pragmatic green energy transition.