Inflation Reduction Act spurred race to secure raw materials for energy transition.

A metals shortage is coming—this is a message that has been ringing out for at least a year now from mining and commodity trading executives and analysts alike. It seems, though, that it has not really been heard in the EU or the United States.
Both are making a huge bet on said transition. Both are aware that it is impossible without a lot more metals and minerals than currently used globally. And both are going about securing these metals and minerals by tightening the pool of available sources through what’s being called in political circles friend-shoring.
The situation is particularly acute in the United States, where the Inflation Reduction Act has spurred a veritable race to secure the raw materials for the transition to wind, solar, EVs, and green hydrogen. With several hundred billion in subsidies, miners are happy to oblige. Up to a point.
In a recent report, S&P Global found that the mining industry will encounter “considerable challenges” in securing the metals necessary for the transition to net zero emissions.
The report noted factors such as the stipulation regarding friend-shoring, which means sourcing metals from U.S. free trade partners or within the U.S. itself while banning metals from Russia, China, Iran, and other “foreign entities of concern” in 2025.
That stipulation basically makes an already present problem of short supply even more serious. The United States certainly has free trade partners it could use to source, for instance, copper or lithium. However, local mining, which is widely seen as the most secure supply source possible, is hampered by environmental regulations.

Source: oilprice.com

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