The United States needs a diversified supply chain in the clean energy industries to avoid leaving a large part of the materials and processing in a handful of countries, according to U.S. Treasury Secretary Janet Yellen.
"As we move away from fossil fuels, we remain concerned about the risks of over-concentration in clean energy supply chains," Yellen said in a speech in Las Vegas on Monday, per the excerpts obtained by Reuters.
"Today, the production of critical clean energy inputs - from batteries to solar panels to critical minerals - is concentrated in a handful of countries," the secretary added.
China, Indonesia, and several African countries dominate a large part of the supply chain, of raw materials and processing, of many technologies including batteries, solar panels, and wind turbines.
As global investments in minerals are soaring, China continues to dominate supply and supply chains, which is a challenge to the energy transition.
Bank UBS expects China to end up controlling nearly one-third of the global lithium supply by 2025. Mines controlled by Beijing, not only in China but also in Africa, will see their total lithium output jump more than threefold in just three years-from 194,000 tons in 2022 to 705,000 tons by 2025, UBS said in a note earlier this year, carried by Bloomberg.
This surge in supply would raise the Chinese share of global lithium supply to 32% in 2025, up from 24% in 2022, the bank said.
A report from Darton Commodities, quoted by the Financial Times, expects that China's cobalt share is set to hit 50% of global cobalt output in the next two years. China's CMOC Group is currently the second biggest producer of cobalt in the Democratic Republic of Congo, the country providing 75% of global supply now.
Limited diversification of supply could present a challenge to the industry, the International Energy Agency (IEA) warned last month. China, the Democratic Republic of Congo, and Indonesia continue to dominate a large part of the critical raw material supply, while China is a dominant player in refining operations, the IEA noted.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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