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on Mining |
| By: | Dongsoo Kim (Korea Institute for Industrial Economics and Trade) |
| Abstract: | This report examines the rapidly evolving global landscape of critical mineral resources, highlighting the intensifying strategic weaponization of these materials by major powers. As China consolidates its monopolistic position in the refining, smelting, and processing of critical minerals, it increasingly leverages export controls as diplomatic and trade negotiation tools. In response, the United States is shifting its strategy under the second Trump administration, pivoting from providing subsidies for foreign investments toward securing independent domestic supply chains. The US approach heavily emphasizes bilateral cooperation with resource-rich nations and domestic project development. Concurrently, the European Union (EU) has enacted the Critical Raw Materials Act to systematically reduce its reliance on China. The EU aims to bolster regional autonomy by initiating 60 strategic projects spanning extraction, processing, and recycling. Within this geopolitical context, South Korea has laid a legal foundation through its three supply chain laws, yet faces inherent geographical limitations. This paper argues that South Korea must implement highly tailored, mineral-specific industrial policies, actively support corporate efforts to secure independent supply networks, and foster international partnerships to mitigate supply chain risks effectively. |
| Keywords: | critical mineral resources; CMR; rare earths; rare earths elements; REEs; China; Chinese industry; minerals processing; minerals and mining; supply chains; global value chains; South Korea |
| JEL: | F13 F14 F52 |
| Date: | 2026–01–28 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kietia:023108 |
| By: | Behnaz Minooei Fard |
| Abstract: | Critical mineral markets over the past decade have exhibited distinctive patterns of nonlinear price adjustment, discontinuous supply responses, and regime dependent behavior. This paper develops a dynamic game theoretical model of strategic extraction in critical mineral markets under a nonlinear supply function. Replacing the linear market reactions standard in the exhaustible resource literature with a partially inverse supply function generates three distinct price-quantity equilibria. Each equilibrium corresponds to a qualitatively different market regime as a constrained low-extraction/high-price state reflecting Chinese supply dominance, an intermediate state of partial Rest of the World (ROW) entry, and a high-extraction/low-price state of full supply diversification. The model is solved using Model Predictive Control (MPC), which parameterizes the degree of strategic foresight. Three scenarios are simulated to assess the effects of policy interventions on extraction dynamics, profitability, and resource depletion. The results show that reducing ROW marginal costs is necessary but not by itself sufficient for supply diversification. Moreover, the results reveal that cost subsidies and support payments have limited impact on depletion speed unless accompanied by a change in market behavior from short-termism to extended decision horizons. |
| Keywords: | Critical minerals, game theory, nonlinear supply function, multiple equilibria, Model Predictive Control, export controls, price jumps, strategic extraction |
| JEL: | C61 C7 Q3 |
| Date: | 2026–06–19 |
| URL: | https://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2026-08 |
| By: | Couttenier, Mathieu; Rohner, Dominic |
| Abstract: | The world faces a twin crisis of surging armed conflicts and climate change. As discussed in the current article, while the much-needed green energy transition and de-carbonization of our economies represents great opportunities for fostering peace, it also bears significant risks linked to the scramble for critical minerals. In the current piece we take stock of the evidence linking minerals to civil and interstate conflicts and propose several evidence-based policies that allow to capture a "double dividend" of going green: saving planetary health and reducing armed conflicts. |
| Keywords: | Climate change |
| JEL: | D74 F51 N40 Q34 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20881 |
| By: | Head, Keith; Mayer, Thierry; Melitz, Marc J; Yang, Chenying |
| Abstract: | We model a multi-stage supply chain for EVs from battery production to vehicle distribution. Given industrial policies, firms select where to open facilities at each stage. This is a difficult combinatorial choice problem that we solve with a fast mixed integer linear programming formulation. We estimate the variable and fixed costs parameters using SMM. Counterfactual simulations reveal a tension between boosting EV adoption and promoting domestic supply chains. Due to increasing returns, even unconditional subsidies raise the number of factories in the subsidizing region - by about 16% for EVs and 7% for cells in North America, and even more in Europe. Theoretically, local assembly requirements can push down delivered marginal costs relative to unconditional subsidies. Empirically, local content requirements quadruple the expansion of cell factories in America, but they drive up costs and reduce subsidy uptake, undoing more than half of the EV adoption stimulus coming from pure buyer subsidies. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21184 |
| By: | Rieger, Jonas; Muñoz, Felipe; Grönberg, Lars; Lange, Kai-Robin; Ojeda-Pereira, Iván; Briceño, Dario; Nass, Christian; Stahl, Carsten; Cassola, José; Rojas-Córdova, Carolina |
| Abstract: | Understanding the construction of socio-environmental narratives at a national scale is a complex challenge, particularly when research remains fragmented across disconnected case studies. In Chile, the energy transition has generated territorial disputes as extractive industries and renewable energy projects expand, yet large-scale systematic analyses of how these conflicts are represented in public discourse remain scarce. This paper addresses this gap by applying a spatio-temporal topic modelling framework to a corpus of 1, 996 validated news articles covering conflicts related to the energy transition in Chile from 2011 to 2025. Using RollingLDA, a dynamic adaptation of latent Dirichlet allocation that prevents information leakage from future documents, we identify twelve topics that provide insights into the public narratives surrounding socio-environmental conflicts. Our analysis reveals how specific conflicts, such as the HidroAysén dam project, the Dominga mining controversy, and pollution in sacrifice zones such as Quintero-Puchuncaví, have evolved over time, with some narratives declining while others, including green hydrogen development and lithium extraction, have emerged as central concerns. We complement this temporal analysis with a spatial dimension by mapping the prevalence of topics across Chilean regions through an interactive dashboard. By combining established methods, our work offers a reproducible framework that can be adapted to topic modelling results incorporating spatial and temporal dimensions, enabling the tracking of how socio-environmental narratives emerge, evolve, and fade over time. Please also refer to the GitHub repository at https://github.com/JonasRieger/t2s2026. |
| Date: | 2026–03–31 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:xqn3f_v1 |
| By: | Steven Yamarik (California State University Long Beach); Florian Horky (National Bank of Slovakia); Jarko Fidrmuc (Zeppelin University) |
| Abstract: | This paper uses the shale revolution as a natural experiment to test the resource curse in American states and Canadian provinces. We use a comprehensive set of unproved reserves of unconventional gas and oil plays for North America in 2010 to identify the impact of resource dependence on state-level economic growth. We estimate a growth regression with mining production (resource dependence), corruption and other long-run determinants. Using least squares, we find no significant link between resource dependence and state-level economic growth. However, by instrumenting resource dependence, we find evidence of a resource curse in that greater mining production (and employment) leads to lower state-level growth. Our resource curse finding is robust to fracking bans and moratoriums, alternative GDP measures and resource abundance (proved reserves). In tests for indirect transmission mechanisms, we find that greater mining activity reduces educational attainment, non-resource tax revenue, and trade openness in North America and increases the price of nontradeables relative to tradeables in the US. |
| JEL: | C21 O13 O51 Q33 R11 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:svk:wpaper:1144 |
| By: | Vanden Eynde, Oliver; Vargas, Juan |
| Abstract: | This paper examines how climate change and natural resource dynamics contribute to conflict, with a focus on the implications of the green transition. It reviews empirical evidence showing that extreme weather events - such as droughts, floods, and heatwaves - are linked to increased violence, particularly through economic disruptions, reduced agricultural productivity, and displacement. The analysis also explores the mechanisms through which climate shocks influence conflict, including opportunity costs, resource competition, and behavioral responses to environmental stress. The discussion then turns to the role of natural resource exploitation, especially in the context of rising demand for minerals essential to low-carbon technologies. The paper highlights how resource price and availability shocks can trigger conflict, often depending on the type of resource, extraction method, and local governance. It also addresses the overlap between climate- and resource-driven conflict risks, emphasizing that their interaction may amplify instability. Throughout, the paper identifies open research questions related to prediction, the effects of long-run environmental changes, and the design of policy responses. These include insurance schemes, climate adaptation strategies, infrastructure investment, and regulatory frameworks for resource governance. The findings point to the need for research that integrates climate and conflict dynamics, with the goal of informing policies that can mitigate the risks associated with environmental change and resource pressures. |
| Keywords: | Conflict; Climate shocks; Climate change; Natural resources |
| JEL: | D72 D74 L23 Q54 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21170 |
| By: | Lumbanraja, Alvin; Mouabbi, Sarah; Passari, Evgenia; Rousset Planat, Adrien |
| Abstract: | Commodity supply shocks are a plausible but empirically elusive source of business-cycle fluctuations. We develop a comprehensive framework to measure them, constructing daily supply and demand proxies for 20 commodities — spanning energy, metals, agriculture, and livestock — from textual analysis of over one million news articles (2001-2023). These measures allow us to separate supply from demand across the full commodity market, not just oil. A striking finding emerges: non-oil supply disruptions affect inflation and industrial production at least as strongly as oil disturbances, a result previously undocumented in the literature. Transmission varies sharply with countries' commodity trade positions: net importers experience more persistent output contractions and stronger inflation pass-through, while net exporters are partially insulated. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21244 |
| By: | Dugoua, Eugenie; Moscona, Jacob |
| Abstract: | This chapter examines the economics of climate innovation and its role in the clean technology transition. It outlines the incentives, market failures, and policy levers that shape the development and diffusion of clean technologies; traces global patterns in technology development and deployment; and highlights frontier challenges and open questions related to climate adaptation, critical mineral supply chains, artificial intelligence, and geopolitics. The analysis explores the role of effective climate policy, stressing the relevance of coordinated approaches that match instruments to technology maturity and local context. |
| Keywords: | Innovation |
| JEL: | O3 Q5 O13 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20853 |
| By: | Reka Juhasz; Dávid Krisztián Nagy; Claudia Steinwender; Woan Foong Wong |
| Abstract: | Maritime transport remains the backbone of global trade, yet the port and shipping network that carries it has been transformed by containerization and related technological advances. Drawing on newly available granular data — digitized historical shipping records, georeferenced ship movements, and shipment-level routing information — we present five stylized facts on the structure and evolution of the maritime network. Global shipping activity is highly concentrated among a changing lineup of dominant top ports even as lower-ranked ports disperse, while state-owned Chinese port terminal operators increasingly account for these global volumes, boosting overall port operations while delivering efficiency gains mostly to Chinese vessels. We use these facts to organize a synthesis of a fast-growing literature: containerization reshaped which port cities could expand, reinforced hub-and-spoke concentration that yields large but localized welfare gains, embedded ports in multimodal networks that amplify the returns to infrastructure, and generated market power, congestion, and environmental costs. Together, this evidence shows how evolving maritime technologies simultaneously deepen global integration and heighten the economic and geopolitical importance of critical nodes in the transport network — and of who controls them. |
| Keywords: | transport networks, ports, international trade, trade costs, containerization, geoeconomics |
| JEL: | F13 F14 R41 R42 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12793 |
| By: | Jason Nassios |
| Abstract: | Australia is one of the world's largest exporters of liquefied natural gas (LNG), which is natural gas cooled into liquid form for transport and export. Yet Petroleum Resource Rent Tax (PRRT) collections remain modest relative to LNG production and export revenues. This paper argues that low PRRT revenues are primarily structural, reflecting incompatibilities between the design of the tax and the economics of modern LNG projects. Two mechanisms are central. First, tax base measurement: gas transfer prices used to value upstream sales are not publicly observed, introducing uncertainty about how LNG-related rents are reflected in the tax base. Second, intertemporal deferral: large upfront capital expenditures generate carried-forward deductions that are uplifted over time, delaying the recognition of taxable rents. As a result, PRRT liabilies are confined to a narrow upstream base and deferred over the life of projects. Despite strong underlying profitability, observed PRRT revenues remain limited. Given this, incremental reforms such as increasing the statutory tax rate, are unlikely to materially improve rent capture, because the underlying tax base is constrained. More substantive gains are likely to arise from reforms that broaden or more accurately define the tax base. Capturing a larger share of LNG-related rents will require fiscal instruments that more directly target observable project values, or better align taxation with the full LNG value chain. |
| Keywords: | Petroleum Resource Rent Tax, Resource rent taxation, Uplift, Deductions |
| JEL: | H21 H25 Q38 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:cop:wpaper:g-372 |
| By: | Luttini, Emiliano; Mekonnen, Dawit; Mercer-Blackman, Valerie Anne; Sørensen, Bent E |
| Abstract: | Using world commodity prices as an instrument, this paper proposes a novel method for decomposing channels of international risk sharing for commodity-exporting countries. The method identifies the commodity "sector'' as the projection of gross national product growth on commodity-price growth, and the non-commodity "sector'' as its orthogonal complement. Commodity-price-induced risk is shared significantly more than other risks, in particular via pro-cyclical government savings, but also via counter-cyclical net international factor income. |
| JEL: | F02 F21 F36 Q02 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21100 |
| By: | A. Luisi; F. Roccazzella; A. Triantafyllou (Audencia Business School) |
| Abstract: | We examine the time-varying nature of the comovement of the slope of the futures curve in major agricultural, metals and energy commodity futures markets in a Global Vector Autoregressive model. We find significant comovement between the slopes, indicating the co-existence of backwardation and contango in many seemingly unrelated commodity futures markets. The degree of comovement in commodity futures curves intensifies during periods of financial and macroeconomic turmoil and increased geopolitical risk. In contrast, our analysis shows that the gold futures market becomes more backwardated (contangoed) when the rest of the commodity futures markets become more contangoed (backwardated). |
| Keywords: | Time varying Global VAR, Backwardation, Contango, Commodities, Futures markets |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05635286 |
| By: | Kai A. Konrad |
| Abstract: | An industrial economics analysis of China’s quasi-monopoly on refined rare earth materials shows: even if China strictly maximizes national prosperity and abstains from geopolitical power play, a significant price differential emerges between the export price and the price for domestic users. The price differential itself is not evidence of geopolitical intentions. However, this equilibrium price gap widens if we assume that China views itself as contesting in a geopolitical, tournament-like situation against the United States. These two results are derived within the framework of a tournament model that imbeds the characteristics of a dominant supplier with a fringe - market, but adds geopolitical goals to the dominant supplier’s objective. |
| Keywords: | Rare earth, monopoly power, China, geopolitics, strategic autonomy, political vulnerability |
| JEL: | F13 F51 L72 Q34 |
| Date: | 2026–06–01 |
| URL: | https://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2026-06 |
| By: | Ferrari, Alessandro; Pesaresi, Lorenzo |
| Abstract: | We study how product specialization choices affect supply chain resilience. We propose a theory of supply chain formation in which only compatible inputs can be used in final production. Intermediate producers choose how much to specialize their goods, trading off higher value added against a smaller pool of compatible final producers. Final producers operate complex supply chains, requiring multiple complementary inputs. Specialization choices determine how quickly final producers can replace suppliers after disruptions, and thus supply chain resilience. In equilibrium, production inputs are over-specialized due to a novel network externality. Intermediate producers fail to internalize how their specialization choices affect the likelihood that final producers source all required inputs, and therefore the lost value added from complementary inputs if production halts. As a result, supply chains are more productive in normal times but less resilient than socially desirable. We characterize the optimal transfer that restores the efficient allocation and show that non-fiscal interventions, such as compatibility standards, are generally welfare-enhancing. |
| Keywords: | Supply chains; Specialization; Product design; Resilience |
| JEL: | D21 L14 L22 L23 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21139 |
| By: | Monnet, Eric |
| Abstract: | The Bretton Woods system is often described as freeing national monetary policies from the gold-reserve constraints of the gold standard. Breaking the “gold fetters†was essential to the embedded liberalism and economic interventionism of the postwar era. Yet gold retained a crucial role: monetary authorities backed currency with gold reserves, both de facto and de jure, frequently maintaining gold cover ratios comparable to those of the gold standard. How, then, could gold backing coexist with autonomous domestic macroeconomic policy? This article shows that the combination of two phenomena provides an answer: credit growth and currency growth became increasingly decoupled after 1945, and central banks shifted their emphasis from money toward credit. This created substantial scope to stimulate domestic economic activity through credit expansion without being constrained by the link between gold and currency in circulation. Econometric analysis for 38 countries indicates that gold reserves remained strongly correlated with currency, but not with bank credit. Changes in credit markets and central bank instruments therefore allowed gold backing to persist largely as a symbolic tie, without constraining domestic policy. Gold, however, exerted pressure on US policy and shaped international monetary relations. These findings indicate that institutional persistence does not necessarily generate similar economic effects across historical periods. |
| Keywords: | Bretton Woods |
| JEL: | D8 E5 F5 F55 M14 N1 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21215 |