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on Mining |
| By: | Joaquin Vespignani; Russell Smyth; Jamel Saadaoui; Yitian Wang |
| Abstract: | We develop novel, stage-specific, geopolitical risk indicators to examine how geopolitical risk is distributed across the supply-chain for lithium and copper, two minerals which are vital for low-carbon technologies. We find that refining is the geopolitical bottleneck for both minerals, reflecting that refining capacity is highly concentrated in China. We examine refining diversification, strategic stockpiling, and AI-driven productivity gains as complementary policy instruments for mitigating exposure to geopolitical risk at the refining stage. We show that reducing China's refining share substantially lowers refining-stage geopolitical risk, with larger gains for lithium than for copper. We find that stockpiling plays a critical role in buffering near-term geopolitical shocks, but significantly increases the projected shortfall in copper and lithium which is needed to realize the clean energy transition under alternative Net Zero pathways. We demonstrate that AI-driven productivity gains will be needed to narrow the projected supply gaps for both minerals. Our results suggest that ensuring effective security of critical minerals requires a coordinated policy mix, combining refining diversification, strategic stockpiling, and productivity-enhancing technological change. |
| Keywords: | critical minerals, copper, lithium, geopolitical risk, refining bottlenecks |
| JEL: | C14 Q20 Q41 Q43 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2026-15 |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics) |
| Abstract: | This study critically examines HYBRIT, a Swedish flagship project led by state-owned LKAB to produce fossil-free sponge iron using hydrogen from fossil-free electricity. Framed as central to EU’s green transition, HYBRIT promised CO₂ cuts exceeding Sweden’s total emissions but faced major technological, economic, and infrastructural hurdles. The analysis situates HYBRIT within broader “moonshot†policies, prone to political enthusiasm, rent-seeking, and neglect of opportunity costs. The project required large-scale hydrogen production, storage, and process adaptation, unproven at commercial scale. Profitability depended on persistently low electricity prices and high CO₂ costs while global competition in green steel intensified. Electricity constraints in northern Sweden further strained feasibility. Political, regional, and corporate interests nonetheless aligned behind HYBRIT, aided by limited scrutiny of state-owned firms. Mounting criticism and shifting priorities ultimately led LKAB to defer its sponge iron plans indefinitely, pivoting toward high-grade ore and critical minerals. The case highlights the risks of mission-oriented policies when political symbolism outweighs technological and market realities. |
| Keywords: | green deals, green steel, hydrogen, mission-oriented policies, moonshots, public choice, rent-seeking |
| JEL: | L20 L52 L70 O38 Q28 Q48 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18359 |
| By: | Megha Patnaik |
| Abstract: | Metal markets are an important but understudied aspect of the global energy transition. This paper demonstrates differential metal price responses to the Paris Agreement based on their role in the energy transition. We use a difference-in-differences design with daily price data from 2001 to 2024 for eight industrial metals. The treatment group distinguishes between traditional green metals (Copper, Aluminium, Nickel), which are established in renewable energy infrastructure, versus emerging green metals (Lithium), that are critical for storage. The control group includes non-green metals (Zinc, Lead, Tin, and Iron Ore). We find traditional green metals experienced 31% price decline relative to control metals following the Paris Agreement, while Lithium exhibited a 120% price increase. |
| Keywords: | Paris agreement, green transition, metal prices |
| JEL: | Q54 Q58 G14 L72 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12375 |
| By: | Gavin Harper; Viet Nguyen-Tien |
| Abstract: | Why critical materials are central to global strategic partnerships |
| Keywords: | Green Growth |
| Date: | 2026–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepcnp:727 |
| By: | Chepeliev, Maksym |
| Abstract: | Rapidly increasing material extraction is putting major pressure on ecosystems. Future increases in incomes and population could result in over 2.5 times growth in global material demand by 2050, putting even more pressure on the environment. Thus, an absolute decoupling of material use from GDP and income is of major importance to preserve safe operating boundaries. It is vital to understand how current policy efforts, including climate mitigation, could impact material use patterns and what complementary circular economy (CE) policies could be implemented to support dematerialization. At the same time, there is a lack of global datasets and related modeling tools that could support such an analysis. To address this limitation, here we develop a special version of the Global Trade Analysis Project (GTAP) Circular Economy (GTAP-CE) Data Base with detailed representation of primary, secondary, and recycling activities for metals (steel, aluminum, copper, etc.) and plastics, detailed representation of fertilizers, as well as disaggregated cement activity. The GTAP-CE Data Base is based on the v11c of the GTAP-Power Data Base with the 2017 reference year, representing the global economy across 99 activities, 141 individual countries and 19 composite regions. Introduced sectoral splits are designed to facilitate both the assessment of the circular economy policies, as well as Carbon Border Adjustment Mechanism (CBAM) measures. The developed GTAP-CE Data Base is distributed in model-friendly formats and can be readily linked to the GTAP-based CGE models for the assessment of various policy scenarios either in the dynamic or static frameworks. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:gta:resmem:7674 |
| By: | Dietz, Simon; Jahn, Valentin |
| Abstract: | The TPI Centre’s Carbon Performance assessments have historically assessed companies’ emission pathways on an emissions intensity basis – that is, the volume of greenhouse gas (GHG) emissions per unit of economic output. Coal mining is the first sector that we assessed based on absolute emissions rather than emissions intensities. This approach reflects the unique decarbonisation challenges specific to coal mining. Achieving net zero in this sector ultimately requires an almost complete phase-out of coal production. Unlike other industries, where efficiency improvements and new production methods can reduce emissions intensity while maintaining output, coal mining’s main decarbonisation strategy of phasing out production cannot meaningfully be assessed on an intensity basis. This is because coal production and Scope 1-3 emissions would reduce roughly proportionally. To account for these sector-specific characteristics, we introduce the Emissions Contraction Approach (ECA). The ECA remains grounded in the Sectoral Decarbonisation Approach (SDA), which the TPI Centre applies to all its Carbon Performance assessments. This section outlines the rationale behind using the ECA and explains why an alternative method is necessary for assessing the sector’s alignment with international climate goals. |
| JEL: | R14 J01 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137418 |
| By: | Hamidou Diallo (Université de Kindia); Mamadou Saidou Diallo (Université de Kindia) |
| Abstract: | This paper studies whether large mining commitments can reshape macroeconomic exposure to climate shocks before extraction begins. Focusing on Guinea—a highly rainfall-dependent economy—and the Simandou iron ore project, we test whether the sensitivity of growth to rainfall variability changes after a discrete commitment regime associated with major legal and contractual milestones. Using annual data and interaction specifications with Newey–West HAC inference, we find a pronounced regime shift: rainfall shocks are not precisely associated with GDP growth in the pre-commitment period, but become economically large and statistically meaningful after commitment. In the preferred specification with macro controls, a one–standard-deviation rainfall shock reduces real GDP growth by about 0.54 percentage points in the post-commitment regime, implying that rainfall variability explains a nontrivial share of observed growth volatility. Sectoral results indicate that amplification is not cleanly concentrated in agricultural growth; instead, post-commitment rainfall shocks are associated with a positive and significant response in services, consistent with altered co-movement and demand spillovers under changing sectoral composition. Complementary dynamic diagnostics and counterfactual simulations reinforce the timing and magnitude of this amplification. Overall, the findings suggest that extractive commitment can endogenously increase climate vulnerability by reshaping economic structure and shock propagation—even in the absence of mining production or resource revenues—highlighting the importance of aligning extractive planning with climate resilience and agricultural buffering capacity during pre-production phases. |
| Abstract: | Cet article analyse si de grands engagements miniers peuvent modifier l'exposition macroéconomique aux chocs climatiques avant le début de l'extraction. En se concentrant sur la Guinée, économie fortement dépendante des précipitations, et sur le projet de Simandou, nous examinons si la sensibilité de la croissance à la variabilité pluviométrique évolue après un régime d'engagement lié à des jalons juridiques et contractuels majeurs. À partir de données annuelles et de modèles à interactions estimés avec des erreurs HAC de Newey–West, nous identifions un changement de régime marqué : les chocs pluviométriques deviennent économiquement significatifs et statistiquement pertinents après l'engagement. Dans la spécification privilégiée, un choc d'un écart-type réduit la croissance réelle du PIB d'environ 0, 54 point de pourcentage dans la période post-engagement. Les résultats sectoriels suggèrent que cette amplification ne se limite pas à l'agriculture, mais s'accompagne d'une réponse positive du secteur des services, traduisant une recomposition sectorielle et des effets de propagation. Ces résultats indiquent que les engagements extractifs peuvent accroître la vulnérabilité climatique en modifiant la structure économique, même en l'absence de production minière, soulignant la nécessité d'intégrer la résilience climatique dès les phases pré-productives. |
| Keywords: | Guinea, macroeconomic volatility, structural change, mining commitment, rainfall variability, climate shocks, Chocs climatiques, Guinée, vulnérabilité, changement structurel, engagement minier, précipitations, Simandou |
| Date: | 2025–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05462959 |
| By: | Anna Cole; Christopher J. Neely |
| Abstract: | One of the U.S. dollar’s influential international roles is as the dominant reserve currency, widely used in international foreign exchange reserves, which are rainy day funds for governments. |
| Date: | 2026–02–25 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00100:102817 |
| By: | Rossouw, Riaan (North-West University); Cameron, Martin (Trade Research Advisory (Pty) Ltd); Naudé, Wim (RWTH Aachen University) |
| Abstract: | How should a developing country such as South Africa respond to the USA's "Liberation Day" Tariffs of April 2025 and subsequent shocks? Combining the GTAP-Dynamic (GDyn) Computable General Equilibrium model with an expanded Decision Support Model (DSM), we simulate five policy response scenarios over the period 2017–2030. Our results demonstrate that a passive response to US protectionism is the least attractive option. However, a comprehensive policy mix comprising expansionary monetary policy (to induce exchange rate depreciation), unilateral tariff reduction (to lower input costs), and targeted export promotion (to diversify exports) can take South Africa’s real GDP growth back to rates last seen during 2004 to 2007 (at around 5.51% in compound annualized growth (CAGR) terms) by 2030, resulting in a surge in unskilled employment through an investment-led boom in sectors like construction and metals of around 9.8% CAGR by 2030. The results confirm that, following this path, South Africa can effectively counter Trump's trade shocks. |
| Keywords: | trade, exports, monetary policy, trade policy, CGE modelling, GTAP, South Africa |
| JEL: | F13 E52 C68 O55 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18391 |
| By: | Loren Brandt; Feitao Jiang; Yao Luo; Yingjun Su |
| Abstract: | This paper examines how the geographic distribution of supply and demand shapes market power in the Chinese steel industry. Drawing on novel data, we develop and estimate an equilibrium model that accommodates spatial demand variations and rich firm heterogeneity—encompassing differences in location, product quality, production coefficients, and cost efficiencies. Using this framework, we simulate the impact of shifts in downstream demand and evaluate the welfare implications of mergers under various market frictions—an issue central to China’s industrial policy. We show that consolidation design is central to welfare outcomes: mergers led by more efficient firms and confined within regions generate substantially larger gains than nationally coordinated consolidation centered on large incumbents. The realized 2018–2024 merger wave achieved only a fraction of attainable welfare improvements. Our simulation results also suggest that as the geographic locus of demand evolves, the effects of industrial reorganization hinge critically on how supply adjusts across regions. |
| Keywords: | Spatial Differentiation, Capacity Misalignment, Market Power, Merger Analysis, Sales Aggregation |
| JEL: | G34 L13 L61 R12 |
| Date: | 2026–02–25 |
| URL: | https://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-820 |