The Wall Street Journal reports that due to slowing growth in demand for electric vehicles (EVs), the supply of rare earth minerals essential for EV parts is outstripping demand and entire mines are being shut down.
Mines around the world are shutting down operations or canceling construction projects in response to reduced demand, including Albemarle's $1.3 billion plant in North Carolina. Amid market turmoil, the company announced it would postpone spending on the project. according to To WSJ The total market share of EVs increased from 3.1% in January 2023 to 3.6% in December 2023, but the share of US auto inventory increased from 2.8% to 5.7% in the same period as demand did not keep up with supply. increased to (Related article: EV sales in California drop for the first time in 10 years as the state continues its green promotion)
Over the past few years, global mineral producers have ramped up mining activity in an attempt to capitalize on the emerging EV market, but consumers have refused to adopt EVs as much as producers had hoped, leading to rare minerals becoming more marketable. flooding, leading to a fall in prices. , according to WSJ. Metals markets are often subject to boom-and-bust cycles due to unpredictable demand and slow mine operations.
According to WSJ, lithium prices have fallen about 90% since the beginning of last year, and nickel prices have halved in the same period. A mine on the French Pacific island of New Caledonia recently ceased operations, even though it supplies more than 6% of the world's nickel supply.
Competition for strategic minerals such as copper, cobalt, lithium and nickel could increase price pressures and raise the costs of climate change, IMF economists write in the latest issue of F&D. https://t.co/X72oppqbAe pic.twitter.com/hoqLoenEdb
— IMF (@IMFNews) February 17, 2024
According to WSJ, the decline in demand for minerals has been particularly severe for Australia's mining industry and the economy in general, with the country's government recently making it easier for businesses to receive government subsidies to provide some stimulus to struggling businesses. For this reason, nickel has been designated as an important mineral. . The collapse in mineral prices has wiped out more than a fifth of Australia's mining supply.
China controls about 87% of the world's rare earth mineral refining capacity, and the United States seeks to subsidize projects outside China to ensure access to the resources. The Biden administration has included a provision in the EV tax credit that would require that a certain percentage of minerals not come from foreign companies of concern, such as China, in order to qualify.
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