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Revising the ‘Economic importance’ dimension: The European framework for critical raw materials, completed and illustrated using lithium

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  • Daw, Georges

Abstract

In demand since time immemorial, increasingly used as intermediate consumption and at the heart of energy and digital transitions, mineral substances are vital to the functioning of economies. While all are important, not all are strategic, and even less so, critical (as lithium). The European Union depends on them. Since 2010, the European Commission has produced statistics evaluating a broad and extensible set of criticality sub-indicators integrated in a two-dimensional matrix (Supply Risk, SR, and Economic Importance, EI) and a list of critical substances based on a combination of SR and EI, updated every 3 years. This article takes a closer look at one of these dimensions, namely the EI one. Our proposed dimension, "Economic effect, EE", integrates cost of using raw materials. Articulated in coherence with EI and assessed over the most recent period, it is compared with EI for lithium. EE suggests a systematically higher criticality than EI. Lithium stands out as 4% more critical. The dynamics of its criticality, on the other hand, is non-monotonic, enriching that of EI. The article also numerically illustrates the prospective use of SR, EI and EE. In addition, an up-to-date overview of lithium (markets, uses, production costs, supply, demand, prices, stocks and trade) has been provided, both for the EU and worldwide.

Suggested Citation

  • Daw, Georges, 2025. "Revising the ‘Economic importance’ dimension: The European framework for critical raw materials, completed and illustrated using lithium," Resources Policy, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:jrpoli:v:101:y:2025:i:c:s0301420724008201
    DOI: 10.1016/j.resourpol.2024.105453
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    More about this item

    Keywords

    Raw materials criticality; Lithium; European Commission's criticality assessments; Supply risk; Economic importance; Economic effect;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General
    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • N54 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: 1913-
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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