The strategic role of lithium in the green energy transition: Towards an OPEC-style framework for green energy-mineral exporting countries (GEMEC)

The energy sector is currently undergoing a transition towards increased utilization of green energy technologies. The green energy transition relies heavily on metals, such as aluminium, chromium, cobalt, copper, lithium, manganese, nickel, rare earth elements (REEs), silicon, tin, titanium, tungsten and zinc, among others. However, this transition occurs within the context of: (1) a geographical concentration of known mineral deposits and downstream capability; (2) a demand that vastly exceeds supply; (3) a strong drive to mitigate environmental and energy concerns; and (4) an increasing level of geopolitical conflicts. Consequently, the energy transition is not straightforward, as it intensifies material demand, market and geopolitical competition. This is especially true for lithium which is pivotal in this transformation. Concerns driven by material access, energy sustainability and national sufficiency are increasingly resulting in national and super-national geopolitical activities, such as resource nationalisation, forming strategic or trade alliances, encouraging near- and friend-shoring, promoting material circularity, and accelerating green technology research and deployment. This study examines the global impact of the green energy transition, from the perspective of the mineral value chain, including downstream products, its implications on the projected demand, and geopolitics. There are many potential outcomes in the future, depending on: (1) the pragmatic outcomes of the energy transition, which is only empirically realizable through implementation; (2) the strength of independence and global stability; and (3) the rise of regional or friendly trade blocs. In particular, this study examines a future scenario in which there is an emergence of an OPEC-style organisation for green energy minerals and metals (GEMMs), focusing on lithium as an example, because: (1) it has a clear and essential role in the green energy transition; (2) it is geographically concentrated in a manner that facilitates production coordination; and (3) it is overwhelmingly consumed by developed nations but supplied by developing nations. An organisation built around lithium could be a prototype to other GEMM markets. Consequently, we propose that it is possible to leverage existing circumstances and propose that such an organisation, here termed Green Energy-Mineral Exporting Countries, or “GEMEC”, could serve as a collaborative platform to enhance geopolitical positioning, maximise economic benefits through coordinated production and export policies, and address the environmental, social and governance challenges associated with the green energy transition.