Cleaner energy, higher risk? Firm-level exposure to critical minerals

To what extent has the rise of clean energy technologies created new vulnerabilities in global supply chains? In this paper, I study the role of a new type of 'input uncertainty' associated with critical minerals that underpin the deployment of clean energy technologies. I combine firm-level performance data for publicly listed companies worldwide with textual information from quarterly earnings conference calls to construct text-based measures of technological involvement and mineral exposure. As a first result, my methodology is validated by the strong co-occurrence of clean energy technologies and critical mineral usage across transcripts. In a second result, I model the impact of critical mineral-related input uncertainty on firm performance which shows clear impacts for lithium and copper-related risks across different regions. Finally, I produce text-based evidence on how firms are mitigating supply chain risk, distinguishing between long-term process innovation and short-run operational measures. Overall, I find that new supply chain risks related to critical minerals are limited, most likely to the early stage of development of the sector.