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Avenues to Maximizing Value Added from Critical Minerals

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  • Pietrobelli, Carlo

    (RS: GSBE other - not theme-related research, Mt Economic Research Inst on Innov/Techn)

  • Valverde Carbonell, Jorge

    (RS: GSBE other - not theme-related research, Mt Economic Research Inst on Innov/Techn)

Abstract

The energy transition success depends largely on the availability of critical minerals, and this may produce a window of opportunity for producing countries. In this regard, this paper examines the different avenues to maximizing value added from critical minerals production. In particular, we assess whether the classic structural change recipe could be a good road map for countries rich in critical minerals. For this purpose, we use copper and lithium as case-studies. For each mineral, we discuss and assess the cost competitiveness and the potential benefits for countries to diversify downward, including potential spillovers proxied by products’ complexity. Our research shows that maximizing value-added in the long term is a tailored mineral-country-specific challenge that can be pursued through three main channels: deepening, moving downward and/or moving upward along the mining value chain. These depend on the comparative advantages of the country and the particular features of the mineral market. In the case of copper, deepening and moving upward seems to be preferable given the bounded value-added of nearer downward chain stages, such as smelting and refining. However, under a low-carbon paradigm downward stages could become competitive. In the case of lithium, moving downward appears a preferable strategy due to the significantly larger value-added and spillovers derived from producing grade battery lithium (carbonate or hydroxide) rather than producing lithium intermediate compound, such as sulfate or chloride, or lithium ore (spodumene).

Suggested Citation

  • Pietrobelli, Carlo & Valverde Carbonell, Jorge, 2025. "Avenues to Maximizing Value Added from Critical Minerals," MERIT Working Papers 2025-019, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2025019
    DOI: 10.53330/HQBR9588
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    References listed on IDEAS

    as
    1. Jara, J. Joaquín, 2017. "Determinants of country competitiveness in attracting mining investments: An empirical analysis," Resources Policy, Elsevier, vol. 52(C), pages 65-71.
    2. Valverde-Carbonell, Jorge & Pietrobelli, Carlo & Menéndez, María de las Mercedes, 2024. "Minerals’ criticality and countries' mining competitiveness: Two faces of the same coin," Resources Policy, Elsevier, vol. 98(C).
    3. Bellora, Cecilia & Fontagné, Lionel, 2023. "EU in search of a Carbon Border Adjustment Mechanism," Energy Economics, Elsevier, vol. 123(C).
    4. Tilton, John E., 1992. "Mineral endowment, public policy and competitiveness : A survey of issues," Resources Policy, Elsevier, vol. 18(4), pages 237-249, December.
    5. repec:hal:cesptp:halshs-04331408 is not listed on IDEAS
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    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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