This is the first project to assess the impact of major global crises, spanning more than a century, on the production of mineral commodities that are essential for transportation, using the BGS world mineral database.

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"The impact of extreme shocks on raw material supply chains for the transport manufacturing sector" Full report

Executive Summary

The project investigated the impact of extreme shocks or crises on mineral supply and demand dynamics. The objective was to evaluate the impact of the event, including the duration of its effects on mineral supply, and the time taken for mineral production to recover. The research focussed on aluminium, nickel and cobalt, three metals essential to the transport sector, and each having different supply-demand characteristics.

The research shows that historical shocks (e.g. pandemics and financial crises) have had a significant impact on the production of these metals. However, it is difficult to draw direct comparisons between historical events and Covid-19, as the current pandemic is unprecedented in terms of its magnitude, uneven global impact and rates of recovery, varied international policy responses, and the scale of the shock to the world economy. Government stimulus packages and vaccine-driven reopening of the global economy should result in gradual strengthening of raw material demand. However, Covid-19 has clearly exposed the vulnerabilities associated with complex, global supply chains that are supporting the UK economy. The long-lasting effects of the Covid-19 pandemic on primary raw materials production, as a result of reduced investment in the exploration and mining sectors is unclear. Coupled with the impact of Covid-19 on waste systems and a recession that may keep products and materials in use longer, it may setback efforts to develop a circular economy.

Concentration ratio represented by the summed share of the top three producers for each of the commodities considered. (click to expand)

Key Findings

1) Historical events that have led to health or economic crises are indicative of how contemporary mineral markets may respond. However, they do not provide a good proxy for the longer-term effects of the Covid-19 pandemic on mineral supply and demand and the circular economy. This is because the current pandemic represents an unprecedented shock to the economy and may result in fundamental changes to consumer and societal behaviours.

2) The transportation sector is dependent on some mineral raw materials that have highly concentrated production and associated security of supply risks. This risk could be reduced through diversification of primary production, improved understanding of global supply chains and greater domestic recycling of metals.

Project Team

Pierre Josso (PI – early career researcher): Minerals Geoscientist, BGS

Paul Lusty: Principal Economic Geologist and BGS Critical Raw Materials Lead, BGS

Teresa Brown: Mineral Commodity Geologist, BGS

Eimear Deady (early career researcher): Minerals Geoscientist, BGS

Naomi Idoine: Administrator Economic Minerals, BGS

Carolin Kresse (co-I – early career researcher): Mineral Commodity Geologist, BGS