Rare earth is unloaded from a ship onto a quay at the Port of Lianyungang, east Chinas Jiangsu province, China.

Publication Type

Green energy depends on critical minerals. Who controls the supply chains?

Luc Leruth (Tbilisi University), Adnan Mazarei (PIIE), Pierre Régibeau (European Commission) and Luc Renneboog (Tilburg University)

Working Papers 22-12
Photo Credit: Reuters Connect/Wang chun


In light of the transition away from fossil fuel–based energy, this paper highlights the importance of understanding who controls vital parts of the global supply chains of critical minerals and rare earth elements (REEs). Analysis of direct ownership does not reveal the real sources of control over the decisions of the company. To identify those sources, the authors use an index that measures the degree to which important shareholders can affect voting decisions. This analysis is not straightforward, because companies along the supply chain are not necessarily incorporated in the countries in which mining and production activities take place, and shareholders can exert influence through multiple layers of subsidiaries. The analysis reveals that China’s control over the global value chains involving critical minerals and REEs extends beyond what is commonly assumed. It also sheds light on environmental, social, and governance issues in the countries in which mining and/or production take place. The paper advocates increasing transparency regarding the sources of control to better assess and manage economic and geopolitical risks; enhancing recycling, to reduce dependency on foreign supply; avoiding protectionist and trade-reducing reactions; and encouraging research and development in order to speed up the adoption of technologies of substitution.

Data Disclosure:

This paper is based on proprietary data from Refinitiv, processed using the software ZENO-Indices, which is under development and not yet available for purchase. Data underlying other auxiliary calculations in the paper are available here.

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