<p>Relying on lithium-ion batteries may impede the faster adoption of alternative energy storage technologies. This study defines foreign direct investment as a foreign investor’s ownership stake in a mining project and examines how it affects diversification and supply risks of critical materials for emerging energy storage. Here we propose the supply risk index and maps global production of natural graphite, manganese, sulfur, molybdenum, and vanadium across 205 regions/territories globally. Results reveal that among material production in 2020, foreign direct investment controlled 31.3% of manganese, 27% of natural graphite, 29% of molybdenum, 27.3% of vanadium, and 14% of sulfur. The proposed index treats foreign direct investment-controlled production as investors’ domestic production and reveals that increasing foreign direct investment reduces supply risks. The findings highlight the importance of diversifying material production via foreign direct investment to reduce dependency on a few dominant countries and strengthen supply chains of critical materials.</p>

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Foreign direct investment in mining projects reduces the global supply risk of critical materials

  • Jean Pierre Namahoro,
  • Qiaosheng Wu,
  • Zhou Na,
  • Deyun Wang

摘要

Relying on lithium-ion batteries may impede the faster adoption of alternative energy storage technologies. This study defines foreign direct investment as a foreign investor’s ownership stake in a mining project and examines how it affects diversification and supply risks of critical materials for emerging energy storage. Here we propose the supply risk index and maps global production of natural graphite, manganese, sulfur, molybdenum, and vanadium across 205 regions/territories globally. Results reveal that among material production in 2020, foreign direct investment controlled 31.3% of manganese, 27% of natural graphite, 29% of molybdenum, 27.3% of vanadium, and 14% of sulfur. The proposed index treats foreign direct investment-controlled production as investors’ domestic production and reveals that increasing foreign direct investment reduces supply risks. The findings highlight the importance of diversifying material production via foreign direct investment to reduce dependency on a few dominant countries and strengthen supply chains of critical materials.