The attached paper examines the presence and impact on trade and global
supply of export restrictions applied to selected metals and minerals.
The strategic metals and minerals selected for this study have a number
of shared characteristics which in turn determine their impact. Their
exploitable mineral reserves are generally found in one or a few
geographical regions of the world implying that their potential mining
and export are concentrated in a few countries. For most of these
strategic raw materials, the top three producing countries account for
over half of world production. In some cases, production is so
concentrated that over half of world production occurs in a single
country. This in turn leads to a dependence on such imports by countries
that consume these materials or the finished goods produced from them.
It also suggests that countries producing these raw materials may
influence their prices and quantities made available on world markets.
The metals and minerals in this study are generally used as inputs into
high-technology or strategic sectors. Although often needed only in
small quantities, these metals are increasingly essential to the
development of technologically sophisticated products. They play a
critical role in the development of innovative “environmental
technologies” to boost energy efficiency and reduce greenhouse gas
emissions. Hydrogen-fuel based cars, for example, require platinum-based
catalysts; electric-hybrid cars need lithium batteries; and rhenium
super alloys are an indispensible input for modern aircraft production.
In addition, there are few substitutes available in the short-term for
these raw materials.
Export restrictions are applied to many of the metals and minerals under
examination. Three case studies illustrate their impacts on exports and
on global supply. A number of insights regarding the impact of export
restrictions can be gleaned from these case studies:
Many export restrictions are put into place for environmental reasons or
to preserve natural resources. In order for them to satisfy this
objective, however, they must result in lower production levels. In one
case study, molybdenum, it can be seen that this was not the outcome of
the imposition of export restrictions.
As many of these raw materials are produced in a limited number of
countries, export restrictions that are imposed in one country may
motivate other countries to follow if importers massively move to buy
their raw materials. The restrictions imposed by the first country then
lose their effectiveness in limiting exports. This can in principle lead
to a situation of competitive policy practices – and of higher and
higher export taxes. This risk was apparent in one of the cases under
examination, namely exports of chromite.
Export restrictions can impact potential investments in mining
facilities worldwide. In the case of rare earths, the possibility of
export restrictions being imposed makes industry participants assess the
risk in the industry differently. Investments in the mining industry,
which are necessarily long-term and require large amounts of capital and
know-how, may be affected by the possibility of sharp changes in world
prices either due to the imposition of export restrictions or to their
Several objectives motivate implementing export restrictions on
strategic raw materials. In some cases, these can be understood as a
response to market imperfections. The question remains, however, whether
export restrictions are the most effective tool to achieve the desired
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