Electric vehicles are so unpopular that entire mines are closing

According to The Wall Street Journal, a slowdown in demand growth for electric vehicles (EVs) has caused entire mines to close as supply of rare earth minerals essential to electric vehicle components outstrips demand.

Mines around the world are halting operations or building projects in response to falling demand, such as a $1.3 billion plant in North Carolina operated by Albemarle. which announced it was postponing spending on the project amid market turmoil, seconds in the WSJ The total market To share of electric vehicles rose from 3.1% in January 2023 to 3.6% in December 2023, while the share of US vehicle inventory grew from 2.8% to 5.7% in this same period of time, as demand cannot keep up with supply.

In recent years, global mineral producers have ramped up mining operations in an attempt to capitalize on the emerging electric vehicle market, but consumers have refused to adopt electric vehicles at the rate producers had hoped, causing minerals to rare ones flood the market and lower prices. , according to the WSJ. The metals market is often subject to boom and bust cycles due to unpredictable demand and the slow speed at which mines can be brought into operation.

The price of lithium has fallen about 90% since the beginning of last year, and the price of nickel has halved in that same time period, according to the WSJ. A mine on the French Pacific island of New Caledonia recently suspended operations, despite providing more than 6% of the world's nickel supply.

A struggle to secure strategic minerals such as copper, cobalt, lithium and nickel could add to price pressure and increase the cost of the climate transition, IMF economists write in the latest issue of F&D. https://t.co/X72oppqbAe pic.twitter.com/hoqLoenEdb

— IMF (@IMFNews) February 17, 2024

The drop in mineral demand is particularly severe for the mining industry and the wider Australian economy, as the country's government recently designated nickel as a critical mineral to give corporations access to government subsidies in order to 'stimulus to companies in difficulty, according to the WSJ. . The collapse in mineral prices has led to the loss of more than a fifth of Australia's mine supply.

china controls about 87% of the world's rare earth mineral refining capacity, leading the US to try to subsidize projects outside of China to secure access to resources. The Biden administration has included provisions in tax credits for electric vehicles that require a certain percentage of minerals not to come from a foreign entity of interest such as China to be eligible.

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