Stockpiling or Recycling? Country-Specific Strategies for EV Battery Mineral Security

Wang, Yitian and Vespignani, Joaquin and Smyth, Russell (2025): Stockpiling or Recycling? Country-Specific Strategies for EV Battery Mineral Security.

Abstract

Accelerating transport electrification is vital for net-zero goals, yet remains hindered by slow, uncertain development of battery minerals. We show how non-technical risk, such as policy, regulatory, social, and geopolitical risk, inflate capital costs, delay greenfield supply, and heighten price volatility for lithium, cobalt, nickel, manganese, graphite, and copper. Combining Fraser Institute investment scores with reserve shares of these critical minerals, we construct dynamic, mineral-specific risk premiums, derive an optimal stockpiling rule balancing risk and storage costs and introduce a distance-to-iso-cost map comparing recycling and stockpiling strategies. Our framework suggests that in 2040 recycling-led stabilization will be the optimal strategy for mitigating non-technical risk for Japan and Korea, strategic stockpiling will be the optimal strategy for China and the United States, and mixed outcomes for Europe. The method that we propose provides a tractable and updateable toolkit for deciding optimal stockpiles and prioritising recycling where it is most cost-effective.

• Item Type: MPRA Paper
• Language: English
• Keywords: Critical Mineral, EV Battery, Stockpiling, Recycling
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary Products; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q34 - Natural Resources and Domestic and International Conflicts; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q38 - Government Policy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q41 - Demand and Supply ; Prices

References

American Battery Technology Company. (2022). ABTC Accepts Presidential Challenge to Secure Domestic Supply of Critical and Strategic Battery Metals. Available at: https://americanbatterytechnology.com/abtc-accepts-presidential-challenge-to-secure-domestic-supply-of-critical-and-strategic-battery-metals/ (Accessed: 13 September 2025).

Andrade, L. B., Frenzel, M., Bookhagen, B., Kresse, C., Schmidt, M., Nassar, N., ... & Sandmann, D. (2024). From exploration to production: Understanding the development dynamics of lithium mining projects. Resources Policy, 99, 105423.

Australian Trade and Investment Commission. (2024). Why Australia benchmark report 2024. Available at: https://international.austrade.gov.au/content/dam/austrade-assets/international/documents/reports/benchmark-report/atic-benchmark-report-2024.pdf (Accessed: 13 September 2025).

Avocet Electrofoils. (2024). Understanding battery copper foil: Uses & key properties. Avocet Electrofoils. Available at: https://www.batteryfoil.com/understanding-battery-copper-foil-uses-key-properties/ (Accessed: 13 September 2025).

Azevedo, M., Baczynska, M., Bingoto, P., Callaway, G., Hoffman, K., & Ramsbottom, O. (2022). The raw-materials challenge: How the metals and mining sector will be at the core of enabling the energy transition. McKinsey & Company. Available at: https://www.mckinsey.com/industries/metals-and-mining/our-insights/the-raw-materials-challenge-how-the-metals-and-mining-sector-will-be-at-the-core-of-enabling-the-energy-transition (Accessed: 13 September 2025).

Balyaminu, J., Mphambukeli, T., & Magande, T. (2025). Regime Complexities in the Political Economy of Cobalt Mining in the DRC. In URBAN INNOVATION: TO BOLDLY GO WHERE NO CITIES HAVE GONE BEFORE. Medium sized cities and towns as a major arena of global urbanisation. Proceedings of REAL CORP 2025, 30th Intl. Conference on Urban Development, Regional Planning and Information Society (pp. 775-783). CORP–Competence Center of Urban and Regional Planning.

Bullock, R. L., & Mernitz, S. (2017). Mineral property evaluation: Handbook for feasibility studies and due diligence. Society for Mining, Metallurgy & Exploration.

Burnley, C. (2011). Natural resources conflict in the Democratic Republic of the Congo: a question of governance. Sustainable Dev. L. & Pol'y, 12, 7.

Castiglioni, R. (2022). Social policies, uncertainty and social unrest in Chile. In Social Revolt in Chile (pp. 69-84). Routledge.

Cerda, R., Silva, Á., & Valente, J. T. (2016). Economic policy uncertainty indices for Chile. Economic Policy Uncertainty working paper.

Cobalt Institute. (2021). ‘State of the Cobalt market’ report. Cobalt Institute. Available at: https://www.cobaltinstitute.org/wp-content/uploads/2021/09/Cobalt-Institute-State-of-the-Cobalt-Market-Report_2020.pdf (Accessed: 13 September 2025).

Deloitte Global. (2025). Tracking the trends 2025: Top 10 trends shaping the mining and metals sector. Deloitte. Available at: https://www.deloitte.com/global/en/Industries/mining-metals/research/tracking-the-trends.html (Accessed: 13 September 2025).

Denisova, T. S., & Kostelyanets, S. V. (2023). The Democratic Republic of the Congo: Political instability and the Rwandan factor. Vestnik RUDN. International Relations, 23(1), 37-47.

Ellis, I. (2020). DR Congo border closure and lockdowns to ravage copper and cobalt output. Verisk Maplecroft. Available at: https://www.maplecroft.com/insights/analysis/dr-congo-border-closure-and-lockdowns-to-ravage-copper-and-cobalt-output/ (Accessed: 13 September 2025).

Fortune Business Insights. (2024). Graphite mining market size, share, and industry analysis by mining type (open-pit and underground), by grade (crystalline and microcrystalline), and regional forecast, 2025–2032. Fortune Business Insights. Available at: https://www.fortunebusinessinsights.com/graphite-mining-market-109424 (Accessed: 13 September 2025).

Heijlen, W., Franceschi, G., Duhayon, C., & Van Nijen, K. (2021). Assessing the adequacy of the global land-based mine development pipeline in the light of future high-demand scenarios: The case of the battery-metals nickel (Ni) and cobalt (Co). Resources Policy, 73, 102202.

Horn, S., Gunn, A. G., Petavratzi, E., Shaw, R. A., Eilu, P., Törmänen, T., ... and Wall, F. (2021). Cobalt resources in Europe and the potential for new discoveries. Ore Geology Reviews, 130, 103915.

IEA. (2021a). The Role of Critical Minerals in Clean Energy Transitions. IEA. Available at: https://www.iea.org/policies/16084-prohibition-of-the-export-of-nickel-ore (Accessed: 13 September 2025).

IEA. (2021b). Total nickel demand by sector and scenario, 2020-2040. IEA. Available at: https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions/reliable-supply-of-minerals (Accessed: 13 September 2025).

IEA. (2022). Introducing the Critical Minerals Policy Tracker. IEA. Available at: https://www.iea.org/reports/introducing-the-critical-minerals-policy-tracker (Accessed: 15 October 2025).

IEA. (2024a). Recycling of Critical Minerals – Executive summary. Paris: International Energy Agency. Available at: https://www.iea.org/reports/recycling-of-critical-minerals (Accessed: 13 September 2025).

IEA. (2024b). Global EV Outlook 2024 – Outlook for battery and energy demand. Paris: International Energy Agency. Available at: https://www.iea.org/reports/global-ev-outlook-2024/outlook-for-battery-and-energy-demand (Accessed: 13 September 2025).

IEA. (2025a). EV Battery Supply Chain Sustainability. Paris: International Energy Agency. Available at: https://www.iea.org/reports/ev-battery-supply-chain-sustainability (Accessed: 13 September 2025).

IEA. (2025b). Global Critical Minerals Outlook 2025. International Energy Agency. Available at: https://www.iea.org/reports/global-critical-minerals-outlook-2025 (Accessed: 13 September 2025).

IEA. (2025c). Global EV Outlook 2025. International Energy Agency. Available at: https://www.iea.org/reports/global-ev-outlook-2025 (Accessed: 21 September 2025).

Jacks, D. S., O'rourke, K. H., & Williamson, J. G. (2011). Commodity price volatility and world market integration since 1700. Review of economics and statistics, 93(3), 800-813.

Jones, B., Nguyen‐Tien, V., & Elliott, R. J. (2023). The electric vehicle revolution: Critical material supply chains, trade and development. The World Economy, 46(1), 2-26.

Jupiter Mines Limited. (2012). Investor Presentation. Jupiter Mines Limited. Available at: https://www.jupitermines.com/cproot/48/3/jupiter---neiha.pdf (Accessed: 15 October 2025).

Kang, W., Smyth, R. and Vespignani, J. (2025) The Macroeconomic Fragility of Critical Mineral Markets. Working paper.

Kelly, J. (2025). Miners warn only one in five major projects reaches completion. Hancock Prospecting. Available at: https://www.hancockprospecting.com.au/miners-warn-only-one-in-five-major-projects-reaches-completion (Accessed: 13 September 2025).

Khan, T. S., Nguyen, T. T. T., Schodde, R., & Ohnsorge, F. (2016). From commodity discovery to production. World Bank Policy Research Working Paper, (7823).

Mack, J. (2025). Mining shocks: A look at key disruptions. White Noise Communications. Available at: https://whitenoisecomms.com/insights/mining-shocks-a-look-at-key-disruptions/ (Accessed: 13 September 2025).

Manalo, P. (2023). Discovery to production averages 15.7 years for 127 mines. S&P Global Market Intelligence. Available at: https://www.spglobal.com/market-intelligence/en/news-insights/research/discovery-to-production-averages-15-7-years-for-127-mines (Accessed: 13 September 2025).

Manalo, P. (2024). Average lead time almost 18 years for mines started in 2020–23. S&P Global Market Intelligence. Available at: https://www.spglobal.com/market-intelligence/en/news-insights/research/average-lead-time-almost-18-years-for-mines-started-in-2020-23 (Accessed: 13 September 2025).

Manalo, P. (2025). From 6 years to 18 years: The increasing trend of mine lead times. S&P Global Market Intelligence. Available at: https://www.capitaliq.spglobal.com/apisv3/spg-webplatform-core/news/article?id=88321260&redirected=1 (Accessed: 13 September 2025).

Mathieu, L., & Mattea, C. (2021). From dirty oil to clean batteries. Transport & Environment. Available at: https://www.transportenvironment.org/uploads/files/2021_02_Battery_raw_materials_report_final.pdf (Accessed: 13 September 2025).

Mejía, J., & Aliakbari, E. (2023). Annual survey of mining companies, 2022. Fraser Institute. Available at: https://www.fraserinstitute.org/sites/default/files/annual-survey-of-mining-companies-2022.pdf (Accessed: 13 September 2025).

Mejía, J., & Aliakbari, E. (2025). Fraser Institute annual survey of mining companies 2024. Available at: Fraser Institute. http://www.fraserinstitute.org (Accessed: 13 September 2025).

Mitchell, P. (2024). Top 10 business risks and opportunities for mining and metals in 2025. EY. Available at: https://www.ey.com/en_gl/insights/energy-resources/risks-opportunities (Accessed: 13 September 2025).

National Mining Agency. (2023). RAL Guide 2023 - ANM. National Mining Agency. Available at: https://www.gov.br/anm/pt-br/ral-2023-traz-mudancas-na-declaracao-de-recursos-e-reservas-minerais/guia-ral-2023-anm.pdf/view (Accessed: 13 September 2025).

NextSource Materials. (2025). NextSource Materials Provides Quarterly Update and Announces Progress on Molo Mine Expansion Study and Battery Anode Facility Strategy. NextSource Materials. Available at: https://www.nextsourcematerials.com/nextsource-materials-provides-quarterly-update-and-announces-progress-on-molo-mine-expansion-study-and-battery-anode-facility-strategy/ (Accessed: 15 October 2025).

NextSource Materials. (n.d.). Energizer Resources Outlines 2013 Strategies and Timelines for Molo Mine Development. NextSource Materials. Available at: https://www.nextsourcematerials.com/energizer-resources-outlines-2013-strategies-and-timelines-for-molo-mine-development/ (Accessed: 13 September 2025).

NREL. (2025). Battery Recycling Supply Chain Analysis. National Renewable Energy Laboratory. Available at: https://www.nrel.gov/transportation/battery-recycling-supply-chain-analysis (Accessed: 13 September 2025).

Reid, H., & Holland, H. (2020). DRC: Mining minister warns against the social and economic impact of mine closures during the COVID-19 pandemic. Business & Human Rights Resource Centre. Available at: https://www.business-humanrights.org/en/latest-news/drc-mining-minister-warns-against-the-social-and-economic-impact-of-mine-closures-during-the-covid-19-pandemic/ (Accessed: 13 September 2025).

Renaud, M., & Kumral, M. (2021). Out of the Comfort Zone: Quantifying Country Risk for Foreign Mining Project Investment Feasibilities. Mining, Metallurgy & Exploration, 38(6), 2323-2335.

Robin, R. J. (2024). Viability and Eco-consequences of synthetic and natural graphite for Li-ion battery anodes in the US. IEEE Engineering Management Review.

Schandl, H., Walton, A., Okelo, W., Kong, T., Boxall, N. J., Terhorst, A., & Porter, N. B. (2023). Australia’s comparative and competitive advantages in transitioning to a circular economy. A Report to the Office of the Chief Scientist.

Stedman, A., & Green, K. P. (2018). Fraser Institute Annual Survey of Mining Companies 2017. Fraser Institute. Available at: http://www.fraserinstitute.org (Accessed: 13 September 2025).

Tilton, J. E., & Guzmán, J. I. (2016). Mineral economics and policy. Routledge.

Trench, A., Packey, D., & Sykes, J. P. (2014). Non-technical risks and their impact on the mining industry. Mineral Resource and Ore Reserve Estimation, 605-618.

Vespignani, J., & Smyth, R. (2024). Artificial intelligence investments reduce risks to critical mineral supply. Nature Communications, 15(1), 7304.

Wu, S. (2025). How long do electric car batteries last? ConsumerAffairs. Available at: https://www.consumeraffairs.com/automotive/how-long-do-electric-car-batteries-last.html (Accessed: 30 October 2025).

Zadeh, J. (2025). Understanding the Time Delay Between Mining Discovery and Development. Discovery Alert. Available at: https://discoveryalert.com.au/news/widening-gap-discovery-development-mining-2025/ (Accessed: 13 September 2025).

Zhao, L., Ding, B., Qin, X. Y., Wang, Z., Lv, W., He, Y. B., ... & Kang, F. (2022). Revisiting the roles of natural graphite in ongoing lithium‐ion batteries. Advanced Materials, 34(18), 2106704.