The race for so-called critical and strategic minerals is set to intensify with booming demand from a “green and digital” economy, and likely increase resources nationalism, analysts said on Wednesday.

According to Fitch Solutions’ analysts, demand for raw materials supporting the development of batteries, fuel cells and renewables technology should trigger government intervention, Kallanish notes.

“Suppliers will position themselves to benefit from the upcoming rise in demand of key materials, in particular the expected uptick in lithium,” say the analysts. As domestic political risk grows in the post-Covid-19 world, governments in emerging and developing markets are likely to see mining as a way to boost their local economy.

“The expected economic benefits could give rise to greater resource nationalism, which could ultimately deter international investment,” they warn.

Cobalt, rare earth elements and lithium are seen as the most critical materials for the future economy, followed by natural graphite. Copper and nickel are also important materials for the manufacturing of batteries, but their supply isn’t seen as much of an issue currently.

China, the world’s largest market for electric vehicles, leads the lithium value-added processing chain. According to analyst Carly Cassidy, the Asian giant holds a 20% share of upstream (mining) in the global lithium-ion battery supply chain, but around 80% of the midstream (chemical refining and cathodes and anodes), and some 72% of the world’s downstream capacity (lithium-ion and battery cells).

Europe is joining the races and ramping up efforts to localise its battery supply chain, while the US is working hard to deter China’s monopoly and increase its own control in most parts of the supply chain.