On the Unintended Consequences of Critical Mineral Bans: The Exploration Channel

Rabah Arezki () and Frederick van der Ploeg
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Rabah Arezki: FERDI - Fondation pour les Etudes et Recherches sur le Développement International, CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne, Harvard Kennedy School
Frederick van der Ploeg: University of Oxford

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Abstract: Critical mineral maps portray known resource endowments as fixed geographic facts, yet the resource base is endogenous to both demand conditions and institutional factors. The prevailing framing of critical mineral scarcity ignores the extent to which resources are discovered only when it is profitable to do so. Using a two-region model of endogenous reserves, we show that exploration investment and discovered reserves respond to global demand shocks, world resource prices, and the institutional environment facing international resource companies, including explicit and implicit taxes on exploration and on exports, including export bans and restrictive trade measures in pursuit of value-chain upgrading. While export bans may be attractive as industrial policy, they risk being self-defeating: by discouraging exploration investment, they reduce the very resource base on which industrial ambitions depend. We document the global proliferation of export restrictions on critical minerals and discuss the policy implications for developing countries navigating the twin pressures of resource nationalism and the green transition.

Keywords: critical minerals; endogenous resources; exploration investment; export ban; resource nationalism; green transition; developing countries (search for similar items in EconPapers)
Date: 2026-07-29
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