Recycling or Stockpiling? Country-Specific Strategies for Securing EV Battery Critical Minerals

Yitian Wang (), Joaquin Vespignani () and Russell Smyth ()
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Yitian Wang: Department of Economics, Monash University, Clayton, Australia, https://research.monash.edu/en/organisations/department-of-economics
Joaquin Vespignani: Tasmanian School of Business & Economics, University of Tasmania, https://discover.utas.edu.au/Joaquin.Vespignani
Russell Smyth: Department of Economics, Monash University, Clayton, Australia, https://research.monash.edu/en/persons/russell-smyth

No 2025-08, Working Papers from University of Tasmania, Tasmanian School of Business and Economics

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.

Keywords: economics; finance; energy economics (search for similar items in EconPapers)
Pages: 62 pages
Date: 2025
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Published by the University of Tasmania. Discussion paper 2025-08

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