2020/111 K NKONW A A WELDEGDEG E OL N ONTOET E S ESREI R E ISE S F OFRO R P R&A C T HTEH E NEENREGRYG Y ETX ITCREA C T I V E S G L O B A L P R A C T I C E THE BOTTOM LINE Africa’s Resource Export Opportunities and the Sub-Saharan Africa has vast non-fuel mineral resources that in Global Energy Transition some countries constitute major shares of their gross domestic product. The region also contains How might clean energy technologies change Africa’s We focus here on so-called “mineral energy materials” (MEMs) such as cobalt, nickel, and copper that are expected to play an large oil and natural gas resources, resource export markets? important role in the energy transition. MEMs and associated prod- which have been reliable sources The natural resources needed for renewable energy ucts (23 percent), together with hydrocarbons (48.5 percent), made of revenue for decades. The region as a whole may be able to technologies may replace hydrocarbons … eventually up more than 70 percent of the value of SSA’s exports to the rest of the world between 1995 and 2018. Exports of crude oil, natural gas, prosper from the global shift from Sustainable Development Goal 7 aims for universal access to afford- and metals accounted, on average, for 25 percent of government oil and gas to renewable energy, able, reliable, clean, and modern energy. Achieving the goal requires revenues in the region in 2014 (figure 1). Major oil producers include but individual countries will feel urgent action on climate change that could radically transform the Angola, Cameroon, and Nigeria; significant potential future produc- the impact of the shift in different global energy system. This transformation is expected to increase the ers of natural gas include Mauritania, Mozambique, Senegal, and ways. To predict how these impacts demand for certain materials required in clean energy technologies Tanzania. The main importers of the region’s energy resources (both may be felt—and what can be and may have a dramatic effect on mineral-exporting countries. MEMs and hydrocarbons) include China, the European Economic done to strengthen opportunities Meanwhile, likely reductions in the use of coal, oil, and natural gas Area, Japan, India, and the United States. for export—estimates of trade would affect countries with large hydrocarbon reserves. This Live The export structure of MEMs and hydrocarbons has changed elasticities of hydrocarbons and Wire examines the potential impacts of the energy transition on markedly over the past two decades, both in absolute terms and nonhydrocarbon metals and mineral- and hydrocarbon-rich economies in Sub-Saharan Africa across trading partners. While hydrocarbon products remain the minerals provide a guide. (SSA) over the coming decade. largest source of SSA’s exports to other regions, their value has fallen sharply in recent years (figure 2, left panel). By contrast, the value of MEM exports (figure 2, right panel) has risen steadily, growing Clara Galeazzi is a consultant in the Jevgenijs Steinbuks is an economist in the seven-fold since 1995. The export destinations have also changed Development Research Group at the World Development Research Group at the World over time. While the European Economic Area is a consistently large Bank and a PhD student in the Centre for Bank. importer, since 2009 China has come to play a large and growing role Environment, Energy, and Natural Resource in MEM imports. Governance, Department of Land Economy, Factors other than trade links are shaping the trade patterns of University of Cambridge. James Cust is an economist in the Office of the Chief Economist for the Africa Region at the resource-rich SSA countries. These include difficult access to ports World Bank. 2 A f r i c a’ s R e s o u r c e E x p o r t O p p o r t u n i t i e s a n d t h e G l o b a l E n e r g y T r a n s i t i o n Figure 1. Natural resource exports as a percentage of government revenue for selected SSA countries, 2014 Countries whose hydrocarbon earnings exceed those from MEMs are highlighted in blue 100 90 80 While hydrocarbon 70 products remain the largest 60 source of SSA’s exports to percent 50 other regions, their value 40 has fallen sharply in recent 30 years, while the value of 20 non-fuel mineral exports 10 0 has risen steadily. a la e n n a li n ia e ire a so ia r ia o s s a tiu lle Ma ine an an vill iqu bo da roo g go mb n iop sc Fa To vo za he tsw Gh uri Su Ga zza An Gu ga mb me Eth Za d’I n na yc Ma Ta da Bra Bo za ial rki Ca te Se Ma Mo tor Cô Bu o— ua ng Eq Co Source: Natural Resource Revenue Dataset (February 2020 version) of the Natural Resource Governance Institute (NRGI), contributed by the International Monetary Fund, the International Centre for Tax and Development (ICTD), and the Extractive Industries Transparency Initiative (EITI). NRGI defines “natural resources‚“ as oil, natural gas, and products of mining activities. To reduce measurement error, we averaged the available estimates of all revenue contributors in each country for 2014. Figure 2. Export structure of SSA hydrocarbons and mineral energy materials, 1995–2018, by main importers (left axis applies to bars; right axis, solid line) Selected nonhydrocarbon mineral energy materials, their refined metals, Oil and gas and chemicals 300 600 900 1.2 800 250 500 1.0 700 USD trillions USD billions USD billions USD billions 200 400 600 0.8 500 150 300 0.6 400 100 200 300 0.4 200 50 100 0.2 100 0 0 0 0 1995–98 1999–2003 2004–08 2009–13 2014–18 1995–98 1999–2003 2004–08 2009–13 2014–18 CHN EUN IND JPN USA World aggregate (right axis) CHN EUN IND JPN USA World aggregate (right axis) Source: UN Comtrade Harmonized System Code using classification version from 1992 (HS 92); cleaned for errors; reported free-on-board by the Centre for Prospective Studies and International Information; and published in the CEPII international trade database at the product level (2020). Note: The HS chapters used for these figures are detailed in the methodological note at the end of this Live Wire. All values are in 2018 U.S. dollars. 3 A f r i c a’ s R e s o u r c e E x p o r t O p p o r t u n i t i e s a n d t h e G l o b a l E n e r g y T r a n s i t i o n for landlocked countries, internal social issues, underdeveloped will be little changed if the price of those exports rises. By contrast, financial sectors, and volatility of prices for both MEMs and hydrocar- the relationship between price and supply is positive. A high price bons (van der Ploeg and Poelhekke 2009; Renner and Wellmer 2019). elasticity of export supply (that is, one farther from zero) indicates The COVID-19 pandemic, too, is having a substantial effect on that a country can boost commodity exports when prices increase. prices and exports. Following the outbreak, average yearly forecasts Therefore, from the exporter’s perspective, the best combination is A low price elasticity of of Brent oil prices were revised downward from $62.7 to $39.0 a bar- a low import demand price elasticity and a high export supply price import demand for a given rel in April 2020, and nickel prices were revised downward from $6.2 elasticity relative to other exporting countries. to $5.7 a pound that same month (S&P Global Market Intelligence). To analyze SSA’s export attractiveness for its main importers, commodity implies that However, not all MEM prices have fallen sharply. we assessed price elasticities for SSA’s export supply and import prices have a small impact Mining company operations have been interrupted by viral demand over 1995–2018 for the main importers identified above. on export demand from a outbreaks and government-mandated shutdowns in key exporting Figure 3 plots the differences of the export supply and import given country. A high price countries (Deloitte 2020). South Africa’s lockdown, for example, demand price elasticities for the region relative to the rest of the temporarily disrupted 75 percent of the global output of platinum, world. The elasticities are calculated in terms of differences between elasticity of export supply a key material in many clean energy technologies and emissions elasticities for all countries in the world except for SSA, and all indicates that a country control devices. The country later allowed mines to operate, but due countries in the world including SSA. For the rationale behind this can boost commodity to social distancing, some ran at 50 percent capacity (IEA 2020). approach and details of the calculations, see the methodological exports when prices The Democratic Republic of Congo has experienced an even note at the end of this brief. greater shock from the shutdown of the Mutanda cobalt mine The size of the bubbles allows us, in addition, to gauge the increase. owing to an unreliable supply of sulfuric acid, a key input for cobalt importance of SSA exports to the main importers. (MEMs are shown extraction (Reuters 2019), accompanied by reduced demand for its in red, hydrocarbons in purple.) The price elasticity of export supply exports owing to COVID-19. Mining companies in Zambia, Africa’s is positive by definition. A negative value on the y-axis indicates second-largest copper producer, suffered a 30 percent revenue that adding SSA to the sample increases the elasticity of supply, drop during the first three months of the COVID-19 pandemic. The an advantage for SSA exporters. Recall that the price elasticity of Zambia Chamber of Mines expects the fallout could last for at least import demand is negative by definition. A negative value on the 12 months (Reuters 2020). x-axis suggests that adding SSA to the sample brings the elasticity of demand closer to zero (and a lower absolute value), which is also an Why is it important to understand trade elasticities of advantage for SSA exporters. On the opposite side, positive values on both axes of figure 3 suggest that SSA has relatively lower export prices and demand? supply and relatively higher import demand price elasticities than the Trade elasticities provide insights into the relative rest of the world, a disadvantage for SSA exporters. responsiveness of demand and supply The results suggest that, among MEMs: • Nickel, salt, sulfur, and graphite exports from the region have a Elasticity is an important concept in economics. It measures the per- relative advantage in terms of elasticity of export supply and a centage change of one economic variable in response to a change in relative disadvantage in terms of elasticity of import demand, another. In this study, we analyze how the quantity of traded natural compared with exports from elsewhere in the world. This means resources responds to changes in their prices. exports can respond relatively more on the supply side, while The relationship between price and import demand is negative importer demand is relatively more responsive to a given change by definition. That is why, when the price elasticity of import demand in prices. is close to zero (or has a low absolute value) a country’s exports 4 A f r i c a’ s R e s o u r c e E x p o r t O p p o r t u n i t i e s a n d t h e G l o b a l E n e r g y T r a n s i t i o n • Platinum group metals and copper exports from SSA have a • Ores and concentrates exports from the region have a relative relative advantage in terms of elasticity of import demand and disadvantage in terms of both import demand and export supply a relative disadvantage in terms of elasticity of export supply elasticities. compared with the exports from elsewhere in the world. • As for hydrocarbon exports, compared with exports from the rest • Inorganic chemicals, including rare-earth metals, have a relative of the world, SSA has a relative advantage in terms of elasticity of Over recent decades the advantage in terms of both import demand and export supply import demand and a relative disadvantage in terms of elasticity share of primary exports elasticities. of export supply. from SSA to the leading MEM importer, China, has Figure 3. Export supply and import demand elasticities of SSA exporters to main importers, relative to rest of world, by chapter of the soared for all major primary Harmonized System commodity categories, except for ores and metals. Worse for supplier 20 Import demand advantage, Import demand disadvantage, Export supply disadvantage Export supply disadvantage Better for supplier 15 Oil & gas Export supply elasticity 10 5 Platinum group metals Copper & articles thereof 0 Ores/concentrates, etc. -5 -4 -3 -2 -1 0 1 2 3 Salt; sulfur; graphite Nickel & articles thereof -5 Inorganic chemicals, compounds of precious metals, Import demand advantage, Import demand disadvantage, incl. REE Export supply advantage Export supply advantage -10 Import demand elasticity Source: UN Comtrade Harmonized System Code using classification version from 1992 (HS 92); cleaned for errors; reported free-on-board by the Centre for Prospective Studies and International Information; and published in the CEPII international trade database at the product level (2020). Elasticity calculations based on authors’ modification of Broda and Weinstein (2006) and Soderbery (2015). Note: For details pertaining to the Harmonized System (HS), see the methodological note at the end of this brief. 5 A f r i c a’ s R e s o u r c e E x p o r t O p p o r t u n i t i e s a n d t h e G l o b a l E n e r g y T r a n s i t i o n What can trade elasticities tell us about export extent than the rest of the world. On the other, the SSA’s exports of metal ores are less able to take advantage of improving market prospects for the region’s resources? conditions compared with those of other exporters in terms of trade Elasticity estimates indicate that for some MEM’s elasticities. (such as rare-earth metals and inorganic chemicals), To analyze how the global energy transition might affect the The COVID-19 pandemic SSA is relatively well positioned, compared with the export value of major SSA resources, we estimated trade elasticities has drastically altered the for several commodities at a more disaggregated level, and applied rest of the world, to meet the growing demand the calculated elasticities to existing price forecasts. The analysis was demand for and price of They also suggest that the region’s exports of hydrocarbons, such done for oil, cobalt, nickel, and copper (figures 4–7). The selection crude oil, the main export as crude oil and natural gas, along with platinum group metals and of commodities was based on availability of price forecasts and the commodity of the region. copper, are relatively less responsive than other MEMs to import importance of trade for SSA. For instance, figure 7 focuses on copper Prices are not expected to price fluctuations. On the one hand, the estimates mean that falling cathodes (HS 7405) both because these are important for SSA and hydrocarbon prices may affect SSA export revenues to a lesser because there are sufficient data to estimate elasticities for them. regain pre-COVID-19 levels until 2026. Figure 4. Forecast factors of hydrocarbon exports Oil, % of total SSA trade (solid line; left axis), % of total world Oil (Brent), price forecast, 2018=100 Crude oil, estimated SSA export value in current USD, price trade in oil (dashed line; right axis) elasticity of demand effect (blue) and other factors (gray) 60 14 110 200 12 100 150 50 Market clearing value 10 90 100 40 USD billions 8 80 50 30 6 70 0 20 4 60 -50 Crude oil—Brent 10 Oil, % of total SSA trade 2 Crude oil—Brent (pre-COVID) % of total world trade in oil/gas 50 -100 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: UN Comtrade Harmonized System Code using classification version from 1992 (HS 92); cleaned for errors; reported free-on-board by the Centre for Prospective Studies and International Information; and published in the CEPII international trade database at the product level (2020). Price forecasts are from S&P Global Market Intelligence. Elasticity calculations are based on authors’ modification of Broda and Weinstein (2006) and Soderbery (2015). Note: We were not able to calculate elasticities for all major importers. India and the United States are missing from this data. 6 A f r i c a’ s R e s o u r c e E x p o r t O p p o r t u n i t i e s a n d t h e G l o b a l E n e r g y T r a n s i t i o n Each figure has three columns presenting the following data: pre-COVID-19 levels until 2026, while ranging from 54 to 91.5 index • The importance of SSA in world trade for that product, and the points over the period 2019–28. The positive effect of effect of lower importance of the product in total SSA trade prices on demand in 2020 exceeds negative price effects on supply • The price forecast for the commodity, according to S&P Global and other factors, and the market clears at about $75 billion. But Market Intelligence the future growth of oil export revenues in Africa is expected to be • The export value forecast for the product, accounting separately modestly positive in the coming decade. for the price effect (based on the estimated import demand Cobalt prices are expected to make a modest recovery after elasticities and the price forecasts), and the effect of other the 2019 collapse (figure 5). The positive effect of elasticity of import factors, such as income and technological change. demand owing to the price shock of 2019–20 is notable in the near term but is expected to diminish when compared with other factors, The COVID-19 pandemic has drastically altered the demand for such as increasingly greater demand for energy storage in transport, and price of crude oil, the main export commodity of the region power, and consumer electronics. This creates an opportunity for (which constituted about 30 percent of its total trade value in 2018). future export revenue growth for the region’s cobalt exporters, As of the date of this analysis, prices were not expected to regain particularly the Democratic Republic of Congo. Figure 5. Forecast factors of cobalt exports Cobalt ores (red) and metal (green), % of total SSA trade Cobalt, price forecast, 2018=100 Cobalt ores, estimated SSA export value in current USD, price (solid line; left axis), % of total world trade in cobalt elasticity of demand effect (blue) and other factors (gray) (dashed line; right axis) 110 25 1.4 100 90 100 1.2 20 80 90 1.0 Cobalt ores, % of total SSA trade 70 Cobalt metal, % of total SSA trade 15 80 USD billions % of total world trade in cobalt ores 60 0.8 % of total world trade in cobalt metal 50 70 10 0.6 40 60 0.4 30 5 50 20 0.2 10 40 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 -5 Source: UN Comtrade Harmonized System Code using classification version from 1992 (HS 92); cleaned for errors; reported free-on-board by the Centre for Prospective Studies and International Information; and published in the CEPII international trade database at the product level (2020). Price forecasts are from S&P Global Market Intelligence. Elasticity calculations are based on authors’ modification of Broda and Weinstein (2006) and Soderbery (2015). 7 A f r i c a’ s R e s o u r c e E x p o r t O p p o r t u n i t i e s a n d t h e G l o b a l E n e r g y T r a n s i t i o n As with other MEMs, nickel price forecasts (figure 6) have been term contributes a larger portion of the market-clearing value for revised downward through about 2026 owing to the COVID-19 copper than for nickel, suggesting that other factors may affect pandemic. The effect of the pandemic on price forecasts is, however, the growth of the SSA nickel market. This should benefit major SSA less severe in comparison with oil. Between 2019 and 2029, prices exporters, such as Zimbabwe and Côte d’Ivoire, since the export are expected to rise by 94 to 139 index points for nickel. The corre- supply elasticity is relatively high for these commodities in Africa. sponding figures for copper are 91 to 130.5 index points (figure 7). It also means that African producers have shown their ability to The positive effect of import price elasticity of demand in the near expand export supply in response to global macroeconomic factors. Figure 6. Forecast factors of nickel exports Unwrought nickel, % of total SSA trade (solid line, left axis), Nickel, price forecast, 2018=100 Nickel, unwrought/not alloyed, estimated SSA export value % of total world trade in good (dashed line, right axis) in current USD, price elasticity of demand effect (blue) and other factors (gray) 0.45 9 150 1.8 Unwrought nickel, % of total SSA trade 0.40 8 1.6 % of total world trade in good 140 0.35 7 1.4 130 1.2 0.30 6 USD billions 1.0 0.25 5 120 0.8 0.20 4 110 0.6 0.15 3 0.4 0.10 2 100 Nickel—cash official 0.2 0.05 1 Nickel—cash official (pre-COVID) 90 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: UN Comtrade Harmonized System Code using classification version from 1992 (HS 92); cleaned for errors; reported free-on-board by the Centre for Prospective Studies and International Information; and published in the CEPII international trade database at the product level (2020). Price forecasts are from S&P Global Market Intelligence. Elasticity calculations are based on authors’ modification of Broda and Weinstein (2006) and Soderbery (2015). Note: We were not able to calculate elasticities for all major importers. China and the European Economic Area are missing from this data. 8 A f r i c a’ s R e s o u r c e E x p o r t O p p o r t u n i t i e s a n d t h e G l o b a l E n e r g y T r a n s i t i o n Figure 7. Forecast factors of copper exports Copper cathodes, % of total SSA trade (solid line, left axis), % Copper, price forecast, 2018=100 Copper cathodes, estimated SSA export value in current USD, of total world trade of good (dashed line, right axis) price elasticity of demand effect (blue), and other factors (gray) 4.5 25 135 18 4.0 130 16 20 125 14 3.5 120 12 3.0 USD billions 15 115 10 2.5 110 8 2.0 10 105 6 1.5 100 4 1.0 5 95 2 0.5 90 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: UN Comtrade Harmonized System Code using classification version from 1992 (HS 92); cleaned for errors; reported free-on-board by the Centre for Prospective Studies and International Information; and published in the CEPII international trade database at the product level (2020). Price forecasts are from S&P Global Market Intelligence. Elasticity calculations are based on authors’ modification of Broda and Weinstein (2006) and Soderbery (2015). What is the outlook? The elasticity results also suggest that SSA hydrocarbon pro- ducers face relatively low demand import elasticity compared with Countries with significant MEM reserves have an the rest of the world. This implies that there remains a potential for opportunity to expand their exports and capture hydrocarbons to remain a significant source of export revenues over the potential of the global energy transition and the the short to medium term. As global oil and gas demand may begin recovery from COVID-19 to decline permanently as the global energy transition progresses, SSA hydrocarbon producing countries will need to adapt to these Our trade elasticity analysis suggests that the region’s MEM new market conditions. For the moment, however, they still have exporters will have to become more export responsive in order to some time to manage an orderly transition away from fossil fuels. take advantage of anticipated rising demand from the global energy transition. 9 A f r i c a’ s R e s o u r c e E x p o r t O p p o r t u n i t i e s a n d t h e G l o b a l E n e r g y T r a n s i t i o n Methological note: Calculation of trade elasticities group metals), and metals clad with precious metal. Chapters 74 and 75 contain copper and nickel, and their articles thereof, respectively. Feenstra (1994) and Broda and Weinstein (2006) showed us how to Finally, Chapter 81 contains base metals not otherwise specified in compute demand and supply (import and export) trade elasticities. other HS chapters and their articles. They used customs data to track changes in the relative share The results in figure 3 are from estimating the model for each of goods over time and varieties (an exporter–good pair for each As global oil and gas importer country). major importer separately, and then weighing the results by each demand begins to decline importer’s share of trade in the group. This yields an overall trade We use the Stata codes provided by Soderbery (2015) for the elasticity for all major importers, by chapter of the Comtrade permanently with the calculation. The input to the STATA do-file consists of UN Comtrade Harmonized System. When it comes to extracting usable estimates data cleaned by CEPII and updated yearly. More details are available global energy transition, for a region as a whole, it is not possible to limit the input data to from CEPII. The model requires five input variables from customs SSA hydrocarbon data: trade year, product traded, exporter, quantity, and value. Each that region because, in a narrow sense, this would simply show how producing countries will an importer shifts its demand for a certain good from one exporter input file, and set of results, is for a given importer. to another when prices change. In our example, we would obtain need to adapt. For the Taking the narrowest possible interpretation of results, we intro- a measure of how China distributes its import demand among the moment, however, they still duced the five input variables for a certain country’s imports from SSA countries when prices change. We prefer to avoid the broad across the globe. This yields a measure of how China, for example, have some time to manage interpretation used above because the quantity of varieties is more shifts its demand for a certain good from one exporter to another an orderly transition away restricted in a regional sample. in response to price changes. On the supply side, the model yields a To obtain the desired interpretation of how the region’s exports from fossil fuels. measure of how exporters allocate their production to China among stand in comparison with the world’s exports, we compare the themselves when a good’s price changes. Therefore, the output model estimates of two samples. The first is for the world excluding is technically the constant elasticity of substitution (CES), though SSA; the second, for the entire world. The direction of the change Krugman (1980) shows that it becomes the trade demand elasticity between these two samples reveals whether the SSA countries have when the number of varieties is large. In this case, we are using all made importers more or less responsive. possible varieties available in real-world data. The estimation output consists of 11 variables, which include The data in figures 2 and those highlighted in figure 3 are from product, reference country, σ, and ω. We report the negative of σ the following chapters of the UN Comtrade Harmonized System Code using the 1992 classification (HS 92): chapters 25-28, 71, 74-75, and (CES import demand elasticity) and the inverse of ω (the CES export 81. Specifically, HS chapter 25 contains salt; sulfur; earths and stone; supply elasticity). As an added note for those well versed in the plastering materials, lime, and cement. Chapter 26 contains ores, slag literature, we make sure the outputs are comparable by choosing the and ash, and Chapter 27 contains hydrocarbons (oil, gas), mineral same reference country in both samples. oils and products of their distillation; bituminous substances; mineral In figures 4–7, we disaggregate estimates further by product, waxes. Chapter 28 contains inorganic chemicals and organic or inor- converting the CES trade elasticity for all main importers to the trade ganic compounds of precious metals, rare-earth metals, radioactive demand elasticities for the SSA products based on Ramskov and elements, or isotopes. Chapter 71 includes natural or cultured pearls, Munksgaard (2001). precious or semiprecious stones, precious metals (including platinum 10 A f r i c a’ s R e s o u r c e E x p o r t O p p o r t u n i t i e s a n d t h e G l o b a l E n e r g y T r a n s i t i o n MEMs chosen for analysis, with UN Comtrade Harmonized System codes Expected change, 2050 SSA share of world Commodity (percent) production (2017) Comtrade chapter (HS2) Comtrade good, (HS4 or HS6) 1 Cobalt +585 66.5 26, 28, 81 2605, 2822, 8105 2 Vanadium +173 15.7 26 261590 3 Graphite +383 2 25 2504 5 Lithium +965 1.6 28 282520, 283691 6 Manganese +2 49.44 26, 28 2602, 2820 7 Chromium — 51.12 26 2610, 2819, 8112 (various) 8 Nickel +108 6.16 75 75, various 9 Copper 7 10.21 74 74, various 10 Rhodium -46 86.31 71 711031, 711039 11 Platinum — 79.9 71 711011, 711019 12 Palladium — 44.3 71 711021, 711029 13 Crude oil — 5.2 27 2709 14 Natural gas — 1.8 27 2711 Source: La Porta and others (2017); UN Comtrade. Data on expected change for rhodium are from Bloomberg New Energy Finance (2019). Data on SSA percentage of world production are from Federal Ministry of Agriculture, Regions, and Tourism (2020). 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Ali, Morgan Bazilian, Ben Radley, Electricity Demand: An Aid for Feenstra, Robert. 1994. “New product varieties and the measurement Benoit Nemery, Julia Okatz, and Dustin Mulvaney. 2020. Practitioners,” by Jevgenijs Steinbuks, of international prices.” American Economic Review 84(1): Joeri de Wit, Artur Kochnakyan, and “Sustainable minerals and metals for a low-carbon future.” 157–77. Vivien Foster. Science 367(6473): 30–33. Hund, Kirsten, Daniele La Porta, Thao P . Fabregas, Tim Laing, and Van der Ploeg, Frederick, and Steven Poelhekke. 2009. “Volatility Live Wire 2017/78. “Minerals and John R. Drexhage. 2020. “Minerals for climate action: The mineral Metals to Meet the Needs of a and the natural resource curse.” Oxford Economic Papers 61(4): intensity of the clean energy transition.” Climate-Smart Mining Low-Carbon Economy,” by Kirsten 727–60. Lori Hund, Daniele La Porta, and John Facility. World Bank, Washington, DC. Wellmer, Friedrich W., Peter Buchholz, Jens Gutzmer, Christian Drexhage. IEA (International Energy Agency). 2020. “Clean energy progress after Hagelüken, Peter Herzig, Ralf Littke, and Rudolf K. Thauer. 2018. the Covid-19 crisis will need reliable supplies of critical minerals.” Live Wire 2018/87. “Closing the Raw Materials for Future Energy Supply. Springer. Gender Gap in Extractives,” by Rachel Paris. https://www.iea.org/articles/clean-energy-progress-after- Bernice Parks and Diana Catalina the-covid-19-crisis-will-need-reliable-supplies-of-critical-minerals This Live Wire is based on original research conducted by Clara Galeazzi and Buitrago Orozco. La Porta, Daniele, Kirsten L. Hund, Michael S. McCormick, Jagabanta Jevgenijs Steinbuks. It will appear as part of a forthcoming World Bank report Live Wire 2020/109. “An Emerging Ningthoujam, and John R. Drexhage. 2017. “The growing role on natural resources and the economic transformation in Africa, written Natural Gas Hub in the Eastern of minerals and metals for a low-carbon future.” World Bank, by a team led by Boubacar Bocoum and James Cust. The authors thank Mediterranean,” by Alexander Washington, DC. http://hdl.handle.net/10986/28312 Martin Lokanc, Sven Renner, and Michael Toman for helpful comments and Huurdeman. suggestions that led to considerable improvement of the Live Wire. Get Connected to Live Wire Live Wire briefs are The Live Wire series of online knowledge notes, an initiative of the World Bank Group’s designed for easy reading Energy and Extractives Global Practice, offers rich insights from project and analytical work on the screen and for done by the World Bank Group. downloading and self-printing “Live Wire is designed in color or black and white. 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