Critical Minerals: Estimating Price Elasticity of Supply Using Mine-Level Data

As the demand for critical minerals to the energy transition strongly grows, it is crucial to understand whether their supply is able to match it. In this paper, we address this question by estimating the price elasticity of supply for 8 minerals between 2000 and 2019, using mine-level production data with global coverage. We isolate global price variations related to mineral-specific demand shocks using a structural VAR with sign restrictions and study the reaction of mineral production to these price variations in a local projection framework.