Critical mineral supply shocks and their consequences for the energy transition in Commodity News 27/03/2026 As renewables penetrate ever deeper into national energy systems, it is time to consider the short- and long-run impacts of upstream supply shocks in seemingly well-supplied markets like copper and lithium. The ongoing energy transition is chipping away at established geopolitical boundaries, as the focus on crude oil steadily shifts to critical minerals such as lithium, copper, cobalt, nickel, and rare earth elements – minerals fundamental to batteries, grids, and low-carbon technologies. However, the supply of certain critical minerals is anything but diversified. Both mining and processing are concentrated geographically, making supply chains vulnerable to shocks, even in well-supplied markets. These disruptions can stem from a variety of sources, including extreme weather, social license disputes, or trade disruptions. While critical mineral supply shocks are unlikely to be as profound or frequent as the kind of shocks to the world’s energy system that fossil fuels have all too often delivered, with the recent closure of the Strait of Hormuz a particularly acute example, our analysis reveals that modeling upstream shocks to renewables is a very necessary exercise. Green versus green dilemma Opposition to extractive industries and infrastructure tend to be rooted in concern over the impact on the local environment, resources, and biodiversity. However, local opposition rarely constrains the energy transition directly; its primary impact operates through project delays, cost escalation, and heightened uncertainty that propagate across global supply chains, particularly for mineral-intensive technologies such as batteries. These disputes should be understood not as isolated local events but as embedded risks within already-stressed supply chains. In some cases, they can escalate beyond community resistance into regulatory/government intervention, broader political conflict, or expropriation, generating abrupt supply disruptions. Evaluating ‘green versus green’ tensions therefore requires assessing how localized frictions translate into systemic risks for the pace and resilience of the energy transition. Chile at a crossroad: a mineral powerhouse running dry Chile, a key supplier of lithium and copper, exemplifies the complex interplay between resource extraction and environmental constraints. The country’s key mining region sits on the edge of the Atacama Desert, one of the most water-stressed environments in the world. Mining in this region relies heavily on groundwater, creating growing competition between industry, local communities and fragile ecosystems. In the Salar de Atacama, lithium and copper extraction account for over 65% of local water use, and tensions with local communities are escalating over cases of over-extraction and contamination of freshwater (WRI, 2024). Growing concerns over water depletion and environmental impact has resulted in legal action and public protest. In response, stricter water limits on mining operations have been imposed and companies have pledged to halve their authorized brine extraction (S&P Global, 2025). Impact on energy transition To assess the consequences of unmitigated local opposition to the extraction of minerals, the impacts must first be translated into metrics that are meaningful for the energy transition itself. Local resistance does not directly ‘reduce decarbonization’; rat