The Strategic Importance of Lithium and Rare Earth Elements in the Energy Transition

Portugal can take pride in having Europe´s largest lithium mine, a vital resource in the journey towards a more sustainable future. Lithium plays a fundamental role throughout the entire value chain of electric mobility, from mining extraction to battery construction. This strategic position places the country at the forefront of the energy transition. With the right approach and well-established partnerships, this entire system could be fully operational in just five years. 

From a technical standpoint, lithium production doesn´t present significant challenges, as the involved technologies are nearing maturity. However, obstacles lie in areas such as politics, taxation, organization, and partnership formation. 

In addition to lithium, rare earth elements are crucial for sustainability and the modern economy. Europe relies entirely on imports of these essential elements, which are vital for the ongoing technological revolution. Without rare earth elements, economic progress would be considerably slower, resembling the scenario of the 1960s. 

Growing awareness of the need to reduce carbon emissions and confront the climate crisis has led many governments to promote a shift towards a low-carbon economy. The collective vision is one of a future powered by clean technologies, with electric cars replacing internal combustion vehicles and an increasingly digitized society. 

In this envisioned future, electric cars are powered by lithium-ion batteries and highly efficient electric motors. Renewable energy sources, such as solar panels and wind turbines, are widely used, and small electric aircraft cater to short-distance travel. Society has become highly digital, with an economy geared towards dematerialization, even as data traffic grows exponentially. 

However, the energy transition and digital revolution require critical minerals, many of which are extracted using fossil fuels. Among these minerals, rare earth elements play a crucial role. Dependence on these valuable resources jeopardizes economic and technological progress. 

To ensure a sustainable future, it is essential for Portugal to be involved in all stages of the lithium value chain, including extraction, refining, and battery production. Merely exporting lithium ore is not the right path. The government should play a coordinating role in creating effective partnerships and developing a battery manufacturing facility. 

In summary, lithium and rare earth elements are strategic resources that will drive the energy transition and the digital society. Without these elements, we would regress in time and limit our technological and economic progress. The challenge is clear, and it is essential for Portugal and other countries to act decisively to ensure ongoing access to these vital resources and to forge a sustainable future. 

Therefore, abandoning illusions in favor of the lithium sector could be the path to a promising future, where Portugal plays a central role in the global energy transition.