Circularity and Geopolitics: A new approach to securing supply chains

The value of circularity initiatives extends beyond sustainability. With the world set for years of systemic uncertainty in international relations, circular materials can help secure supply chains against geopolitical risks.

As the Shangri-La Dialogue gets underway in Singapore next week, geopolitical uncertainty is as high as at any point since the summit began over 20 years ago. Strained US-China relations and a broader breakdown in international cooperation have long been topics at the Dialogue – with a wider conversation emerging in recent years about the economic and commercial consequences of this more uncertain new normal.

At the last gathering, then governor of Indonesia’s National Resilience Institute Lembaga Ketahanan Nasional Republik Indonesia, Andi Widjajanto, noted a new age of “global disconnectivity” with attendant economic decoupling and de-risking. The US Director of National Intelligence Avril Haines similarly highlighted the potential for adversarial relationships to affect key technology supply chains.

These comments show that while the dislocation or realignment of supply chains has been a reality for many industries over several years now, new vulnerabilities are still emerging. A World Economic Forum white paper published in April highlights the potential for access to the critical minerals essential to the energy transition to not only be impacted by geopolitical tensions, but to create new ones. In particular this is due to soaring demand for materials such as aluminium, cobalt, titanium and rare earth metals needed for “wiring, batteries, magnets and other key elements of cleaner energy systems”, and the concentration of mineral resources and processing capabilities in particular markets.

The report’s conclusion that there are “many reasons for diligence” is vital advice for businesses reliant on critical minerals and other commodities. The growing risks of competition and geopolitical instability more broadly are neither unforeseeable, nor are the consequences unmanageable. Indeed, vigilant companies can take proactive steps now to mitigate these uncertainties and protect their interests.

Circularity initiatives that increase the secondary supply of critical minerals and other commodities can play a central role in reducing organisations’ exposure to geopolitical risks and better securing their supply chains. In the current international environment, it is clear that supplies of primary sources can be vulnerable: from the major volatility in aluminium markets following the invasion of Ukraine by Russia, to China’s halt on the export of some rare earths processing tech, or the US blocking imports of Russian-made metals – aluminium, copper and nickel – produced after mid-April 2024.

At Nandina REM we draw on reliable, accessible sources of highly-engineered materials such as aviation aluminium and carbon fibre, and instead of scrapping or low-value recycling we use advanced reprocessing technology to retain their value for reuse in industrial supply chains. Our traceability-first approach also ensures we can guarantee the source, delivery, location and end uses of our materials throughout the supply chain.

This new approach helps to cut emissions, strengthen governance, reduce material costs, and does not require the same level of investment as many other sourcing solutions. It will also be a key tool to build greater supply chain security for the uncertain years ahead, as end buyers look to mitigate the risk impacts of geopolitical tensions – from sanctions and trade restrictions, to insecurity and beyond.

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