Systemic Risk in the Lithium and Copper Value Chains: A Network-Based Analysis Using Euclidean Distance and Graph Theory

Abstract

The global push for electrification and decarbonization has sharply increased demand for critical raw materials—especially lithium and copper—heightening financial and strategic pressures on firms that lead these supply chains. Yet, the systemic financial risks arising from inter-firm interdependencies in this sector remain largely unexplored. This article presents a novel distance-based network framework to analyze systemic risk among the world’s top 15 lithium and copper producers (2020–2024). Firms are represented through standardized vectors of profitability and risk indicators (liquidity–solvency), from which we construct a two-layer similarity network using Euclidean distances. (...)