The International Energy Agency (IEA) has indicated potential vulnerabilities in the supply chain of strategic minerals critical for the energy and technology sectors in its new 2025 Global Critical Minerals Outlook.
The report underscores the increasing concentration of supply in a few countries and the rise of export restrictions, which heighten the risk of market disruptions.
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The IEA’s report reveals that the market share of the top three producers for critical minerals such as cobalt, copper, graphite, lithium, nickel and rare earth elements increased to 86% in 2024 from around 82% in 2020.
Significant supply growth is coming from Indonesia for nickel and China for other minerals.
Despite policymakers’ awareness of these challenges, the report suggests that diversification of supply chains is progressing slowly, with the top suppliers’ market share projected to decline only marginally over the next decade.
Demand for energy minerals has surged, with lithium demand growing by nearly 30% in 2024.
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By GlobalDataHowever, increased supply, particularly from China, Indonesia and parts of Africa, has led to lower prices for battery metals.
Investment and exploration activities in critical minerals have shown signs of slowing down, which could pose future risks to supply.
The report specifically highlights the risks faced by the copper market, where a projected 30% supply deficit by 2035 could arise due to surging demand for expanding electricity networks.
The prevalence of export restrictions is also a concern, with 55% of strategic minerals now under some form of export control, affecting not only raw materials but also processing technologies.
China recently imposed export restrictions on rare earths in response to US tariffs.
China’s dominance in refining 19 out of 20 of the strategic minerals analysed, coupled with high price volatility, underscores the economic impact of potential supply disruptions.
The IEA also examines supply chains for emerging battery technologies, noting the risks associated with China’s control over key components.
