IEA: Critical Minerals for Energy Face Greater Risks

According to Mining Weekly, the International Energy Agency (IEA) pointed out in its latest annual report, Global Critical Minerals Outlook, that the increasing concentration of supply in a handful of countries and the spread of export restrictions have heightened risks for the global critical minerals market.

The report provides the latest data and analysis on the supply-demand balance and investment in energy-related critical minerals such as copper, lithium, nickel, cobalt, graphite, and rare earths.

Additionally, the IEA has upgraded its Critical Minerals Data Explorer, an online platform for querying critical minerals data, which enables users to access the IEA's latest forecasts.

This report includes, for the first time, an analysis of energy-related strategic minerals, which are crucial for high-tech aerospace and advanced manufacturing industries.

"In today's world of escalating geopolitical conflicts, critical minerals have become a top priority for ensuring global energy and economic security. Through our world-leading data, analysis, and policy recommendations, the IEA provides vital support to countries worldwide in formulating medium and long-term strategies," said Fatih Birol, the IEA's Executive Director.

"These new analyses review the stakes and the measures needed to enhance the resilience and diversity of critical minerals, which are key to ensuring reliable, affordable, and sustainable energy in the 21st century," he added.

The report finds that the critical minerals market has become more concentrated, rather than less, particularly in smelting and processing. For copper, lithium, nickel, cobalt, graphite, and rare earths, the share of the top three producing countries has risen from an average of 82% in 2020 to 86% in 2024, with nearly all the increase coming from the largest producer.

While policymakers are now aware of these challenges, the IEA's detailed analysis of announced projects indicates that progress in diversifying critical minerals supply chains has been slow. Under current policy conditions and investment trends, the average share of the top three supplying countries will only decrease slightly over the next decade, barely returning to the concentration levels of 2020.

"Even when market supply is adequate, critical minerals supply chains remain vulnerable to supply shocks, whether from extreme weather, technical failures, or trade disruptions. Supply shocks have far-reaching impacts, driving up prices for consumers or reducing industrial competitiveness," Birol warned.

The report shows that demand for critical energy minerals has been growing strongly in recent years. In 2024, lithium demand grew by nearly 30%, surpassing the annual growth rate of 10% seen in the 2010s.

The report also reveals risks to the supply-demand balance over the next decade. Investment in critical minerals is weakening, with a growth rate of only 5% in 2024, significantly lower than the 14% in 2023. Exploration activities remained largely unchanged in 2024, halting the growth momentum seen since 2020, and there are signs of a slowdown in financing for startups.

The report specifically highlights the risks facing the copper market. As countries expand their power grids, copper demand is set to surge, while current copper mine project forecasts indicate a 30% supply deficit by 2035.

Increasingly stringent export restrictions will also impact supply security. Fifty-five percent of the energy-related strategic minerals covered in this report are subject to some form of export control. More importantly, the scope of restrictions includes not only raw ore and smelting products but also processing technologies.

Analysis of 20 energy-related strategic minerals reveals that despite their relatively small market size, supply disruptions can still have a severe economic impact. Prices of 15 minerals fluctuate more than those of crude oil.

This year's outlook report also explores the mineral supply chains of emerging battery technologies, such as lithium iron phosphate (LFP) and sodium-ion, which are challenging existing nickel-based lithium-ion batteries.

The report points out that these technologies still face high-intensity risks.