Critical minerals are at increasing risk of “painful disruption” due to their higher concentration in a handful of countries and the spread of export restrictions, according to a report from the International Energy Agency.
Progress toward more diversified supply chains will be slow, according to the agency's outlook for 2025 released on Wednesday. Investment momentum has weakened after spending growth fell last year and exploration activity plateaued, while start-up funding also showed signs of slowing, it said.
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For copper, lithium, nickel, cobalt, graphite and rare earth elements, the IEA said the average market share of the top three producers rose to 86% in 2024, with almost all supply growth centered on a single supplier — Indonesia for nickel and China for the others.
The IEA said 55% of the energy-related strategic minerals covered in the report are now subject to some form of export control. Meanwhile, the scope of restrictive measures is widening to encompass not just raw and refined materials but also processing technologies.
China is the leading refiner of 19 of the 20 minerals analyzed by the IEA, and the country has an average market share of around 70%. While the market sizes may be small for some, disruptions could have outsized economic impacts, and 15 of the minerals have exhibited greater price volatility than oil, it said.
The IEA highlighted major risks facing copper markets as countries look to expand their electricity networks while the current pipeline for mine projects points to a 30% supply deficit by 2035.
For battery metals, major supply increases – led by China, Indonesia and parts of Africa – have put downward pressure on prices. Various battery technologies also face high concentration risks, with China controlling the supply chains for vital components such as manganese sulphate and phosphoric acid.
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