The global race for critical minerals is entering a more complicated phase as demand continues to climb while governments and industries confront increasingly concentrated supply chains.

The International Energy Agency’s Global Critical Minerals Outlook 2026 says minerals once viewed mainly as industrial commodities are now becoming closely connected with energy security, economic competitiveness, advanced technology and national security.

The report, released in July 2026, examines recent market developments and provides projections for mineral demand and supply through the coming decades. It also explores policy options, nuclear fuel supply chains and the growing role of Latin America and the Caribbean.

Demand Is Heading Higher

The expansion of electric vehicles, battery storage, renewable power and electricity networks is reshaping the minerals market.

According to the IEA, demand for critical minerals is expected to nearly double by 2040 under its Stated Policies Scenario.

Lithium is projected to experience particularly rapid growth, with demand more than tripling by 2040. Nickel, graphite and rare earth demand is also expected to increase substantially.

Copper stands out for a different reason. While its percentage growth is less dramatic, the sheer quantity required makes it one of the most important minerals in the future energy system. The IEA expects global copper demand to increase by roughly seven million tonnes by 2040, driven largely by electricity networks and emerging technologies.

Supply Concentration Is Becoming a Major Concern

Producing enough minerals is only part of the challenge.

Where those minerals are processed matters just as much.

The IEA says the concentration of refining capacity increased for most major minerals in 2025. China remained the dominant refiner for many key materials, while Indonesia played a particularly important role in nickel.

Excluding rare earths, the average share controlled by the world’s leading refining country reached about 72% in 2025, compared with 70% two years earlier.

That concentration means a disruption in one major producing or processing country can have consequences far beyond its borders.

Export Restrictions Add Another Layer of Risk

Government policies are increasingly influencing mineral markets.

The IEA reports that the number of mineral tariff codes affected by Chinese export controls has tripled since 2023. Other major producers have also introduced restrictions affecting materials such as cobalt, lithium and graphite.

Such measures can quickly change the balance between supply and demand.

The cobalt market provides an example. The Democratic Republic of the Congo, the world’s leading producer, introduced an export quota, contributing to a projected supply gap that the IEA expects could exceed 25% by 2035 in its base case.

Meanwhile, the projected copper shortfall has improved compared with earlier forecasts but remains significant, with the IEA estimating a potential deficit of about 25% in 2035 based on current project pipelines.

Investment Has Fallen Despite Strong Long-Term Demand

Another concern highlighted by the report is the slowdown in investment.

Global investment by major mining companies in critical minerals declined by approximately 9% in 2025.

Battery-related minerals experienced the sharpest reduction. Spending by companies focused on lithium, nickel and cobalt fell by more than 20%, while lithium specialists reduced investment by around 40%.

Copper moved in the opposite direction, with investment by copper-focused companies increasing by about 8%.

The contrast reflects changing expectations across different parts of the mineral market. Battery manufacturers are rapidly adopting technologies that use different combinations of materials, while copper remains fundamental to grids, electrification and digital infrastructure.

Mining Alone Will Not Solve the Problem

One of the most important findings of the IEA report is that expanding mines is not enough.

New mining projects are appearing in countries outside today’s dominant suppliers, but refining, processing and manufacturing capacity is not expanding at the same pace.

Rare earths provide a clear example. The IEA expects diversified mining projects to add substantial capacity by 2035, yet planned refining and downstream production remains considerably smaller.

A similar imbalance exists across lithium, graphite, nickel and cobalt.

This creates a potential bottleneck: countries may succeed in producing raw minerals but remain dependent on a small number of countries for processing them into usable materials and components.

Recycling Could Become More Important

Recycling is emerging as another tool for reducing pressure on primary mineral supplies.

The IEA estimates that the contribution of secondary sources to the supply of key energy minerals could roughly double by 2040 under current policy settings.

Cobalt and copper already have established recycling systems, while recycling for lithium, nickel and rare earth magnets is expected to expand as more batteries, electric vehicles and renewable-energy equipment reach the end of their useful lives.

However, recycling capacity itself remains geographically concentrated. The report says China accounts for more than three-quarters of global battery pre-treatment capacity and about 90% of material-recovery capacity.

That means recycling can strengthen supply security, but countries will also need to diversify where recycling and material recovery take place.

Latin America Has an Opportunity

The IEA identifies Latin America and the Caribbean as an important potential source of future mineral diversification.

The region possesses significant resources of copper, lithium, silver, graphite and other strategically important materials. It is already a major producer of copper and lithium and has established expertise in mining.

But much of the region’s mineral output is exported for processing elsewhere.

In 2025, countries across the region refined only around one-fifth of the key energy minerals they mined, excluding lithium.

The IEA estimates that the region could capture around $185 billion in economic value by 2035 from its current project pipeline. With much greater local processing, that figure could rise to approximately $220 billion.

That creates an opportunity not only to supply international markets but also to build higher-value industries within the region.

Why Policy Is Becoming More Important

The report argues that market forces alone may not be sufficient to create resilient mineral supply chains.

Projects outside established supply centers can face higher construction and operating costs, shortages of skilled workers, infrastructure limitations and lengthy approval processes.

Governments are therefore increasingly using public finance, industrial policies and international partnerships to encourage investment.

The IEA says public finance commitments for critical-mineral projects in advanced economies reached about $65 billion in 2025, more than four times the level recorded in 2023.

The challenge now is turning those commitments into actual projects and ensuring investment covers the entire value chain—from mines and processing plants to recycling and manufacturing.

A Strategic Issue Beyond the Energy Transition

Critical minerals are no longer relevant only to electric vehicles and renewable energy.

The IEA highlights their growing importance in semiconductors, artificial intelligence infrastructure, robotics, telecommunications, aerospace and defence.

Materials such as gallium, germanium, tungsten, graphite, cobalt, tellurium and rare earth elements can have strategic importance despite relatively small market sizes.

The report identifies several of these minerals as particularly exposed to supply risks because production is concentrated, substitutes can be limited and their applications are strategically important.

The Next Decade Could Reshape Mineral Supply Chains

The central message of the IEA’s 2026 outlook is that the critical-minerals challenge is changing.

The question is no longer simply whether the world has enough mineral resources underground.

It is increasingly about whether those resources can be extracted, processed, transported and recycled through supply chains capable of surviving geopolitical disruptions.

Countries seeking greater security will need to diversify suppliers, expand processing capacity, invest in recycling, develop skilled workforces and strengthen international cooperation.

For Latin America, the changing market could provide an opportunity to move beyond exporting raw materials.

For major consuming economies, it could become a race to establish reliable alternatives before supply disruptions turn into industrial crises.

And for businesses, the message is clear: the minerals required for the next generation of technology are becoming strategic assets whose importance extends far beyond traditional commodity markets.

The global critical-minerals landscape is therefore entering a new phase—one in which resource ownership, processing capacity, technology and geopolitical relationships will increasingly determine who can compete in the industries of the future.

Key Takeaways

• Global critical-mineral demand could nearly double by 2040 under the IEA’s Stated Policies Scenario.
• Lithium demand is expected to more than triple by 2040.
• Copper could face a supply deficit of around 25% by 2035 based on the current project pipeline.
• A projected cobalt gap could exceed 25% by 2035.
• Critical-mineral investment fell about 9% in 2025.
• Public-finance commitments in advanced economies reached about $65 billion in 2025.
• Latin America could capture approximately $220 billion in economic value by 2035 with substantially greater local processing.