Global Critical Minerals Outlook 2025

1. Market Review of 2024

Strong Demand Outpaced by Supply, Causing a Price Collapse: In 2024, demand for critical minerals continued its robust growth, driven by clean energy applications. Lithium demand surged by nearly 30%, while demand for nickel, cobalt, graphite, and rare earths grew by 6-8%. However, an even faster expansion of supply—particularly for battery metals—exerted significant downward pressure on prices. Lithium prices, which had surged eightfold in 2021-22, have fallen by over 80% since 2023. Prices for graphite, cobalt, and nickel also dropped by 10% to 20% in 2024.

Investment Slows as Supply Chain Concentration Intensifies: The low-price environment has weakened investor confidence. The growth rate for investment in critical mineral development slowed to just 5% in 2024, down from 14% in 2023. Exploration activity also plateaued. Concurrently, the concentration of global supply chains has increased, especially in refining. The average market share of the top three refining nations rose from approximately 82% in 2020 to 86% in 2024. This growth was almost entirely led by a few dominant countries: Indonesia for nickel, and China for cobalt, graphite, and rare earths.

Geopolitical Risks and Export Controls Proliferate: Amid rising supply concentration, geopolitical tensions have escalated, leading to a wave of new export control measures. Since 2023, China has implemented export licensing requirements for gallium, germanium, graphite, and rare earths, and later expanded these controls to antimony and tungsten, among others. In February 2025, the Democratic Republic of the Congo (DRC) announced a temporary four-month halt on cobalt exports to counter falling prices.

2. Outlook for Key Minerals

Clear Long-Term Demand Growth with Significant Supply Gap Risks: The report projects strong long-term demand growth across all scenarios. In the Stated Policies Scenario (STEPS), demand for lithium is set to grow nearly fivefold by 2040, while demand for graphite and nickel will double. While announced projects for minerals like nickel, cobalt, and graphite may be sufficient to meet demand before 2035, copper and lithium face critical long-term supply gaps.

Copper and Lithium Emerge as Major Concerns: The copper market faces a potential supply deficit of up to 30% by 2035. This is due to a combination of factors including declining ore grades, rising capital costs, long project lead times, and a limited pipeline of new discoveries. The lithium market, while well-supplied in the near term, is projected to enter a deficit in the 2030s as demand continues to surge.

Supply Chain Vulnerability Remains a Core Issue: Refining operations are set to remain highly concentrated. By 2035, China is projected to supply over 60% of refined lithium and cobalt, and around 80% of battery-grade graphite and rare earths. The report’s “N-1” resilience test, which simulates the removal of the largest supplier, reveals extreme vulnerability. For battery metals and rare earths, the remaining global supply would only meet about half of the remaining demand in 2035. A sustained supply shock could increase average battery pack prices by as much as 40-50%.

3. Topical Deep Dives

Policy Support is Essential for Diversification: The report argues that market forces alone will not deliver diversified supply chains, as capital costs for new projects in emerging regions are typically 50% higher than in incumbent producer countries. Well-designed policy mechanisms are required, including financial tools like Contracts for Differences (CfDs) and cap-and-floor models to de-risk investment, as well as volume guarantees and standards-based market access policies. For example, incentives for lower-emission “green nickel” could unlock significant supply from outside today’s dominant producers, reducing market concentration.

Technological Innovation as a Key Driver: The report highlights the transformative potential of upstream and midstream innovation. In mining, AI-based exploration could cut drilling costs by up to 60%, while technologies like Direct Lithium Extraction (DLE), ionic adsorption clay processing, and the re-mining of tailings can unlock new and unconventional resources. In refining, novel synthetic graphite production methods and new recycling techniques can improve efficiency and reduce environmental impact.

Emerging Battery Supply Chains Carry Their Own Risks: The rapid rise of Lithium Iron Phosphate (LFP) batteries, which now command nearly half the EV market, has shifted mineral dependencies. However, their supply chains are even more concentrated than those for nickel-based batteries. China produces 98% of LFP cathodes, 75% of the required purified phosphoric acid (PPA), and 95% of the high-purity manganese sulfate needed for manganese-rich and sodium-ion batteries. The report warns that announced projects for PPA and manganese sulfate are insufficient to meet projected demand from around 2030 onwards.

Broader Strategic Minerals Pose Wider Economic Risks: The analysis was expanded to 20 energy-related, multi-sectoral minerals, revealing significant risks. Key vulnerabilities for this broader group include: extreme supply chain concentration (China is the top refiner for 19 of the 20 minerals analyzed) ; high price volatility (75% have been more volatile than oil) ; and heavy by-product dependency (around half are produced as by-products of other metals), which limits their supply responsiveness to market signals.

4. Regional Snapshot

Major Economies Accelerate Strategic Initiatives: Europe is actively implementing its Critical Raw Materials Act (CRMA), which sets domestic production targets for 2030 (10% extraction, 40% processing, 25% recycling) and has designated 47 “strategic projects” to fast-track development. North America, led by the U.S. and Canada, is using executive orders, financial incentives (e.g., the U.S. Inflation Reduction Act), and the Defense Production Act to bolster domestic supply chains and accelerate permitting.

China Continues to Solidify Its Dominant Position: China is reinforcing its leadership through a multi-pronged strategy that includes massive state funding for domestic geological exploration, strategic overseas investments to secure raw materials, and the use of export controls on key minerals and technologies to enhance state control over the global supply chain.

Resource-Rich Nations Focus on Value Addition: Countries across Africa and Latin America are increasingly adopting policies aimed at capturing more economic value from their mineral wealth. Inspired by measures like Indonesia’s nickel ore export ban, nations such as Zimbabwe and the DRC are implementing their own export controls and promoting the development of domestic processing and refining capabilities.