OCBC Warns Critical-Mineral Race Is Expanding Beyond Energy Into AI and Defense

Highlights

• OCBC Group Research identifies critical minerals at the intersection of energy, AI, electrification, and defense with demand growing nearly 10% annually
• China retains dominance in critical-mineral processing while Indonesia now controls over 70% of global nickel supply, showing how diversification creates new concentrations
• New rare-earth refining projects in Malaysia and the U.S. produced only modest supply-concentration declines between 2023 and 2025
• REEx argues scarcity value is migrating downstream—a full financeable chain from feedstock to magnets matters more than mine count alone
• Investors should scrutinize ex-China projects for processing steps, technology, economics, and offtake relationships, not just mining output

OCBC Group Research (opens in a new tab) out of Singapore argues that critical minerals increasingly sit at the intersection of energy security, artificial intelligence, electrification, and defense. Analyst Ong Shu Yi (opens in a new tab) points to overlapping demand growth, highly concentrated processing, export controls, and expanding strategic stockpiles. REEx agrees with the broad thesis but sees a crucial distinction for investors: diversifying mines does not necessarily diversify supply chains.

REEx Insight: The Bottleneck Is Moving Downstream

This is bigger than another commodity cycle. Critical minerals increasingly serve several growth engines simultaneously—power grids, electrification, AI data centers, and defense. OCBC, citing IEA data, reports that demand for copper, lithium, nickel, and cobalt has grown close to 10% annually in recent years, compared with roughly 1% for aluminum and zinc. AI data centers add another overlapping demand source for copper, aluminum, silicon, gallium, rare earths, and battery minerals.

But investors should distinguish additional tonnage from genuine resilience. China remains dominant across much of critical-mineral processing, while Indonesia demonstrates how diversification from one jurisdiction can create a new concentration elsewhere: its share of global nickel supply has risen above 70%, according to OCBC. Meanwhile, new rare-earth refining projects in Malaysia and the United States produced only a modest decline in supply concentration between 2023 and 2025.

The REEx implication: scarcity value may increasingly migrate downstream. A mine is important; a financeable chain connecting feedstock to separation, metals, alloys, magnets, and qualified customers can be strategically more consequential. Investors should therefore scrutinize proclaimed “ex-China” projects for the processing steps, technology, economics, and offtake relationships between mine and end market.

The Oil-Security Playbook—With More Moving Parts

OCBC compares today's mineral-security challenge with earlier concerns over oil security. Governments are responding with stockpiles, international cooperation, and recycling. The U.S.-Japan framework and the Quad Critical Minerals Initiative illustrate that shift. But OCBC correctly notes an important complication: unlike oil, critical minerals encompass numerous materials and compounds with different storage requirements, shelf lives, and costs.

The report convincingly captures demand convergence and geopolitical concentration. What it does not deeply test is whether announced alternative processing capacity can compete economically and technologically with entrenched Chinese ecosystems.

For REEx, that may be the investable question beneath the headline.

Source: Ong Shu Yi, OCBC Group Research, The Race for Critical Minerals: Energy Security, AI Growth and Geopolitics, September 1, 2026.