Critical Mineral Bottlenecks: A Looming Threat to Clean Energy’s Cost Decline

Highlights

• The IEA predicts potential critical mineral supply shortages by 2035 due to concentrated market control and geopolitical tensions.
• China dominates critical mineral processing, controlling about 90% of value-added production in key markets.
• Global supply chains face significant risks from export controls, trade barriers, and potential disruptions in mineral-producing countries.

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In their February 2025 commentary, Shobhan Dhir, Eric Buisson, and Tae-Yoon Kim (opens in a new tab) from the International Energy Agency (opens in a new tab) (IEA) argue (opens in a new tab) that growing geopolitical tensions and market disruptions underscore the urgent need for stronger action to secure critical mineral supplies.

The authors highlight that, despite recent price fluctuations, the global supply of critical minerals—vital for everything from electric vehicles to renewable energy—remains precariously concentrated in a few countries, such as China and Indonesia. Of course, when it comes to processing and value-added production, China controls about 90% of the market.

This concentration, combined with increasing export controls and trade barriers, puts global supply chains at risk. The IEA predicts that the market for essential minerals like lithium, nickel, and cobalt will face supply shortages as early as 2035, especially if key producers experience disruptions. They stress the need for coordinated international efforts, including diversification of suppliers and investments in mining infrastructure, to prevent economic instability from critical mineral supply shocks.

However, the IEA’s focus on geopolitical risks and supply chain concentration may overlook several critical issues. Firstly, the analysis downplays the environmental and ethical concerns tied to critical mineral extraction, such as human rights violations and environmental degradation in producing countries. While the IEA calls for diversification, it offers little in terms of concrete actions to address the adverse social impacts of mining activities in regions like Africa and South America.

Additionally, while supply disruptions are acknowledged, the article fails to explore the role of technological innovation in reducing dependence on certain minerals or improving recycling efficiency. Economic interests could also influence the IEA’s call for diversification, as it aligns with policies favoring the expansion of Western mining industries, potentially neglecting the broader geopolitical and environmental ramifications. In essence, while the IEA raises legitimate concerns about the future of critical mineral security, it fails to assess the broader consequences of its proposed solutions critically.