Highlights

• The London School of Economics report examines the role of strategic mineral stockpiles in mitigating global supply disruptions.
• The study highlights the growing concentration of mineral refining and extraction among key players like China and Indonesia.
• Governments are expected to develop fragmented national stockpiling strategies tied to industrial policy and economic security.

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The London School of Economics’ Centre for Economic Transition Expertise (opens in a new tab) (CETEx) has released Critical Stocks, Critical Stakes (Sept. 2025) — a policy report authored by Hugh Miller and Juan Pablo Martínez that dives deep into the role of strategic mineral stockpiles in mitigating global supply shocks. The study is timely: with rearmament, energy transition, and trade fragmentation converging, the world’s appetite for lithium, cobalt, and rare earths is colliding with geopolitical scarcity.

The report’s central claim is sobering yet powerful — stockpiling can buffer short-term shocks but cannot address chronic undersupply. It’s a scalpel, not a shield. The authors argue for international coordination, possibly through the IEA’s Critical Minerals Security Programme, to prevent fragmented hoarding that could trigger price chaos.

What Rings True: Economics Without Ideology

CETEx’s analysis is methodical, rooted in economic realism. The data (notably Figures 2.1–2.3) show the world’s dependence on rare earths and battery metals narrowing to just a few players — notably China and Indonesia, which dominate refining and extraction. This concentration risk is not speculative; it’s backed by IEA projections that China’s share of nickel refining could exceed 70% by 2040.

Critical-Stocks-Critical-Stakes.

Their five-part risk model—spanning market volatility, inflation, competitiveness, energy security, and national security—accurately reflects how mineral supply instability ripples through entire economies. The call for hybrid strategies (mixing public, private, and market-based stockpiles) is also well-founded. This approach aligns with Japan’s JOGMEC model, which has successfully used flexible reserves to stabilize markets without crippling innovation.

Where Assumptions Outpace Reality

Yet, the report leans idealistic in its faith in multilateralism. It imagines a coordinated stockpiling mechanism led by the IEA or IMF — a noble but politically fraught concept. In today’s fractured geopolitical order, where “friend-shoring” often trumps free trade, few producer nations will embrace Western-led schemes that could cap prices. The authors acknowledge this but understate how minerals have become strategic weapons, not commodities.

Moreover, the report risks underestimating market psychology: if investors sense governments are about to flood or hoard key minerals, speculative volatility could surge rather than stabilize. The LME’s 2022 nickel trading chaos should serve as a cautionary footnote.

The Real Story for Investors

For rare earth and battery metal investors, CETEx’s message is clear: stockpiles are coming—but not in a globally coordinated way. Expect fragmented national strategies, each tied to industrial policy, defense readiness, and price insurance.

The result? Short-term demand spikes as governments build reserves, followed by long-term structural tightness as investment in new supply lags. In this emerging “era of mineral mercantilism,” those who control refined material — not raw ore — will wield the real leverage.

Citation: Miller, H. & Martínez, J.P. (2025). Critical Stocks, Critical Stakes: The Effectiveness of Critical Mineral Stockpiles in Mitigating Supply Risks to Energy, Security and Information (opens in a new tab). London: CETEx, LSE.

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