Critical Minerals and the Energy Transition

Why minerals like lithium, cobalt, nickel and rare earths have become strategic, where they come from, and the risks of concentrated supply.

The shift to clean energy depends heavily on minerals. Electric vehicle batteries need lithium, nickel, cobalt and graphite. Wind turbines and electric motors use rare earth elements. Electricity grids need large amounts of copper. These are often called critical minerals, because they are essential and their supply is at risk.

Rising demand

The International Energy Agency has projected that demand for many critical minerals could rise several times over in the coming decades if countries meet their climate goals. An electric car typically uses several times more minerals than a conventional car, and onshore wind plants need much more mineral input than gas power plants of similar capacity.

Concentrated supply

Supply of many critical minerals is highly concentrated:

The Democratic Republic of the Congo produces around 70 percent of the world’s cobalt.
Australia is the largest producer of lithium, with Chile and China also important.
Indonesia is by far the largest producer of nickel.
China dominates the refining and processing of many critical minerals, including rare earths, lithium, cobalt and graphite, and produces most of the world’s rare earth magnets.

Concentration creates risks: disruptions in one country, whether from conflict, disasters or export restrictions, can affect global supply. China has at times restricted exports of certain minerals and processing technologies.

Responses

Countries are responding by:

Developing domestic mining and refining.
Forming partnerships with allied producers.
Stockpiling critical minerals.
Investing in recycling and in battery chemistries that use less scarce minerals.

India launched a National Critical Mineral Mission in 2025 to boost exploration, mining, processing and recycling of critical minerals, and has auctioned critical mineral blocks.

Cobalt and artisanal mining

Much of the DRC's cobalt comes from large industrial mines, but some comes from artisanal miners who dig by hand, sometimes in dangerous conditions and with reports of child labour. Concerns about these conditions have led battery makers to trace their supply chains and to develop batteries that use less cobalt or none at all.

Thinking the energy transition removes dependence on resources

Clean energy reduces dependence on oil and gas, but increases dependence on minerals. Securing these minerals responsibly and reliably is one of the central economic challenges of the transition.

Key takeaways

Critical minerals like lithium, cobalt, nickel and rare earths are essential for clean energy.
Demand could rise several times over as countries decarbonise.
Supply and especially refining are highly concentrated, with China dominant in processing.
Countries are responding with domestic mining, partnerships, stockpiles and recycling.