Global Critical Minerals Rely On International Trade, Study Shows Critical Vulnerabilities

More than 60% of global demand for critical minerals is met through international trade, according to a recent study. While cross-border trade has helped scale supply, it has also increased exposure to geopolitical tensions, export controls, and processing bottlenecks, making mineral supply chains far more vulnerable to disruption amid surging demand. “Critical minerals underpin the technological innovations that drive economic growth, energy security, supply-chain resilience, and the competitiveness of emerging clean-energy industries,” research from the International Energy Forum (IEF) shows. The organization explained that meeting the rapidly rising demand will require a forward-looking policy framework, rather than focusing solely on downstream technologies. Demand Growth Scaling the Risk The scale of dependence on trade is itself a structural risk. With more than half of the mineral supply crossing borders, minor disruptions can ripple through the global market. Mining and refining concentration heightens the exposure, leaving supply chains sensitive to policy shifts, logistical constraints, and geopolitical shocks. Demand growth could only intensify those pressures. Per IEF, the global demand for five key energy-transition minerals (copper, nickel, cobalt, lithium, and rare earths) will rise. The organization sees the trend from 28 million tons in 2021 to nearly 41 million tons by 2040. Copper remains the most significant component, as electrification and grid expansion rise. Meanwhile, nickel and lithium show the fastest growth as electric vehicles and battery manufacturing scale up. Rare earth elements and cobalt post steadier increases but remain indispensable for motors, electronics, and advanced manufacturing. Concentration Catalysts Several strong catalysts sit behind this trend. Notably, electric vehicles use roughly four times as much copper as conventional cars. At the same time, the rapid expansion of artificial intelligence, data centers, and semiconductor-heavy industries is intensifying competition for the same minerals, tightening markets across multiple sectors. Geographic concentration compounds the challenge. Indonesia accounts for more than half of the global nickel supply. The Democratic Republic of the Congo produces around 70% of the world’s cobalt, while China controls more than 90% of rare earth refining capacity. The lithium market exhibits a similar pattern, with Australia, Chile, and China leading the trend. Thus, concentration leaves dependent nations heavily exposed to policy decisions from just a handful of jurisdictions. Government Response Accelerates Unsurprisingly, governments are urgently responding to the challenge. IEF noted that, since 2020, the number of critical policies worldwide has nearly doubled compared to the previous two decades. Measures range from strategic planning and domestic processing mandates to export controls and incentives for exploration, recycling, and refining. While these policies aim to strengthen security, the IEF warns that uncoordinated interventions risk increasing volatility if not paired with international cooperation. These dynamics explain why Washington continues to push for deals that allow for direct access to the minerals. In 2025, the White House has stepped up efforts to reduce reliance on foreign supply chains through mining and refining. “What we want to see is the ability for the US to not be reliant on any adversary out there or any other foreign entity, that we control our own destiny when it comes to our supply chain and our critical minerals,” Jarrod Agen, executive director of the White House’s National Energy Dominance Council, said, according to Reuters. “We’ve set a good pace so far, but this is just the first year,” he noted. Price Watch: Sprott Critical Materials ETF (NASDAQ:SETM) is up 93.23% year-to-date. Read Next: EXCLUSIVE: Trump Policy Shift Could Deliver Major Boost To US Mining, Pebble CEO Says Photo by Rebel Red Runner via Shutterstock