Critical Minerals: Why the Energy Transition Runs on Them

Why clean technology needs so many more minerals

A solar panel, a wind turbine or an electric car burns no fuel, but each is built from materials that a petrol car or a gas plant barely touches, or uses in far smaller amounts. According to the International Energy Agency (IEA), a typical electric car requires six times the mineral inputs of a conventional car; an onshore wind plant needs nine times more mineral resources than a gas-fired plant of the same size, and an offshore plant needs up to thirteen times more. The energy transition shifts that dependence from one set of materials to another: from oil, mined across dozens of countries and traded on deep, liquid global markets, to lithium, cobalt, nickel, graphite, copper and rare earths, whose processing sits in relatively few hands.

Real-world example: a mid-range electric sedan carries a battery pack built on lithium, cobalt and nickel, a motor with rare-earth permanent magnets, and kilometres of copper wiring. The combustion version of the same car uses a fraction of these materials, because it has neither the battery pack nor the magnet motor.

Anyone installing a solar power system at home rarely thinks about the supply chain sitting behind the panels. Yet every energy-transition technology raises the same question: where do these minerals come from, and how resilient is that supply chain really?

The concentration behind the price

The IEA’s answer is that critical mineral production is concentrating, not spreading out. In 2020 the top three extracting countries accounted for 73% of world output; by 2024 that had risen to 77%. Refining, the most delicate stage of the chain, is even more concentrated: from 82% in 2020 to 86% in 2024, in the top three refining countries.

The pattern isn’t uniform. For cobalt, graphite and rare earths, the IEA finds that roughly 90% of production growth between 2020 and 2024 came from a single dominant supplier for each mineral: the Democratic Republic of Congo for cobalt mining (with China dominating its refining), China for graphite and rare earths. Nickel also has a dominant producer, Indonesia. Lithium is the exception: a significant share of new production over the same period came from emerging producers such as Argentina and Zimbabwe, a sign that concentration isn’t a fact of geology but the outcome of decades of industrial and investment choices.

Refining, more than raw extraction, is what explains the focus on China. According to the US think tank CSIS, China accounted for as much as 99% of global heavy rare-earth processing through 2023, an edge reinforced further after a competing plant in Vietnam shut down. Despite the name, rare earths aren’t geologically scarce: they turn up fairly widely across the earth’s crust in multiple countries. The bottleneck is industrial — turning ore into usable material requires costly, polluting plants that have been built at scale almost nowhere but China.

Export as leverage

Concentration this heavy in a single country can become, and already has become, a tool of foreign policy. The first documented case dates to 2010, when China halted rare-earth exports to Japan after a diplomatic incident involving a Chinese fishing trawler detained by the Japanese coast guard. Fifteen years later, in April 2025, China’s Ministry of Commerce imposed mandatory export licences on seven heavy rare-earth elements — samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium: not an outright ban, but a licensing mechanism that slows shipments and makes supply uncertain. At the same time, 16 US companies, mostly in the defense and aerospace sectors, were added to an export control list.

Military dependence makes the issue concrete: according to CSIS, an F-35 fighter jet carries over 400 kg of rare earths, a Virginia-class submarine around 4,170 kg, and a DDG-51 destroyer around 2,360 kg. On the industrial side, world production of neodymium-iron-boron magnets stood at roughly 138,000 tonnes in 2018; by 2024 China alone was producing roughly 300,000 tonnes, while the United States was expected to produce only around 1,000 tonnes by the end of 2025, according to CSIS. That gap in industrial scale, on top of the geological one, is part of what drives this dependence.

For the European Union the dependence is already measurable country by country: according to the European Commission, in a snapshot covering 2023-2024, China supplies 100% of the heavy rare earths used in the EU, Turkey 99% of its boron, and South Africa 71% of its platinum. A trade freeze, or even a slowdown in licensing, can ripple through entire industrial sectors, with effects that also show up as inflation when supplies stall and prices jump.

Europe’s answer: the Critical Raw Materials Act

The European Union has responded by steadily expanding its list of critical raw materials — the way the bloc decides and legislates runs through exactly this kind of regulation, adopted by Parliament and Council on a Commission proposal. The list grew from 14 entries in 2011 to 20 in 2014, 27 in 2017, 30 in 2020, and 34 in the 2023 revision, a subset of which is classified as “strategic.”

The Critical Raw Materials Act, Regulation (EU) 2024/1252, which entered into force on 23 May 2024, sets three quantitative targets to be met by 2030: extract at least 10% of the EU’s annual consumption of strategic raw materials domestically, process at least 40% internally, and recycle at least 25%. On top of that sits a dependence cap: by 2030, no single non-EU country may supply more than 65% of the EU’s annual consumption of any given strategic raw material.

These are ambitious goals relative to where the EU starts, even if the 65% cap still leaves room for very heavy reliance on a single supplier. The IEA’s own projection for 2035, in fact, is that global refining concentration will decline only marginally from 2024 levels, drifting back close to where it stood in 2020.

What it means for industry and the energy transition

The most exposed supply chains are the ones already built around batteries and electric motors. Europe’s car industry, still working through the crisis that hit several manufacturers in the 2020s, competes in a market where the cost and availability of critical minerals feed directly into the sticker price of electric cars. A single export licence denied or delayed on one rare-earth element can stall a motor production line thousands of kilometres away.

For countries building out renewable power, from solar to wind, the logic runs the same way: installed capacity depends on a chain that starts in a handful of mines and narrows further through even fewer refining plants. Diversifying that chain — new lithium producers, more recycling, more processing capacity outside China — is where much of the energy security of the coming years will be decided.