By: Green Building Africa

A new report from the International Energy Agency warns that growing supply concentration, rising export restrictions and declining investment are putting global critical mineral security under pressure, despite signs of policy progress in some areas.

The Global Critical Minerals Outlook 2026 highlights how minerals such as copper, lithium, nickel, cobalt, graphite and rare earth elements are becoming central to energy, industrial and national security strategies. However, tightening supply conditions pushed prices higher in 2025 and early 2026, while a wave of export restrictions added further strain to already fragile supply chains.

Investment in the sector fell by 9% in 2025, ending several years of steady growth. At the same time, supply chains have become more geographically concentrated, particularly in refining. Indonesia and China together accounted for more than three quarters of growth in refined supply over the past two years, with some markets seeing almost all new supply coming from a single dominant player.

The report points to export controls as a growing economic risk. Restrictions on rare earth exports introduced in 2025 disrupted automotive production, and further measures could place up to US$6.5 trillion in annual downstream output outside China at risk if fully implemented.

Despite these pressures, there are signs of improvement. Government support is increasing, with public financing commitments more than quadrupling between 2023 and 2025 to reach US$65 billion. In rare earth refining, new capacity in the United States and higher output in Malaysia reduced the leading supplier’s market share from above 90% in 2023 to 85% in 2025, with projections suggesting this could fall to 70% by 2035.

However, the report identifies a structural imbalance in diversification efforts. Investment remains heavily focused on mining, while refining and downstream processing capacity continues to lag. For example, planned rare earth refining capacity is expected to reach only about two thirds of projected mine output by 2035, while magnet production may cover just one third of demand.

The IEA also highlights the importance of strategic minor minerals, which have small markets but carry significant economic risk if disrupted. With strong policy support and international coordination, these minerals could offer cost effective opportunities to strengthen supply security.

Fatih Birol, Executive Director of the IEA, said that while critical minerals represent a small share of end product costs, their supply chains remain highly concentrated and vulnerable. He noted that diversification may come at a higher cost but should be viewed as a form of economic insurance in a volatile geopolitical environment.

For example, critical minerals account for about 25% of battery cell costs but only around 3% of the price of an electric vehicle. Similarly, rare earths make up roughly 40% of permanent magnet costs but less than 1% of total vehicle value.

The report stresses that building resilient supply chains will require more than new mining projects. It will also depend on addressing shortages in processing technology, equipment and skilled labour, particularly outside dominant supply regions where costs are higher and lead times longer.

The IEA calls for stronger policy action, including measures to support investment, improve emergency preparedness and close gaps in technology and workforce capability, as countries seek to secure critical mineral supplies in an increasingly uncertain global landscape.