Situation Report2026-06-12

The State of Critical Minerals: Global Challenges, Outlook and Market Landscape (2025 2026)

By Dr. Masoud Zamani

Introduction Critical minerals (e.g., copper, lithium, nickel, cobalt, graphite, rare‑earth elements, manganese and platinum group metals) underpin batteries, electric vehicles (EVs), renewable energy…

Introduction

Critical minerals (e.g., copper, lithium, nickel, cobalt, graphite, rare‑earth elements, manganese and platinum group metals) underpin batteries, electric vehicles (EVs), renewable energy systems, data centres, artificial intelligence and defence technologies. Demand for these minerals is rising rapidly and is expected to increase about 1.5 × between 2024 and 2040. EVs use up to six times more minerals than internal‑combustion cars, while wind and solar systems require 6–13× more minerals per unit of capacity than gas‑fired power plants. Supply, however, is concentrated in a small number of countries, and long development timelines mean that bottlenecks and price volatility are likely to persist. This report synthesises a comprehensive range of sources to outline the current state of the critical‑mineral market, identify major players and prospects, and provide a six‑month market overview (December 2025 – June 2026).

Global market overview

Rising demand and supply concentration

Energy transition drivers: Demand for copper, lithium, nickel, cobalt, graphite and rare‑earth elements is being driven by EVs, grid storage, wind and solar installations, data centres and military electronics. J.P. Morgan expects global lithium demand to grow ~16 % year‑on‑year in 2026, with EVs and energy‑storage systems accounting for most incremental demand, while copper demand is forecast to grow ~2.6 % year‑on‑year.
Supply concentration: China dominates much of the supply chain: 69 % of rare‑earth mining, 91 % of refining and 94 % of magnet production. For tungsten, about 80 % of processing capacity is in China, causing European manufacturers to face export delays. The U.S. imports >50 % of its lithium and >67 % of its rare‑earth compounds, while the EU imports 97 % of its magnesium from China and 99 % of boron from Turkey.
Pipeline shortages: Many new mine projects are shrinking and development takes 7–10 years. Analysts warn of a supply deficit in copper and lithium by 2035. Lithium demand could rise from 1.2 Mt LCE in 2024 to 2.5–3.3 Mt by 2030; supply shortages could produce a 38 % gap by 2035.
Price volatility: By early 2026, prices for some minerals have corrected sharply from 2023 peaks (e.g., lithium carbonate down ~70 %), yet structural tightness remains because supply has not kept pace with demand. In Germany, the tungsten price tripled between 2025 and early 2026, while lithium prices rose from US$8 000/t in mid‑2025 to >US$22 000/t by February 2026.

Geopolitical competition and government intervention

United States: In February 2026 the U.S. hosted the 2026 Critical Minerals Ministerial and launched the Resource Geostrategy Engagement Forum (FORGE). The event gathered representatives from 54 countries and the EU; U.S. officials emphasised that the critical‑minerals market is highly concentrated and therefore susceptible to political coercion. The U.S. signed 11 new bilateral memoranda of understanding (MoUs) with countries such as Argentina, Ecuador, Guinea, Morocco and the Philippines, and announced over US$30 billion in project support and loans to build diversified supply chains. In April 2026, the U.S., Japan and the EU advanced talks on a critical‑minerals trade framework that would set minimum prices and tariffs to counter market manipulation.
Price‑floor debate: After initial proposals to guarantee minimum prices, the Trump administration retreated from domestic price‑floor mechanisms in February 2026 due to fiscal and legal concerns. Alternative measures include equity investments, strategic offtake agreements, streamlined permitting and Section 232 import price triggers. Nonetheless, private contracts are adopting floor‑price clauses; a Lynas–Japan supply agreement signed in March 2026 includes a fixed floor price of US$110/kg for neodymium‑praseodymium (NdPr) and an upside‑sharing mechanism, with supply to Japanese industry through 2038.
Europe: The EU’s Critical Raw Materials Act seeks to ensure that by 2030 no more than 65 % of each strategic raw material comes from a single third country. However, the European Court of Auditors warns that EU plans lack solid data, and domestic production projects are unlikely to guarantee supply security by 2030. Germany plans to import more lithium from Australia and has encouraged strategic stockpiles; the German Raw Materials Agency recommends that both industry and the state hold reserves.
Japan: Reuters reported in March 2026 that the U.S., Japan and the EU were preparing a joint framework with price floors and tariffs to counter Chinese market distortions. Another Reuters article from January 2026 noted that the U.S. Treasury Secretary urged partner countries (Australia, Canada, EU, India, Japan, Mexico, South Korea, UK, etc.)—representing 60 % of global critical‑mineral demand—to strengthen supply‑chain resilience and reduce reliance on China, which refines 47–87 % of copper, lithium, cobalt, graphite and rare earths.
China: Chinese‑language reports covering the U.S. ministerial meeting highlight concerns about the “highly concentrated market” and U.S. plans to establish a diversified, resilient supply chain. The U.S. signed MoUs with 11 countries, launched the FORGE forum and announced major investments, including a US$10 billion “Project Vault” to build a domestic strategic stockpile. VOA Chinese noted that the U.S. is creating a mineral trade group with a price‑floor system and is urging partners to diversify supply chains and reduce dependence on China.

Key challenges

Challenge	Evidence/Explanation
Supply chain concentration	Dominance of a few countries in mining and processing (e.g., China controls ~69 % of rare‑earth mining and >90 % of refining; Germany relies on China for 80 % of tungsten processing; EU imports 97 % of magnesium from China).
Geopolitical risks	Export controls and pricing power used as political leverage; China introduced rare‑earth export restrictions in 2025. German producers report delays and permit requirements on exports.
Long permitting and ESG hurdles	New mines can take over a decade to develop; environmental and social concerns delay projects.
Infrastructure and refining gaps	Lack of domestic processing and refining capacity outside China; the U.S. imports >50 % of its lithium and >67 % of rare‑earth compounds.
Price volatility	Market cycles deter long‑term investment; examples include tungsten price tripling between 2025 and 2026 and lithium carbonate prices swinging from >US$70,000/t (2022 peaks) to <US$20,000/t (early 2026).

Companies active in the critical‑minerals market

The table below summarises notable producers in major mineral categories (not exhaustive). Companies were chosen for their scale, market impact or policy relevance; many operate globally and partner with governments.

Mineral	Major producers (examples)	Notes
Lithium	Albemarle (US), SQM (Chile), Pilbara Minerals (Australia), Ganfeng Lithium (China), Tianqi Lithium (China)	Albemarle is reopening the Kings Mountain mine in North Carolina with Pentagon and DOE grants; Pilbara and SQM expand capacity to meet EV demand.
Nickel	BHP (Australia), Vale (Brazil), Norilsk Nickel (Russia), Tsingshan (China), Nickel Industries (Indonesia)	Indonesia supplies ~72 % of global nickel output; Tsingshan pioneered high‑pressure acid leaching (HPAL).
Cobalt	Glencore (Switzerland), CMOC Group (China), ERG (Kazakhstan), China Molybdenum (China)	Most cobalt production comes from the Democratic Republic of Congo (DRC). Glencore signed an MoU with the U.S.‑backed Orion consortium to secure DRC copper and cobalt assets.
Rare Earths	China Northern Rare Earth (China), Lynas Rare Earths (Australia), MP Materials (US), Shenghe Resources (China)	China produces ~70 % of rare earths; Lynas is building a heavy‑rare‑earth separation plant in Texas with DoD funding; MP Materials operates the Mountain Pass mine and received Pentagon investment.
Copper	Freeport‑McMoRan (US), Codelco (Chile), BHP (Australia), Glencore (Switzerland), Zijin Mining (China)	Copper demand is expected to grow ~2.6 % per year; supply tightness due to limited new projects and potential U.S. tariffs.

Companies entering or considering entry

Government incentives and rising demand are attracting new entrants and diversification by established firms:

Ramaco Resources (US) – Coal company pivoting to rare‑earth extraction; supported by Department of Energy (DOE) and Wyoming state grants; pilot production planned for 2026.
Lynas Rare Earths (Australia/US) – Building a heavy‑rare‑earth separation plant in Texas to supply non‑Chinese rare‑earth oxides; facility scheduled to open in 2026.
Albemarle Corporation (US) – Reopening the Kings Mountain lithium mine; Pentagon granted US$90 million and DOE US$149.7 million for processing capacity.
Neo Performance Materials (Canada) – Developing a heavy‑rare‑earth magnet plant and gallium recycling hub in Estonia; strong demand due to Chinese export restrictions.
Ucore Rare Metals (US) – Building a RapidSX rare‑earth refinery in Louisiana; aims to supply one‑third of U.S. magnet demand by 2028.
Energy Fuels Inc. (US) – Operating the White Mesa mill in Utah; processes uranium and rare earths and is stockpiling feedstock for magnet makers.
Toyota, Posco, Volkswagen – Large automakers investing in lithium, nickel and cathode materials to secure long‑term battery supply (reported by global news outlets). Reuters noted that Honda faced a US$15.7 billion EV restructuring cost that pressured its profits, encouraging other Japanese automakers to vertically integrate.

Six‑month market overview (Dec 2025 – Jun 2026)

Month & Key events	Highlights and market implications
Dec 2025	Governments emphasise stockpiling. The Pentagon announces plans for a US$1 billion stockpile of cobalt, antimony, tantalum and scandium, while the EU selects 47 projects under the Critical Raw Materials Act to meet 25 % of domestic demand by 2030. German media report that tungsten prices have tripled and lithium prices climbed to >US$22 000/t.
Jan 2026	U.S. Treasury meeting: Washington urges partners (Australia, Canada, EU, India, Japan, Mexico, South Korea, UK, etc.) to reduce dependence on China. These countries account for 60 % of global critical‑mineral demand and recognise that China refines 47–87 % of key minerals.
Feb 2026	Critical Minerals Ministerial (Feb 3–4): The U.S. hosts 54 countries and the EU. Officials stress that the market is highly concentrated and vow to build diversified, end‑to‑end supply chains. The U.S. signs 11 new bilateral MoUs and launches the FORGE forum. Project Vault (US$10 billion EXIM loan) aims to build a domestic strategic stockpile. VOA Chinese reports that the U.S. is creating a price‑floor‑based trade group, and the House passes the Critical Mineral Dominance Act to accelerate domestic production.
Mar 2026	Price‑floor debate: Bloomberg/Reuters report that the U.S., Japan and EU are preparing a trade agreement with minimum prices and tariffs. By mid‑March, the Trump administration retreats from domestic price floors due to funding and legal issues but continues to pursue multilateral price‑stabilisation tools. Lynas and Japanese partners sign an off‑take agreement with a US$110/kg NdPr floor price, translating policy concepts into private contracts. Rio Tinto secures US$1.175 billion financing for its Rincón lithium project in Argentina.
Apr 2026	Several governments finalise critical‑minerals strategies. German media emphasise state stockpiling and diversification; the German Raw Materials Agency suggests building reserves similar to strategic oil stocks. Japan’s Ministry of Economy negotiates supply agreements in Australia and Africa (reported by Reuters). The U.S. continues public consultation on plurilateral price floors.
May – Jun 2026	Market sentiment stabilises. Analysts predict higher metal prices in 2026 compared with 2025 due to easing trade tensions and strong demand from grid expansion, EVs, renewables and storage. BMI forecasts that Western states will scale up investments across the value chain and form new alliances to secure supply chains. However, price volatility remains a risk. Supply chain disruptions (e.g., DRC mining issues, Indonesian nickel policy) could tighten markets, while any slowdown in EV sales or infrastructure deployment could reduce demand.

Outlook (next 6 – 12 months)

Continued policy support and incentives: Governments are expected to finalise the plurilateral price‑floor framework and roll out domestic incentives and loan guarantees. The EU will implement its Critical Raw Materials Act, and Project Vault will start building the U.S. stockpile.
More investment in recycling and substitution: Recycling and circular‑economy programmes could reduce new mining needs by up to 30 %. Companies will invest in scrap collection and advanced processing technologies.
Price stabilisation for lithium and nickel: After steep declines in 2024–2025, prices may stabilise as supply/demand dynamics rebalance. However, the market is likely to remain tight for copper and rare‑earth elements due to limited new projects and persistent demand.
Increased competition for resources: China will maintain dominance in refining, but Western countries will expand their presence in Africa, Latin America and Australia. Private companies and sovereign funds will vie for stakes in new mines, and strategic partnerships (e.g., U.S.–Japan–EU) will shape trade flows.

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