Critical Minerals Take Center Stage in Global Supply Chain Strategies

Governments and industries worldwide are focusing on critical minerals due to their essential role in manufacturing and clean energy technologies, as well as concerns over supply chain vulnerabilities.

The U.S. Energy Act of 2020 defines critical minerals as non-fuel minerals that are vital for economic or national security, serve key functions in manufacturing, and have supply chains at risk of disruption. The U.S. Geological Survey’s 2025 list identifies 60 minerals that meet these criteria, reflecting the growing importance of these resources in modern economies.

Critical minerals are required for the production of electric vehicle batteries, wind turbines, solar panels, and energy storage systems. These materials are also used in electronics, defense, and heavy industry, making them central to multiple sectors.

China has established a dominant position in the processing of many critical minerals, refining over half of the world’s lithium, two-thirds of its cobalt, one-third of its nickel, and nearly all rare earth elements. This concentration of processing capacity has prompted other countries to seek alternatives and strengthen their own supply chains.

What the numbers show

• The U.S. Geological Survey lists 60 critical minerals for 2025
• China supplies up to 74% of the EU’s neodymium and praseodymium
• Demand for critical minerals is projected to triple by 2040

The European Union relies entirely on imports for all 17 rare earth elements and fully imports 10 out of its 26 designated critical minerals. China is the main supplier for many of these materials, including key rare earths used in advanced technologies.

Japan has taken steps to diversify its sources by retrieving rare earth-rich sediment from the seabed near Minamitorishima at a depth of nearly 6,000 meters, marking a world-first in deep-sea rare earth recovery. This effort is part of broader initiatives to secure alternative supplies.

Australia announced the creation of a strategic mineral reserve valued at approximately AU$1.2 billion to support 31 essential minerals and reduce dependency on Chinese processing. Similar actions are being taken by other countries to address potential supply disruptions.

The U.S., Japan, Mexico, and the EU are developing partnerships aimed at securing critical mineral supply chains and decreasing reliance on China’s processing capabilities. The Minerals Security Partnership, which includes 14 countries and the EU, seeks to establish stable supply chains with high environmental, social, and governance standards.

Industry reaction

Japan and Britain announced an agreement to increase cooperation on critical minerals supply chains in response to evolving geopolitical conditions.

According to official statements, several governments have confirmed new partnerships and reserves to strengthen access to essential minerals and reduce supply chain risks.

* This article is based on publicly available information at the time of writing.