Highlights

  • The IEA expects critical-mineral demand to nearly double by 2040 under stated policies.
  • Lithium demand is projected to grow more than threefold by 2040.
  • Copper demand is projected to increase by about seven million tonnes.
  • Announced projects have narrowed the projected copper supply gap.
  • Refining and processing capacity remain less diversified than mining capacity.
  • Trade and industrial policies increasingly influence supply-chain investment.

The global competition for critical minerals is shifting from the discovery of deposits to the ability to process materials into products that manufacturers can use. Copper, lithium, nickel and rare earths are central to electricity networks, batteries, digital infrastructure and industrial technology. Demand is expected to expand over the coming decades, but new mines alone cannot guarantee reliable supply. The International Energy Agency’s 2026 critical-minerals outlook highlights the growing importance of refining, manufacturing and policy decisions.

Latest Policy Moves Put Supply Security Back in Focus

On 23 October 2026, the United States designated helium a critical material, citing its role in semiconductor manufacturing and exposure to international supply disruptions. The move illustrates how industrial security now extends beyond battery minerals to specialist inputs used in electronics, medical equipment and energy technology. Meanwhile, 26 October metals-market reporting showed zinc reaching a two-week high as tight inventories supported prices, even as copper faced pressure from rising exchange stocks and demand concerns. These contrasting developments reinforce the importance of distinguishing short-term price moves from the longer-term concentration of processing and supply chains.

Electrification Drives the Long-Term Demand Story

Under the IEA’s stated-policy scenario, aggregate demand for critical minerals almost doubles by 2040. Lithium is projected to record the strongest increase, with demand rising more than threefold. Nickel, graphite and rare-earth demand is also expected to grow strongly. Electric vehicles, energy storage, renewable generation and electricity grids remain major drivers. The expansion of data centres and other digital infrastructure adds another dimension to mineral requirements.

Copper Occupies a Distinct Position

Copper is central to power networks, electrical equipment and industrial systems. The IEA projects the largest absolute increase in demand for copper among the minerals assessed, adding approximately seven million tonnes by 2040. This does not imply that demand will rise in a straight line: economic growth, construction cycles and investment spending will still affect annual consumption. However, the long-term requirement for grid expansion makes copper supply planning strategically important.

More Projects Do Not Remove All Supply Risk

The pipeline of announced projects has improved the projected market balance for several minerals. The IEA estimates that the copper supply gap in its base case has narrowed from around 30% to 25%, while the outlook for lithium has also improved. These are projections, not confirmed future shortages. Mine approvals, financing, construction timelines and operating performance will determine how much planned capacity becomes actual production.

Processing Remains the Weak Link

New mining projects are being developed across a wider set of countries, but refining and downstream manufacturing remain concentrated. Rare earths illustrate the problem: announced mining capacity outside the leading producer exceeds the capacity planned for refining, separation and magnet manufacturing. Similar mismatches affect lithium and other battery materials. Without processing capacity, a country can mine ore yet remain dependent on overseas facilities to turn it into usable industrial inputs.

Industrial Policy Reshapes Investment Decisions

Governments are seeking to diversify mineral supplies for energy security, manufacturing and strategic industries. Support for domestic processing can encourage investment, but projects must still contend with high capital costs, skilled-labour requirements and competitive international markets. Export restrictions and production quotas can also change expected supply. The IEA notes that the projected cobalt supply gap has widened, reflecting developments in the Democratic Republic of the Congo.

What the Next Decade Will Test

The challenge is to develop complete supply chains rather than isolated mining assets. Progress will depend on permitting, infrastructure, electricity costs, financing and the pace at which processing plants reach commercial operation. The balance between diversification and economic efficiency will shape how resilient the next generation of mineral supply networks becomes.

Critical minerals are becoming a strategic macroeconomic priority. Future resilience will depend as much on refining and manufacturing investment as on the volume of minerals identified underground.