PARIS, July 16, 2026 (IEA): The International Energy Agency (IEA) has warned that increasing concentration of critical mineral supplies, expanding export restrictions and declining investment are posing significant risks to global energy security and the clean energy transition, despite some encouraging progress in supply chain diversification.
In its 2026 Global Critical Minerals Outlook, released on Thursday, the IEA said supply chains for key energy minerals—including copper, lithium, nickel, cobalt, graphite and rare earth elements—remain highly concentrated, leaving countries vulnerable to geopolitical tensions and market disruptions.
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According to the report, prices of critical minerals rebounded in 2025 and early 2026 after several years of decline as tighter supply conditions and a wave of export restrictions from major producing countries pushed markets higher. At the same time, investment in critical minerals fell by 9 percent in 2025, ending several years of steady growth.
The agency noted that supply concentration has intensified, particularly in mineral refining. Over the past two years, Indonesia accounted for more than three-quarters of global growth in refined nickel production, while China dominated refining growth for most other key energy minerals. In markets such as manganese, nickel and graphite, nearly all recent supply growth originated from the leading supplier.
Despite these challenges, the report highlights positive developments driven by stronger government support for supply diversification. Public financing commitments for critical mineral projects increased more than fourfold between 2023 and 2025, reaching $65 billion.
The IEA said new rare earth refining projects in the United States, combined with higher production in Malaysia, reduced the market share of the largest supplier from more than 90 percent in 2023 to 85 percent in 2025. If planned projects proceed as scheduled, that share could decline to around 70 percent by 2035.
Meanwhile, the outlook for copper and lithium has improved as new mining projects narrow the expected gap between future demand and supply over the next decade.
However, the report cautioned that diversification efforts remain uneven. While investment has expanded in mining projects, development of refining facilities and downstream manufacturing capacity continues to lag. In the rare earth sector, planned refining capacity is expected to reach only about two-thirds of projected mine output by 2035, while planned magnet production would account for just one-third of anticipated demand.
The IEA also warned that the rapid expansion of export controls has transformed concerns over concentrated supply into an immediate economic security challenge. China’s export controls on rare earth materials, introduced in April 2025 and expanded later that year, have already disrupted global manufacturing, forcing some automakers to reduce production or temporarily suspend operations.
Although implementation of the expanded restrictions has been delayed by one year, the agency estimates that up to $6.5 trillion in annual downstream industrial production outside China could be at risk if the measures are fully enforced.
The report urges governments to pay greater attention to strategic minor minerals, arguing that although their markets are relatively small, supply disruptions could have disproportionately large economic consequences. It suggests that stronger international cooperation and targeted policy support could significantly enhance supply security at a relatively modest cost.
IEA Executive Director Fatih Birol said the agency’s latest analysis demonstrates that enormous economic value depends on relatively small quantities of critical minerals whose supply chains remain highly concentrated.
He noted that recent progress in rare earth supply chains shows that targeted government policies and investment support can strengthen resilience. While diversified supply chains may increase costs, he said such expenses should be viewed as a “mineral security premium” that provides economic protection against geopolitical and supply risks.
According to the report, critical minerals generally represent only a small share of the final cost of clean energy technologies. They account for around one-quarter of battery cell costs but only about 3 percent of the price of an average electric vehicle, while rare earth materials make up around 40 percent of permanent magnet costs but less than 1 percent of a vehicle’s total value.
The IEA stressed that strengthening mineral security will require more than developing new mining projects. Governments must also address shortages in processing technology, specialized equipment and skilled workers to build resilient and diversified supply chains.
The report includes new policy recommendations aimed at improving emergency preparedness, encouraging investment and closing technology, equipment and workforce gaps as countries seek to secure supplies of minerals essential for the global energy transition.
