Global demand for critical minerals is surging as the energy transition gathers pace, but looming supply shortages and growing concentration of refining capacity threaten to become one of the biggest challenges to achieving net-zero targets, according to the International Energy Agency (IEA).
The IEA's Global Critical Minerals Outlook 2026 report showed that around 75% of demand growth for key energy minerals, including copper, lithium, nickel, cobalt, graphite and rare earth elements, came from the energy sector in 2025.
The share stood at around 70% in 2024, with demand driven primarily by electric vehicle batteries, energy storage systems, electricity grids, wind turbines and solar power technologies.
The report said demand for key energy minerals has significantly outpaced that for base metals such as aluminum, lead and zinc, with annual demand increasing by around 10% in recent years.
According to the report, Indonesia led growth in refined nickel production, while China dominated refined output growth across most other key energy minerals. Together, the two countries accounted for more than three-quarters of the increase in global refined supply between 2023 and 2025.
As a result, concentration in energy mineral refining reached a new record in 2025. The average market share of the largest refined producer increased from around 70% in 2020 to approximately 72% in 2025, supported by China's investments in lithium chemical processing and Indonesia's expansion of integrated nickel-processing industrial zones.
- Mineral reserves expands sharply
The report also highlighted a significant increase in reserves of key energy minerals over the past 15 years.
Between 2010 and 2025, estimated reserves of copper, lithium, nickel, cobalt, natural graphite and rare earth elements increased by an average of 120%.
Natural graphite recorded the strongest reserve growth, while lithium reserves expanded under the leadership of Chile, Australia and Argentina. Indonesia's share of global nickel reserves also rose from around 5% in 2010 to more than 40% in 2025.
The report said demand for minerals essential to energy technologies is expected to remain robust as the global energy transition accelerates, adding that investment in mining and refining capacity will continue to shape the future of these markets.
Founder of the Turkish Critical Minerals Initiative Sait Uysal told Anadolu that energy technologies have become the primary driver of critical mineral demand, while geopolitical tensions have further accelerated the trend.
"Ongoing wars are significantly fueling demand for critical minerals," he said, adding that recent disruptions in oil markets have reinforced the shift toward electric vehicles.
Uysal said electric vehicles remain the largest source of demand, while the expansion of renewable energy and energy storage is strengthening the trend.
"Although alternative storage technologies are emerging, lithium batteries will remain the dominant technology for electric vehicles and energy storage systems over the next decade," he said, adding that demand for minerals used in lithium batteries is expected to grow the fastest.
- Supply shortages likely despite new projects
Uysal said demand for copper is also expected to increase alongside growing electrification, noting that developing a new copper mine takes an average of 17 years from discovery to production.
"We expect copper to become much more critical in the coming years, and this will inevitably be reflected in prices," he said.
While some critical minerals are currently in oversupply, Uysal warned that supply shortages could still emerge.
"Even if all projects planned through 2035 are completed on schedule, shortages are still expected for some critical minerals," he said, arguing that the geographical concentration of supply poses a greater risk than the availability of reserves.
According to Uysal, the main challenge is not the availability of mineral resources but the pace of developing new mines and refining capacity, as well as the concentration of processing in a limited number of countries.
"The real question is not whether supply bottlenecks will emerge, but which mineral will be affected, when they will occur and how severe they will be," he said.
He added that countries need clear strategies to reduce their dependence on a limited number of suppliers while accelerating the global energy transition.
By Basak Erkalan Koprubasili
Anadolu Agency
energy@aa.com.tr
