The International Energy Agency (IEA) said global investment in critical minerals fell by nine per cent in 2025 even as demand from clean energy technologies surged, creating a widening gap between financing and need. The agency reported that investment declined across multiple stages from exploration to processing, hitting projects that are crucial for batteries, electric vehicles and renewable energy systems. Despite strong demand, the pace of new project starts slowed and capacity expansions were postponed.

IEA analysis attributed the decline primarily to elevated financing costs and tighter capital markets, which increased the cost of developing new mines and processing facilities. The report also cited persistent permitting delays and complex environmental assessments that lengthened timelines, while inflationary pressures raised capital and operational expenses. Commodity price volatility reduced investor appetite for longer horizon projects.

The agency warned that sustained underinvestment risks creating supply bottlenecks for lithium, nickel, cobalt and rare earth elements, with knock-on effects for battery supply chains and the deployment of renewable capacity worldwide. It said that unless investment rebounds, higher commodity prices and greater volatility could emerge, complicating efforts to meet net zero targets and energy security objectives. Governments and industry will need to coordinate to close financing gaps.

IEA recommendations included clearer policy signals, faster permitting processes and targeted public finance to de-risk early stage projects and attract private capital. The agency highlighted the importance of international cooperation to diversify supply chains and build processing capacity closer to demand centres. It concluded that reversing the investment decline is essential to align mineral supply with the growing requirements of the clean energy transition. The agency urged policymakers to implement predictable tax and royalty frameworks and support skills and infrastructure development to accelerate project delivery.