The International Energy Agency (IEA) has said global demand for critical minerals will rise sharply through 2040 as the clean energy transition accelerates. The agency linked the surge to growth in renewable power, energy storage and electric mobility, noting that these technologies require large volumes of metals and rare earth elements. It warned that supply chains are vulnerable because production and processing are concentrated in a few jurisdictions and because expansion of extraction and refining capacity has not kept pace.

The agency said demand will grow fastest for lithium, cobalt, nickel and several rare earth elements that are essential to batteries, electric motors and power electronics. It said that mining alone will not be sufficient to meet projected needs and highlighted the importance of processing and recycling infrastructure to supply refined materials. The analysis emphasised that the timing and scale of investment in new mines and plants will determine whether material bottlenecks emerge.

Production and refining of many of these minerals is concentrated in a small number of countries, creating geopolitical and market risks for buyers and manufacturers. The agency discussed environmental and social challenges associated with rapid expansion of extraction, including land use, water demand and local impacts that require stronger governance and standards. It recommended enhanced international co-ordination and greater transparency across supply chains to reduce strategic vulnerabilities.

To address these challenges, the agency recommended diversifying sources of supply, accelerating investment in processing and refining capacity and scaling up recycling and substitution technologies. It advised policy makers to support investment signals, standards for responsible sourcing and international collaboration to smooth market adjustments. The agency said timely policy responses and coordinated action will be critical to securing reliable access to the minerals needed for net zero transitions, reducing market volatility, protecting communities and supporting investment in recycling capacity.