As global competition builds for who will win in the advanced energy technology market, the Council has turned its attention to an essential component of the race: critical mineral supply chains. In recent months, we’ve explored this topic in depth in blogs, public comments to the Department of Commerce, and a letter to the administration. Now, we’re giving a broader overview of what critical minerals are and why their supply chains warrant greater attention from industry and policy leaders.
What are critical minerals?
It’s a question that’s not easily answered! That’s because the definition of what qualifies as a critical mineral is not universal. Our own government has several lists for critical minerals, also called “critical materials” or “materials of interest,” which are created by different agencies (like the Department of Energy and the Department of Defense).
That said, a few key aspects are consistent: critical minerals are raw materials that are essential to economic and national security, manufacturing products, and are vulnerable to disruption. Think of lithium, cobalt, rare earth elements, and nickel.
From mine to manufacturer
Critical minerals are mined throughout the world, but there are especially large natural deposits across Asia, Oceania, Latin America, and Africa. Mined minerals go through a series of steps: extraction, processing, and transport. These steps can happen in completely different locations. For example, China does up to 70% of the world’s cobalt refining even though they don’t have domestic cobalt mines—which are predominantly found in the Democratic Republic of Congo.
Once the minerals are processed into usable materials, they are sent to manufacturers (often crossing borders again) to be built into a countless variety of products.
Why are we talking about supply chains?
These inputs are the backbone of many advanced economies, but the journey from mine to marketplace is replete with risks. Most critical minerals are produced and processed in just a handful of countries, leaving supply chains at risk to political tensions, market shifts, or even natural disasters.
In fact, the U.S. currently lacks substantial domestic production and refining capacity, leaving the nation entirely dependent on imports for 12 critical minerals and over 50% dependent for 28 others. For key materials like lithium, graphite, cobalt, rare earth elements, and nickel, more than 60% of global supply comes from just one to three (often politically unstable) countries. As global demand rises and geopolitical tensions increase, policymakers and industry leaders are placing increased emphasis on efforts to enhance supply chain security.
The role of critical minerals in advanced energy technologies
Supply chain vulnerabilities have direct implications for the path to climate progress. Critical minerals are essential for a wide range of advanced energy technologies, from solar panels and electric vehicles to batteries and power grids. With demand for these minerals projected to double by 2030 and quadruple by 2040, the International Energy Agency and other leading organizations have underscored the need for a massive increase in the availability of critical minerals to meet increasing advanced energy demand.
The international market for advanced energy technologies is projected to reach $130 trillion by 2050, offering enormous potential for economic growth and technological leadership. Proactive policies and strategic partnerships with allied nations can further expand access and drive investment, ensuring that the U.S. not only meets its own needs but also becomes a global leader.
Supply chain security is tied to other national priorities, too
The stakes extend far beyond lowering global emissions. Critical minerals are the building blocks for all the advanced technologies we rely on, including cars, chips, optical equipment, automation, and more. Consequently, securing critical minerals is vital to economic growth, job creation, technological leadership, and national security.
Strengthening critical mineral supply chains will bolster national defense, too, as military systems rely on these materials just similar to other advanced technologies. By embracing this opportunity, the U.S. can turn a strategic challenge into a springboard for long-term prosperity, security, and global influence.
A combination of approaches is needed to secure our supply
While domestic production and refining are currently limited, this challenge opens the door for domestic investments, international partnerships, and American innovation to build resilient supply chains. By developing our own capacity to mine, process, and recycle critical minerals, the U.S. can stabilize access for manufacturers, create high-quality jobs, and position itself as a reliable supplier in the global marketplace.
Forming international partnerships also enables us to fund mutually beneficial relationships with allied countries to responsibly develop key resources. At the same time, unleashing American innovators means we can rely on fewer, more reliable resources to make high-end tech products.
How the Council approaches critical minerals
A broad set of policy tools can help secure critical mineral resources, diversify supply, and stabilize the often-volatile critical mineral markets. These tools generally fall into three broad categories:
- Maximizing our ability to produce, process, and manufacture in the U.S.
- Leveraging international partnerships to bring in new sources of supply and increase investment
- Leaning into innovation to lower costs, reduce needs, improve recycling, and cultivate new breakthroughs for advanced technologies
The Council is currently working with stakeholders to explore recommendations across this portfolio, with an emphasis on using trade tools to increase investment, coordinate with other market-based economies, and maximize investments in innovation across the supply chain. With smart policies and strong partnerships, the U.S. can secure supply chains, compete in the global marketplace, and lower global emissions.