As the world’s energy system transforms at unprecedented speed, so too must our understanding of energy security. While governments continue to focus on securing supplies of traditional fuels such as oil, gas and coal, new vulnerabilities are emerging – and critical minerals are rapidly becoming a central concern.

“The recent blackout on the Iberian peninsula was a stark reminder of how vital electricity security is,” said Fatih Birol, Executive Director of the International Energy Agency (IEA), in a comment that first appeared in the Financial Times. “But energy security today extends beyond fuels and grids. It now includes the minerals needed for everything from solar panels to electric vehicles [EVs].”

Many of the same minerals essential to clean energy technologies also underpin sectors like electronics, defence and aerospace. “Rare earth elements are crucial for wind turbines, electric vehicles, robots and drones. Minerals like zirconium and boron play vital roles in both nuclear power and jet engines,” Birol noted.

Concerns are intensifying over the geographical concentration of supply and processing. “From an energy security perspective, the picture is not reassuring,” Birol warned. “One of our golden rules at the IEA is diversification. Yet for the six major energy-related critical minerals – copper, lithium, nickel, cobalt, graphite and rare earths – we are moving in the opposite direction.”

Since the IEA’s 2021 landmark report on the subject, market concentration has deepened. “The average market share of the top three producers has risen to nearly 90%. Even with all planned projects globally, this concentration is expected to ease only slightly over the next decade,” Birol said.

The report sees risks with supply and demand balances over the next decade. Lithium demand rose by nearly 30% in 2024, significantly exceeding the 10% annual growth rate seen in the 2010s. Copper supplies are particularly problematic. With demand set to surge as countries look to expand their electricity networks, the current copper mine project pipeline points to a 30% supply deficit by 2035, according to the IEA. However, major supply increases – led by China, Indonesia and parts of Africa – have put downward pressure on prices, especially for battery metals. Since 2020, supply growth for battery metals has been twice the rate seen in the late 2010s.

Investment momentum in critical minerals has weakened: spending grew by just 5% in 2024, down from an increase of 14% in 2023. Exploration activity plateaued in 2024, marking a pause in the upward trend seen since 2020, and start-up funding showed signs of a slowdown.

China’s dominance in mineral refining is especially stark. “For a remarkable 19 out of 20 strategic minerals, China is the leading refiner, with an average market share of 70%,” Birol said. Many of these minerals are now subject to export controls, not only as raw or refined materials, but increasingly as processing technologies.

While markets are currently well supplied, this has pushed prices down, deterring investment and jeopardising future supply security. “New entrants are hardest hit, and long lead times for projects mean delays today could lead to shortages tomorrow,” he cautioned.

Birol emphasised the need for international cooperation and policy support. “Projects outside incumbent regions often face capital costs up to 50% higher. Tools like price-stabilisation mechanisms, demand guarantees and environmental incentives are needed to unlock supply.”

Technology can also help. “AI-driven geological analysis can reduce drilling costs by up to 60% and quadruple discovery success rates,” Birol said. “Strategic partnerships could significantly shift supply concentration – for example, incentives for cleaner nickel production alone could cut global market concentration by 7% within 10 years.”

The IEA is expanding its efforts to monitor markets, support project development and bolster resilience. But Birol concluded with a warning: “Left to their own devices, markets will not deliver the level of diversification needed. Governments and industry must act together – with urgency and resolve – to ensure the foundations of tomorrow’s energy system are secure.”