Recent price trends have emphasised the need for policy intervention to enhance critical mineral supply reliability and resiliency. In the past year, the prices of many minerals and metals have soared as a result of rising demand, supply chain disruptions and concerns about tightening supplies.

In addition to these risks, production and processing operations for many minerals are highly concentrated in a small number of countries. Although investment in supply source diversification is rising, most near-term output growth for many minerals is still expected to come from today’s major producers, implying an even higher degree of concentration in the years ahead. 

This high level of concentration means the system is particularly vulnerable to disruptions – caused by geopolitical events, global pandemics, earthquakes or other weather events, or shutdowns associated with adverse environmental, social or governance incidents (such as regulatory interventions following corruption allegations). Any disruption that interrupts operations at a large facility or group of facilities can have a major impact on supply availability, and therefore on prices. 

One of the first challenges many governments face is deciding which minerals should be deemed critical and therefore covered by targeted policies that aim to secure reliable and resilient supplies. In fact, many countries have already published official critical mineral lists.

While the IEA report The Role of Critical Minerals in Clean Energy Transitions focuses on just the minerals required for clean energy technologies, governments typically consider the energy sector as just one element among many in compiling official lists of strategic or critical minerals.

Although all the mineral lists contain common threads, they still vary considerably because countries use different criteria as the basis for national prioritisations. The most common criterium is whether a particular mineral is of significant importance to the national economy, but other key criteria include whether its supply chain is subject to high risk of supply disruption, whether it is important for national defence or security, and whether the country has significant untapped reserves. Criteria diversity reflects the differences in countries’ development priorities and industry needs.

Major producer countries tend to focus on the importance of mineral exploitation to their economy and trade balances. The Democratic Republic of the Congo (DRC), for example, issued a decree listing three minerals as strategic – cobalt, germanium and columbite-tantalite (“coltan”) – of which the DRC has significant reserves. Following this designation, the country now legislates conditions for access, exploration and commercialisation of these minerals under a separate framework.

Meanwhile, importing economies typically focus on identifying which minerals are necessary for important or strategic sectors of the economy and for which demand far outstrips domestic production. The European Union’s Critical Raw Materials List, for example, includes materials deemed critical to maintain a healthy economic system and whose supply may be at risk because of geopolitical, geographical, geological or other factors. The list includes battery materials (e.g. lithium, cobalt, graphite), rare earth elements, and several other minerals that EU countries do not produce in significant quantities. It is updated every three years to reflect industry developments and supply changes.

Some countries try to address all potentialities when identifying critical minerals. In Brazil, for example, three categories of minerals are considered strategic: minerals that are imported in large quantities and that supply vital sectors of the economy (e.g. molybdenum and phosphate); minerals important for the manufacture of high-tech products (e.g. cobalt and graphite); and minerals essential for the economy because they generate a trade balance surplus (e.g. aluminium, copper and iron).

These lists are not static, however, as they can be updated to reflect a country’s changing priorities. The United States generally focuses on minerals that are prone to supply chain disruptions and that are critical for either national security or economic development. Thus, fuel minerals such as uranium were removed in the latest revision to the US critical minerals list and rare earth minerals were unbundled and are now listed separately as cerium, gadolinium, lanthanum, neodymium, praseodymium and samarium.