The global transition to renewable energy and electric vehicles is creating an unprecedented surge in demand for critical minerals, as extracting and processing capacity struggles to keep pace with the accelerating demand for energy transition technologies.
Minerals including lithium, cobalt, nickel, and rare earth elements have become the backbone of the clean energy economy, serving as essential components in lithium-ion batteries, photovoltaic solar panels, hydrogen electrolysers, electric motors and wind turbines. The exponential growth in these technologies, driven by countries pursuing net-zero emissions targets and energy security goals, is creating supply-demand imbalances that threaten to constrain the energy transition itself.
Lithium faces the most dramatic supply-demand mismatch, with S&P Global Market Intelligence forecasting global lithium demand to reach 3.29 million mt by 2035, nearly tripling from 1.23 million mt in 2024. This surge, primarily driven by accelerating battery electric vehicle adoption, is expected to create an annual supply deficit of approximately 416,000 mt by 2035, highlighting the scale of capacity expansion required to meet the anticipated growth in demand.
Copper – vital across renewable technologies, electrification and construction applications– faces similarly challenging supply dynamics. Demand is forecast to increase to 33.55 million mt by 2035 from 28.86 million mt in 2024, with annual supply projected to fall 692,000 mt short of corresponding demand. This deficit reflects the metal's critical role in power transmission, EVcharging infrastructure, and renewable energy installations.
Global markets for nickel, cobalt, graphite and manganese are also expected to experience substantial deficits by 2035, driven by insufficient capacity additions relative to surging demand for lithium-ion batteries across automotive, grid storage, and consumer electronics applications.
These projected shortfalls underscore the urgent need for accelerated mining investment and supply chain diversification, particularly within the context of Africa’s mineral resources.
China dominates extraction, processing of critical minerals
China's state-owned enterprises have established commanding control over critical mineral extraction and processing operations, enabling Beijing to dominate downstream manufacturing of renewable energy technologies and granting China competitive advantages over Western economies. The dominance extends across the entire value chain from mining to manufacturing, with Chinese state-owned companies controlling the vast majority of global minerals extraction and refining capacity and end-use manufacturing. This vertical integration allows China to maintain outsized influence over the production of EVs, photovoltaic solar panels, wind turbines and hydrogen electrolyzers, technologies essential to global decarbonization efforts.
China's strategic position in critical mineral supply chains, built through decades of systematic investment and industrial policy, has prompted the US, European Union and other leading economies to reassess their economic and supply chain strategies to remain competitive.
Beijing has demonstrated its willingness to use this advantage to support its wider economic interests through the implementation of export controls targeting materials where it holds dominant positions. Recent restrictions have been imposed on graphite, germanium, gallium, bismuth, tungsten, tellurium, indium and molybdenum – all critical inputs for advanced technologies including semiconductors, defense systems, and renewable energy equipment.
The export control measures underscore how China's mineral dominance translates into geopolitical leverage, with Beijing able to influence access to materials essential for technological competitiveness. Graphite controls are particularly significant given the mineral's essential role in lithium-ion battery anodes, while germanium and gallium restrictions impact semiconductor and solar panel production.
These dynamics have intensified Western efforts to diversify critical mineral supply chains and reduce dependence on Chinese sources. However, the scale of China's processing dominance means alternative supply chains will require years to develop and substantial investment to achieve meaningful diversification from Chinese sources.
China drives Africa’s battery metals buildout
Africa has become the epicenter of an intensifying global competition for critical minerals, as countries scramble to secure supply chains for the materials required to power the energy transition.
The continent's strategic importance has surged as it accounts for approximately 30% of the world's mineral resources, many of which are classified as critical for battery manufacturing and clean energy infrastructure. With global demand for lithium, graphite, cobalt, copper and manganese projected to increase exponentially over the next decade, African nations are positioning themselves as indispensable suppliers of critical minerals.
The Democratic Republic of Congo exemplifies Africa's outsized role in critical mineral supply chains. S&P Global Market Intelligence estimates that the DRC accounts for more than 70% of global cobalt production and approximately half the world's proven reserves, making it a crucial link in the battery supply chain that powers electric vehicles and energy storage systems.