Critical Minerals: Investment Slowdown & Demand Outlook – IEA
Investment in critical minerals slowed significantly in 2024, despite robust demand, according to the IEA’s latest report. The primary_keyword, “critical minerals,” faces uncertainty as economic headwinds and market fluctuations stymie growth, with real investment rising a mere 2%. The report highlights a growing geographic concentration in refining and processing, with key secondary_keyword, “energy minerals,” prices plummeting to pre-pandemic levels. This shift raises concerns about supply chain diversification,especially for essential materials like lithium and cobalt. news Directory 3 readers should consider that the expansion of battery metal production has outpaced conventional metals, fundamentally altering the landscape. Discover what’s next for these vital components of our energy future.
Critical Minerals Investment Faces Uncertainty Despite Strong Demand
Updated June 08, 2025
Despite expectations of strong future demand, investment decisions in teh global critical mineral sector are facing market and economic uncertainties, according to the International Energy Agency (IEA). The IEA’s Global Critical Minerals Outlook 2025 noted that investment momentum in critical minerals development only rose by 5% in 2024, a notable drop from the 14% increase seen in 2023.
Adjusted for cost inflation, real investment growth was just 2%, reflecting growing economic and market uncertainties. Exploration activity has plateaued after consistent growth as 2020. While spending increased for lithium, uranium, and copper, it declined sharply for nickel, cobalt, and zinc. Funding for startups has also slowed.
Lower mineral prices have failed to trigger new investments and have affected projects led by new market entrants. Diversification is essential for energy security, but the critical minerals world has moved in the opposite direction, especially in refining and processing.
Growth in refined material production between 2020 and 2024 was heavily concentrated among the leading suppliers. Consequently,the geographic concentration of refining has increased across nearly all critical minerals,particularly for nickel and cobalt.
The average market share of the top three refining nations of key energy minerals rose from about 82% in 2020 to 86% in 2024. Approximately 90% of supply growth came from a single top supplier: Indonesia for nickel and China for cobalt, graphite, and rare earths.
Despite surging demand,significant supply expansions,primarily from China,Indonesia,and the Democratic Republic of the Congo,have driven prices down,especially for battery metals. The rapid increase in battery metal production highlights the sector’s ability to scale up new supply more quickly than customary metals like copper and zinc. Since 2020, supply growth for battery metals has been twice the rate seen in the late 2010s.
following sharp price surges in 2021 and 2022, prices for key energy minerals have continued to decline, returning to pre-pandemic levels. Lithium prices, which had surged eightfold during 2021-22, have fallen by over 80% as 2023. Graphite, cobalt, and nickel prices also dropped by 10% to 20% in 2024.
Critical minerals such as copper, lithium, nickel, cobalt, and rare earth elements are essential components of many rapidly growing energy technologies, including wind turbines, electricity networks, and electric vehicles. Demand for these materials is growing quickly as energy transitions accelerate, making critical mineral investment a key area to watch.
What’s next
The IEA suggests that future strategies must focus on diversifying supply chains and encouraging investment in a wider range of projects to ensure stable access to critical minerals for the energy transition.