International Central Asian nations geared up to fulfill the escalating worldwide need for essential minerals.
Global Market Boom of Critical Minerals and Rare Earths
The demand for critical minerals such as copper, lithium, nickel, cobalt, graphite, and rare earth elements is escalating, according to the International Energy Agency's (IEA) latest report, "Global Critical Minerals Outlook 2025."
China dominates the mining and refining sectors, but Kazakhstan leads the production of uranium globally, while Uzbekistan is stepping up its exports of uranium, copper, and other rare earths. The increasing global demand for lithium, a key component in electric vehicle batteries and renewable energy technology, rose by 30% in 2024 compared to the previous year. Other minerals, including cobalt, nickel, and rare earths used in these technologies also saw substantial growth in demand.
The IEA report highlights the impact of the Russia-Ukraine conflict on Kazakhstan's uranium exports, as geopolitical tensions clouding trade have allowed the country to boost its exports despite operational challenges. Additionally, the report acknowledges an Uzbek deal with the United States centering on critical minerals, although the particulars of the deal remain undisclosed.
Kazakhstan may stand to earn significantly more in the coming years if the recent claims by Astana regarding the discovery of substantial rare earth deposits prove accurate. Over the past two years, China has been the largest contributor to demand growth for these critical minerals. China is the world's leading refiner for 19 out of 20 strategic minerals examined in the report.
China's stronghold in the market could pose potential obstacles for the global economy as technology evolves, as per the IEA report. The emergence of battery technologies is challenging the prevalent nickel-based lithium-ion batteries, and these technologies are not immune to supply concentration and volume risks. China produces 75% of the world's purified phosphoric acid, crucial for lithium iron phosphate batteries, and 95% of high-purity manganese sulphate, a key input for manganese-rich and sodium-ion battery chemistries.
As the transition to clean energy technologies progresses, the critical minerals market is projected to grow substantially, with a market size of $328.19 billion in 2024 and a forecasted growth to $586.63 billion by 2032, reflecting a 7.53% compound annual growth rate (CAGR). However, the concentration of critical mineral supply chains in a few countries, primarily China, poses risks to global supply stability, with trade disputes and export restrictions able to trigger supply shocks and inflation.
Countries like India are focusing on developing their independent critical mineral supply chains to lower dependence on dominant players like China, with the number of critical mineral projects increasing from 59 in 2020 to 123 in 2023.
In the context of the Global Market Boom of Critical Minerals and Rare Earths, the finance sector should be vigilant as the increasing demand for critical minerals like lithium, used in environmental-science advancements such as renewable energy technology and electric vehicles, may significantly impact investment portfolios. Furthermore, technological progress in battery production, like the emergence of new technologies challenging nickel-based lithium-ion batteries, could potentially reshape the science and industry landscape, with China's dominance in the refining and production of critical minerals like high-purity manganese sulphate being a key factor.
