Critical Materials


Critical materials form the upstream foundation of the electrification and clean energy supply chain. They include the strategic elements identified by governments as essential to national security and economic competitiveness, as well as the raw and refined forms that flow into batteries, motors, power electronics, and renewable energy systems.

1. Critical Elements

Governments maintain official "critical materials" lists, identifying those that are essential, have high supply chain risk, or are concentrated in specific regions. For electrification and AI-era manufacturing, the following elements are most relevant:

Battery Metals
Lithium, Nickel, Cobalt, Manganese, Graphite
Uses: EV and stationary batteries (cathodes/anodes)
Risks: China dominates graphite refining; cobalt concentrated in DRC

Conductors
Copper, Aluminum, Silver
Uses: Transmission lines, motors, inverters
Risks: Copper supply tight, silver demand rising for solar PV

Critical Semiconductors Inputs
Silicon, Gallium, Germanium, Indium
Uses: Chips, power electronics, LEDs, solar PV
Risks: China controls gallium/germanium refining

Rare Earth Elements (REEs)
Neodymium, Dysprosium, Terbium, Praseodymium
Uses: Permanent magnets for EV motors, wind turbines
Risks: >80% processed in China

Platinum Group Metals (PGMs)
Platinum, Palladium, Iridium
Uses: Fuel cells, catalysts, electrolysis for green H2
Risks: Limited global supply, South Africa dominant

2. Raw / Extracted Materials

The first step in the chain is physical extraction of ores, brines, and concentrates. Mining is geographically concentrated, with geopolitical risk and environmental concerns often shaping supply.

Lithium
Brines, hard rock (spodumene)
Producers: Australia, Chile, Argentina, China
Notes: Brine vs hard rock has different cost/processing pathways

Nickel
Sulfide ores, laterite ores
Producers: Indonesia, Philippines, Russia, Canada
Notes: Laterite ores require energy-intensive refining

Cobalt
Byproduct of copper/nickel mining
Producers: DRC, Russia, Australia
Notes: 70% mined in DRC, often artisanal mining

Graphite
Natural flake, synthetic graphite
Producers: China, Mozambique, Madagascar
Notes: Synthetic graphite energy-intensive to make

Copper
Sulfide and oxide ores
Producers: Chile, Peru, China, U.S.
Notes: Copper is a bottleneck for grid expansion

Rare Earths
Bastnäsite, monazite ores
Producers: China, USA, Myanmar
Notes: Most separated/refined in China

3. Refined / Processed Materials

Refining turns raw ores into high-purity feedstocks usable in batteries, semiconductors, and electrification equipment. Processing capacity is often more concentrated than mining itself, creating bottlenecks.

Lithium Carbonate / Hydroxide
From spodumene/brine
Producers: China, Chile, Argentina, Australia
Notes: Cathode precursor for batteries

Battery-Grade Nickel Sulfate
From sulfide/laterite ores
Producers: China, Indonesia, Finland
Notes: Cathodes (NMC, NCA)

Cobalt Sulfate
From Cu/Co concentrates
Producers: China, DRC, Finland
Notes: Battery cathodes

Spherical Graphite
Purified, shaped natural graphite
Producers: China, U.S. (emerging), Europe (planned)
Notes: Battery anodes

High-Purity Alumina (HPA)
From bauxite/kaolin
Producers: China, Australia
Notes: LED, semiconductors, separators

Rare Earth Oxides & Alloys
Separation + refining
Producers: China, U.S. (limited), Australia
Notes: Magnets for EV motors/wind turbines

Polysilicon
From quartz/silica
Producers: China, U.S., Germany
Notes: Solar PV wafers, semiconductors

Key Takeaways


  • Concentration Risk: Mining may be distributed, but refining is often highly concentrated in China (esp. graphite, REEs, lithium, nickel, cobalt).
  • Strategic Vulnerability: These upstream stages represent some of the highest supply chain risks for EVs, batteries, AI data centers, and clean energy deployments.
  • Reshoring & Diversification: U.S. and allied nations are investing heavily in domestic mining, refining, and recycling to reduce dependence.
  • Environmental Footprint: Mining and refining are energy- and water-intensive, with significant ESG implications — making recycling a parallel strategic pathway.



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