Demand growth for critical minerals continues to be strong across all scenarios, almost doubling to 2040 in the Stated Policy Scenario (STEPS). Lithium experiences the strongest growth, rising over threefold to 2040. Demand growth for nickel, graphite and rare earths also continues to be strong, growing from 50% to 90%. Although cobalt demand to 2040 has moderated due to the rapid rise of LFP batteries, this is partially offset by changes within nickel-cobalt-manganese chemistries compared with previous expectations. Energy technologies remain the dominant driver of future demand for these minerals due to the continued deployment of electric vehicles (EVs), battery storage, renewables and electricity networks across all scenarios. Meanwhile, copper records the largest volume growth, adding about 7 million tonnes to 2040, driven by its central role in electricity networks and next generation technologies.

Expected supply from announced projects suggests that market balances have improved or remained broadly stable compared with previous Outlooks, with the notable exception of cobalt. Based on the project pipeline in the base case, projected supply gaps for copper and lithium have narrowed as more projects are expected to come online, with the copper supply gap falling from around 30% to 25%. In contrast, the projected cobalt supply gap widens from just over 15% to over 25%, reflecting expectations around decreased production following the introduction of export quotas by the world’s top producer, the Democratic Republic of the Congo and highlighting the growing influence of policy developments in key producing countries. Although base case sees slight supply gaps for nickel and graphite, there are a host of early-stage projects. If these come online as scheduled, as in the high production case, expected supply would cover demand in almost scenarios.

While recent project announcements signal progress, analysis of project pipelines shows structural imbalances in efforts to promote supply chain diversification. Mining capacity is expanding across diverse regions, but refining and downstream manufacturing capacity remains limited. Rare earth elements exemplify this gap: by 2035, announced mining projects outside the leading producer could deliver nearly 50 kt of capacity, yet planned refining and separation capacity is under 40 kt, mainly in Malaysia and the United States. Downstream capacity is even more constrained, with rare earth metals, alloys, and magnets totalling only about 18 kt (rare earth content basis). Similar trends exist in lithium, where mining growth outside the dominant supplier exceeds existing and planned refining cathode material production capacity. Graphite, nickel, and cobalt face comparable challenges, with midstream and downstream development lagging upstream expansion.

A wide range of minerals serve strategic applications in energy and beyond, spanning high-tech industries like semiconductors, robotics, servers and storage for AI data centres, advanced telecommunications and aerospace and defence. Modern economies are increasingly moving towards electrified, digitalised and automated systems, and the industries that underpin this transformation are mineral-intensive. Beyond bulk materials like copper, steel and aluminium and energy minerals like lithium, high-tech industries also depend on several minor materials like gallium, germanium, indium, silicon, tantalum, tungsten, tin, silver, platinum-group metals and magnet rare earths (neodymium, praseodymium, dysprosium, terbium). Meanwhile, the aerospace and defence sectors use many minerals to produce alloys or superalloys for high-performance materials with high strength and resistance to high temperatures.

To assess the risk exposure of materials essential for high-tech, aerospace and defence applications, we developed a framework based on key criteria, including supply risk, the availability of alternative supply routes and strategic importance. This allows materials to be ranked according to their overall exposure across multiple dimensions of risk. When evaluating supply risk, the first risk dimension, the level of supply concentration in both mining and refining, is a critical measure. Relying on a few dominant suppliers means that any disruption can quickly push markets into shortfall. For gallium, graphite, manganese and rare earths, the top refiner, China, accounts for over 90% of global supply. The availability of alternative supply routes is the second key risk dimension. For some materials, there are limited options for substitute materials, such as chromium for corrosion-resistant stainless steel, titanium for alloys requiring a high strength-to-weight ratio and germanium for high-performance fibre optics, heightening the risks from supply disruptions. Additionally, many materials are produced as co-products or by-products alongside other minerals, making their supply less responsive to demand or price signals. For example, gallium is mainly recovered as a by-product of zinc and aluminium production, tellurium from copper and lead processing, and germanium from zinc and coal. The strategic importance of each material depends on the sectors in which it is used. When materials have applications in strategic sectors such as semiconductors or defence, their security of supply becomes a crucial factor for economic and national security.

Gallium, magnet rare earths, yttrium, graphite, tungsten, germanium, tellurium and cobalt show some of the highest risk exposure scores. Most of these materials are characterised by high supply concentration, limited availability of substitutes and strategic applications, and many are already subject to some form of export restriction. Several of them, such as gallium, magnet rare earths, graphite, cobalt and germanium, play essential roles across a wide range of strategic applications.