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The Critical Minerals to China, EU, and U.S. National Security

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The Critical Minerals to China, EU, and U.S. National Security

The Critical Minerals to China, EU, and U.S. Security

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Governments formulate lists of critical minerals according to their industrial requirements and strategic evaluations of supply risks.

Over the last decade, minerals like nickel, copper, and lithium have been on these lists and deemed essential for clean technologies like EV batteries and solar and wind power.

This graphic uses IRENA and the U.S. Department of Energy data to identify which minerals are essential to China, the United States, and the European Union.

What are Critical Minerals?

There is no universally accepted definition of critical minerals. Countries and regions maintain lists that mirror current technology requirements and supply and demand dynamics, among other factors.

These lists are also constantly changing. For example, the EU’s first critical minerals list in 2011 featured only 14 raw materials. In contrast, the 2023 version identified 34 raw materials as critical.

One thing countries share, however, is the concern that a lack of minerals could slow down the energy transition.

The Critical Minerals to China, EU, and U.S. Security

With most countries committed to reducing greenhouse gas emissions, the total mineral demand from clean energy technologies is expected to double by 2040.

U.S. and EU Seek to Reduce Import Reliance on Critical Minerals

Ten materials feature on critical material lists of both the U.S., the EU, and China, including cobalt, lithium, graphite, and rare earths.

Mineral / Considered Critical🇺🇸 U.S.🇪🇺 EU🇨🇳 China
Aluminum/ bauxiteYesYesYes
AntimonyYesYesYes
CobaltYesYesYes
Copper YesYesYes
FluorsparYesYesYes
GraphiteYesYesYes
LithiumYesYesYes
NickelYesYesYes
Rare earths YesYesYes
TungstenYesYesYes
ArsenicYesYesNo
BariteYesYesNo
BerylliumYesYesNo
BismuthYesYesNo
GermaniumYesYesNo
HafniumYesYesNo
MagnesiumYesYesNo
ManganeseYesYesNo
NiobiumYesYesNo
PlatinumYesYesNo
TantalumYesYesNo
TitaniumYesYesNo
VanadiumYesYesNo
TinYesNoYes
ZirconiumYesNoYes
Phosphorus NoYesYes
CesiumYesNoNo
ChromiumYesNoNo
IndiumYesNoNo
RubidiumYesNoNo
SamariumYesNoNo
TelluriumYesNoNo
ZincYesNoNo
BoronNoYesNo
Coking CoalNoYesNo
FeldsparNoYesNo
GalliumNoYesNo
HeliumNoYesNo
Phosphate Rock NoYesNo
ScandiumNoYesNo
SiliconNoYesNo
StrontiumNoYesNo
Gold NoNoYes
Iron ore NoNoYes
MolybdenumNoNoYes
Potash NoNoYes
UraniumNoNoYes

Despite having most of the same materials found in the U.S. or China’s list, the European list is the only one to include phosphate rock. The region has limited phosphate resources (only produced in Finland) and largely depends on imports of the material essential for manufacturing fertilizers.

Coking coal is also only on the EU list. The material is used in the manufacture of pig iron and steel. Production is currently dominated by China (58%), followed by Australia (17%), Russia (7%), and the U.S. (7%).

The U.S. has also sought to reduce its reliance on imports. Today, the country is 100% import-dependent on manganese and graphite and 76% on cobalt.

After decades of sourcing materials from other countries, the U.S. local production of raw materials has become extremely limited. For instance, there is only one operating nickel mine (primary) in the country, the Eagle Mine in Michigan. Likewise, the country only hosts one lithium source in Nevada, the Silver Peak Mine.

China’s Dominance

Despite being the world’s biggest carbon polluter, China is the largest producer of most of the world’s critical minerals for the green revolution.

China produces 60% of all rare earth elements used as components in high-technology devices, including smartphones and computers. The country also has a 13% share of the lithium production market. In addition, it refines around 35% of the world’s nickel, 58% of lithium, and 70% of cobalt.

Among some of the unique materials on China’s list is gold. Although gold is used on a smaller scale in technology, China has sought gold for economic and geopolitical factors, mainly to diversify its foreign exchange reserves, which rely heavily on the U.S. dollar.

Analysts estimate China has bought a record 400 tonnes of gold in recent years.

China has also slated uranium as a critical mineral. The Chinese government has stated it intends to become self-sufficient in nuclear power plant capacity and fuel production for those plants.

According to the World Nuclear Association, China aims to produce one-third of its uranium domestically.

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Mining

Visualizing the Future Demand for Battery Minerals

In this graphic, our sponsor Sprott examines the growth in demand for battery metals, as well as potential supply constraints.

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A circle graphic depicting the rise in demand for critical minerals used in clean energy, a bar chart illustrating the growth in EV sales, and a pie chart demonstrating the supply gap for critical minerals.

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The following content is sponsored by Sprott

The Future Demand For Battery Minerals

Battery minerals are vital for the clean energy transition. They power cost-effective, on-demand energy systems and are at the core of decarbonizing transportation.

In this graphic, our sponsor Sprott examines the growth in demand for battery metals, as well as potential supply constraints.

Exploring Mineral Growth to 2040

Demand for battery metals is set to skyrocket in the coming years. Let’s break down the expected growth between current usage and the projected demand in 2040, based on a Net Zero Emissions Scenario (NZE): 

Mineral Demand (kilotonnes)20222040P (NZE)
Copper6,062.6 kt20,677.8 kt
Cobalt68.3 kt258.5 kt
Lithium73.3 kt1,187.5 kt
Nickel460.6 kt4,344.8 kt
Graphite552.8 kt4,540.4 kt
Manganese187.4 kt1,507.3 kt

The raw materials that batteries use can differ depending on their chemical compositions. However, these metals are considered critical for EVs and energy storage.

For example, the cells in the average battery with a 60 kilowatt-hour (kWh) capacity—the same size that’s used in a Chevy Bolt—contained roughly 185 kilograms of minerals.

Supply Gap in 2030

The growing demand for these battery metals is raising concerns over supply. Predicted shortages are expected to emerge by or before 2030, according to Energy Transitions Commission:

MineralSupply gap in 2030P
Copper-10%
Nickel-15%
Lithium-30%
Cobalt-40%

The rising demand for key minerals, driven in part by the move to EVs, could result in a supply gap that provides a potential investment opportunity in mineral exploration and mining companies. Interested in learning more?

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Invest in the energy of tomorrow. Sprott Energy Transition ETFs offer a focused investment opportunity in the miners of the critical minerals essential to fueling the clean energy transition.

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