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Amanda van Dyke has more than 20 years experience across the mining industry, from junior mining investment banking to fund management, managing a precious metals fund to critical minerals private equity strategy. With an MBA and a Master’s in International Economics, she’s a respected thought leader and speaker in the sector. Recently, in partnership with the Critical Minerals International Alliance, she has launched the Critical Minerals Hub to boost public awareness of these vital resources’ economic importance.
Critical Minerals is a term that hit all time peak popularity as a search term on Google on March 5, 2025. The query highlights the huge understanding gap, generally speaking, about what metals we use across new technologies. For example, a smartphone can contain up to 62 different types of metals and minerals.
So, what minerals are actually critical, strategic or rare — and why do governments around the world seem to be scrambling to secure access to them.
What makes a mineral critical?
The US Energy act of 2020, defined critical minerals as those minerals that are essential to the economic or national security of the United States; have a supply chain that is vulnerable to disruption; serve an essential function in the manufacturing of a product, the absence of which would have a significant consequences for the economic or national security of the US.
This definition is largely the same for all nation states that have published critical mineral lists. Which, as of today, includes, the European Union, the UK, Canada, Australia and even China.
Criticality, as it pertains to minerals, has to meet two criteria: it needs to be important or essential to an industry, and have supply chain that is deemed vulnerable to disruption.
A mineral that has been deemed critical tends to check at least one and likely most of the following boxes;
- It is relatively scarce
- It is subject to high import dependency
- It is vulnerable to supply chain disruptions
- It is subject to governance issues
- It is subject to political risks
- Its production or refining is concentrated in a few countries
Critical minerals and their supply chains are almost always complex, and their markets tend to be both opaque and volatile, which means reliable access to them is difficult. Critical minerals tend to have relatively few sources of mined supply, and supply chains tend to be controlled by relatively small number of participants who have an interest in maintaining their substantial and or exclusive control of supply. Small market size tends to mean fewer people who know how to mine or refine it. This closely held knowledge can become a barrier to entry to new entrants. The relatively small size of critical minerals markets, means that many critical minerals projects don’t meet the minimum scale threshold to incentivize large mining companies to get involved. Investors are often loathe to back the junior mining companies who don’t have experience, especially in markets that lack good data to base investment decisions on. To give you and idea of the scale of critical minerals markets, the global size of the refined copper market in 2023 was $320 billion, vs $4 billion for refined rare earth metals in the same year. (Data Bridge Market Research)
A lot of things can trip risk alarms on security of supply for critical minerals. Things that can land something on a critical minerals list that even if it isn’t experiencing a supply crunch today are:
- rapid anticipated demand growth beyond what the mining industry can reasonably ramp up to supply,
- limited processing or refining capacity,
- low substitutability
- high concentration of either the mineral itself or its supply chains in particular countries
- high levels of price volatility
- low to non existent recycling capacity
These risks tend to be exacerbated by the fact that many critical minerals are not mined in isolation, but rather only as a bi-product. This means that production is not incentivized by the material alone, you have to first justify building a mine for the main material, and then justify building a separate extraction circuit for the bi product critical mineral. There are a number of materials on critical minerals lists for which have known reserves available, but the cost of building a mine, bi product circuit, or refining capacity for it is not economically justified.
There are two things to keep in mind when considering criticality. First, criticality is inherently region or industry specific. Iron ore and salt are two great examples of metals and minerals essential to industry, but that both have global resilient diversified supply chains. Even if one or two countries stopped supplying it the rest of the world would be able to pick up the slack relatively easily. If you don’t intend to manufacture electric motors with permanent magnets in them, you probably don’t care about rare earth minerals and they don’t need to be on your critical minerals list. Second, it is the final form of the mineral or metal that is on the list. It is extremely rare that the ore that is processed on the mine site is put into its final form at a mine site. It is the processed or refined form of the critical mineral can be utilized in industrial processes. For example for the last 8 years the US has ramped up to mining 10% percent of all the mixed rare earth concentrates in the world, but it is only very recently that they developed refining capacity, that means they will be able to stop sending it abroad for processing into its component minerals.
Last but not least, why have critical minerals suddenly become a geopolitical issue? It is really simple, and actually has nothing to do with geopolitics, and everything to do with anticipated demand. When the industrial revolution happened in the 1700’s there was several orders of magnitude changes in the level of metals and minerals we consumed globally, the most well known being iron for steel, and coal for steam engines. Every subsequent industrial age, electrification in the 1800’s, computing in the 1900’s and finally the connected data era of the 2000’s have required additional order of magnitude increases in the volume and variety of metals and minerals consumed on a per capita basis. According to the World Bank the world will need to approximately double the number of tonnes we mined in 2020 by 2050, just to keep the present pace of global economic development going. Everyone of the 8 billion plus people on the planet aspires to the mineral, metal, and energy intensive lifestyle we enjoy in the West. The real game changer is the energy transition which many are calling the 5th industrial revolution. The same World Bank report has forecast that in order to get net zero by 2050, we will likely have to quadruple the number of tonnes of metals and minerals we mine by 2050. This is why every country on the planet who can, has prioritized securing their access to critical minerals, in order to ensure their industries and their people get access to the metals and minerals they need to stay ahead of the game.
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