Critical Minerals: The Physical Substance of the Transition

Which Minerals and Why

Copper is the foundation and the least discussed. It carries current better than any affordable alternative, and every element of an electrified system uses it: generator windings, transformers, cabling, motors, charging infrastructure. An offshore wind farm contains several times the copper per megawatt of a gas plant, and an electric car roughly four times that of a combustion one. There is no substitution path of any scale; aluminium replaces copper in some transmission applications at the cost of size and conductivity.

Lithium is irreplaceable in current battery chemistry because it is the lightest metal and gives up its electron readily, which is precisely what a battery needs. Sodium-ion cells offer a partial alternative at lower energy density, and they entered production in the mid-2020s largely as a hedge against lithium supply.

Nickel and cobalt raise energy density in the cathode. The industry has been reducing cobalt content steadily, partly on cost and partly because of documented labour conditions in artisanal mining in the Democratic Republic of Congo, which supplies most of it. Lithium iron phosphate chemistry avoids both metals entirely and has taken a large share of production for exactly that reason.

Rare earth elements, chiefly neodymium and dysprosium, make the permanent magnets in direct-drive wind turbines and most electric vehicle motors. They are not geologically rare; they are chemically difficult to separate from each other, which is why processing rather than deposits is the constraint.

Silicon, silver and tellurium sit in photovoltaics. Silver in particular is used in cell contacts in quantities that matter at terawatt scale, and reducing silver loading per cell has been an active engineering effort for a decade.

The Refining Bottleneck

Public discussion focuses on mines. The tighter constraint is what happens after the rock leaves the ground, because refining is far more geographically concentrated than extraction.

China mines a modest share of world lithium and refines roughly 60 percent of it. It mines almost no cobalt and refines about 70 percent. For rare earths it holds a large share of mining and around 90 percent of separation capacity. Indonesia dominates nickel processing, having built refining capacity deliberately alongside an export ban on raw ore.

This concentration exists because refining these materials is capital-intensive, environmentally demanding and low-margin, and because one country made a decades-long industrial policy decision to accept those costs. Rare earth separation in particular involves hundreds of solvent extraction stages and generates radioactive residues from thorium and uranium that occur alongside the ore, which is a substantial part of why the industry left other jurisdictions.

The strategic consequence became explicit when export controls on gallium, germanium and graphite were introduced from 2023. A supply chain can be diversified, but building refining capacity takes years and requires accepting environmental costs that were previously exported along with the processing.

Timescales That Do Not Match

The central difficulty is arithmetic rather than geology. A new mine takes on average around sixteen years from discovery to first production - exploration, resource definition, permitting, financing, construction. Projected demand for lithium, copper and several others is set to more than double within a decade.

Those two numbers cannot both be satisfied by new mining alone, which is the honest starting point for any discussion of supply. The responses divide into four: open more mines faster, use less material per unit, substitute where possible, and recycle.

Efficiency has delivered more than is generally recognised. Silver per solar cell has fallen by more than half in fifteen years. Cobalt per kilowatt-hour of battery has fallen sharply. Turbine designs that avoid rare-earth magnets exist and are used where the trade-off suits. Each of these was driven by cost rather than by scarcity concern, and each reduced the requirement anyway.

The demand projections themselves deserve care. They generally extrapolate current material intensity forward, and material intensity has fallen consistently in every technology examined. Projections that assume today's chemistry in 2040 tend to overstate, in the same way that projections of copper demand for telephone lines overstated once fibre arrived.

Why Stock Is Different From Flow

A coal plant needs coal every day for forty years. A wind turbine needs its steel, copper and neodymium once. That difference is easy to state and changes the whole shape of the problem.

It means the requirement is front-loaded: build-out demands a large quantity of material over two or three decades, after which replacement demand is far smaller than installation demand. It also means the material does not disappear. Copper in a decommissioned turbine is still copper, and copper recycling already supplies a third of world demand at 95 percent recovery, because it has been economically worth doing for a century.

Battery recycling is where the arithmetic will change most. Commercial plants recover more than 95 percent of nickel, cobalt and copper from spent cells. Volumes are small today simply because few electric vehicles have reached end of life, but the first large cohort is approaching and the material arriving will be far more concentrated than any ore body.

None of this makes mining unnecessary during the build-out, and the impacts are real: lithium extraction uses large volumes of water in arid regions of the Atacama, nickel mining has driven deforestation in Indonesia, and the labour conditions in Congolese artisanal cobalt are documented and severe. The honest framing is that the transition requires a large one-time extraction effort with genuine costs, in exchange for ending a continuous extraction that currently amounts to some fifteen billion tonnes of fossil fuel every year.