IEA: China’s Control of Critical Minerals Threatens Global Energy Transition
The International Energy Agency (IEA) has warned that the world’s rapid shift toward electrification and renewable power is at risk because of China’s overwhelming dominance in the production and processing of critical minerals — the raw materials essential for electric vehicles, batteries, wind turbines, and solar panels.
China’s mineral dominance
According to the IEA’s latest Critical Minerals Market Review, China refines more than 70% of global lithium and cobalt, 60% of rare earth elements, and over half of global nickel. These materials are indispensable for clean technologies. The report notes that China’s state-backed investment and tight export controls have created a “choke point” in global supply chains.
“The concentration of mineral processing in one country creates vulnerabilities that could slow down or disrupt the global energy transition,” said IEA Executive Director Fatih Birol. He emphasized the need for diversification of supply sources and sustainable mining practices to avoid potential energy security crises in the clean-tech era.
Growing geopolitical tension
Beijing’s decision earlier this year to impose new export restrictions on key rare earth compounds has already raised alarms in Washington, Brussels, and Tokyo. Western governments see these moves as potential leverage in future trade or diplomatic disputes. The IEA’s warning adds pressure for countries to develop their own refining and recycling capabilities.
Recent U.S.-backed initiatives, such as the Minerals Security Partnership (MSP), aim to reduce reliance on China by fostering investment in alternative sources across Africa, South America, and Australia. However, analysts say it could take a decade or more to build comparable infrastructure.
Impact on clean energy goals
Mineral supply constraints could make electric vehicles, solar panels, and wind turbines significantly more expensive in the coming years. The IEA estimates that demand for lithium could increase sixfold by 2040, while cobalt and nickel demand could quadruple. Without secure supply lines, meeting global net-zero targets could become increasingly difficult.
“If we do not act now, mineral bottlenecks could become the new oil crisis,” Birol warned.
What can be done?
- Diversify mining and refining: Encourage partnerships with mineral-rich countries beyond China.
- Invest in recycling: Develop circular economies to recover minerals from used batteries and electronics.
- Transparency and ESG standards: Ensure mining operations meet environmental and human rights benchmarks.
- Strategic reserves: Build critical mineral stockpiles to cushion against supply shocks.
Global collaboration needed
The IEA stressed that governments and industries must coordinate internationally to ensure fair access to resources. “The clean energy future cannot depend on a single point of failure,” the report concluded.
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