Global Critical Mineral Market: Concentration and Risks from China's Export Controls
According to the latest report from the International Energy Agency (IEA), the global critical mineral market remains in a state of high concentration, with new threats to supply security emerging in recent months as China restricts exports of certain rare earth elements.
China's Export Control Policies
The Chinese government implemented critical export control measures on heavy rare earth elements last year. While the expansion of these controls has been postponed until November 2026, full implementation – if China decides to proceed – could place $6.5 trillion annually of downstream production outside China at risk.
Global Economic Impact
The IEA's Global Critical Minerals Outlook 2026, released today, highlights that the automotive, high-tech, defense, and energy sectors would be most severely affected. Additionally, if China decides to tighten exports of critical battery supply chain materials and negotiate a complete disruption of battery-grade graphite production, more than $300 billion annually of downstream production outside China would be threatened.
| Risk Type | Threatened Value (USD/annum) | Affected Sectors |
|---|---|---|
| Rare earth element export controls | $6.5 trillion | Automotive, high-tech, defense, energy |
| Battery supply chain disruption | $300 billion | High-tech, electric vehicles |
IEA Analysis
"These developments underscore how small volumes of critical minerals underpin enormous economic value and highlight the fragility of highly concentrated supply chains," the IEA report states.
While there have been improvements in certain areas, such as targeted policies and investment support for rare earth supply chains outside China, the global critical mineral market remains heavily concentrated on top suppliers, with China leading in the mining and refining of many metals, this international body noted.
Mineral Security Risks
IEA has identified supply concentration, export restrictions, and reduced investment as the primary risks to critical mineral security.
"Our latest analysis shows that enormous economic volumes depend on relatively small amounts of critical minerals, whose supply chains remain highly concentrated and thus vulnerable," IEA Executive Director Fatih Birol said.
Positive Signals
"However, there are encouraging signs of progress – including in rare earth supply chains – where we see targeted policies and investment support beginning to make a difference," the official added.
"And while diversified supply may be more expensive, this can be viewed as a mineral security insurance premium at a time of geopolitical instability – an economic hedge against major supply risks," Birol said.
Market Overview
The global critical mineral market faces significant challenges due to dependence on a small number of suppliers. This concentration not only creates geopolitical risks but also undermines the resilience of key industries in the context of energy transition and technological development.
Countries are gradually recognizing the importance of supply diversification, although this may come with higher costs. However, as the IEA analysis indicates, this can be seen as a necessary investment to ensure long-term economic security.