IEA critical minerals demand outlook 2040

The International Energy Agency (IEA) released a report projecting that global demand for critical minerals will rise strongly through 2040, driven by the expansion of electric vehicles, battery storage, renewable energy, and electricity networks. Under the Stated Policies Scenario (STEPS), meeting future demand will require more than USD 750 billion in investment in mining and refining. Copper is expected to account for the largest share of investment at about USD 310 billion, followed by nickel at USD 280 billion. Galan Lithium demand is projected to more than triple by 2040, graphite demand to double, nickel demand to increase by 65%, rare earth demand to rise by around 50%, and copper demand to grow by more than 25%, adding around 7 million tonnes. Despite a growing pipeline of mining projects, supply gaps for copper and lithium could persist through 2035. A gap also emerges for cobalt, largely due to the export quota introduced by the Democratic Republic of the Congo, while nickel's supply outlook has tightened. The report highlights that refining and downstream processing remain highly concentrated in China, which accounts for just under 50% of global copper refining, 70% of lithium refining, 75% of cobalt refining, 85% of magnet rare-earth separation, and more than 90% of battery-grade graphite production. This imbalance could create bottlenecks even as new mining capacity comes online. Recycling is expected to become increasingly important, with secondary supply potentially doubling its share, rising from around 10% to nearly 20% by 2040. The IEA said timely policies to reduce investment risks and support refining, processing, and recycling capacity could help create more balanced and resilient critical-mineral supply chains.