The Paris-based IEA has warned that global deficits of copper and lithium by 2035 could be exacerbated in some regions owing to concentration of supply and refining, leading to a potential "Opec moment" for critical minerals.
In its new Global Critical Minerals Outlook report, the IEA said lithium could see a 40pc deficit by 2035, even if all current projects proceed, while copper is expected to reach a 30pc deficit by the same year.
"Diversification is the watchword for energy security, but the critical minerals world has moved in the opposite direction in recent years, particularly in refining and processing," the report's executive summary said. "The average market share of the top three refining nations of key energy minerals rose from around 82pc in 2020 to 86pc in 2024 as some 90pc of supply growth came from the top single supplier alone: Indonesia for nickel and China for cobalt, graphite and rare earths."
In the lithium market, demand tripled from 2020 to 2024, and will triple again by 2035. By then, the electric vehicle (EV) sector will make up 90pc of additional demand while 95pc of future demand growth comes from battery applications: EVs, grid-scale energy storage and battery backup systems, reaching 3.7mn t LCE by 2035.
Three countries — Australia, China and Chile — will control up to 69pc of lithium mining by 2030, while China is expected to control 62pc of refining by the same year.
"China extracts only 22pc of lithium — but controls 70pc of global refining and 95pc of hard-rock lithium processing," the report said.
The copper market is also expected to grow rapidly, supporting the energy transition, but underinvestment and dwindling resource quality will limit supply.
Copper demand rises by 30pc by 2040 under the IEA's base-case (STEPS) scenario, up from 27mn t in 2024 to 34mn t by 2040. The IEA predicts a sharp deficit in supply by 2035, up to a 30pc deficit in primary supply. China is expected to dominate refining of copper, responsible for 47pc in 2030. The report said investment of up to $150bn-180bn is needed to keep pace with the global energy transition.
"Despite strong copper demand from electrification, the current mine project pipeline points to a potential 30pc supply shortfall by 2035 due to declining ore grades, rising capital costs, limited resource discoveries and long lead times," the report said.
