Why critical minerals matter for long-term growth

Critical minerals are becoming a long-term investment theme because electrification, AI, reindustrialization and national security are driving structural demand while supply remains slow to expand and highly concentrated.

• Mineral demand from clean-energy technologies is expected to increase twofold to fourfold by 2040, and a typical electric car requires six times the mineral inputs of a conventional car.
• AI infrastructure requires 65–70 tons of metals per megawatt, mainly for power and cooling systems, adding demand for copper, aluminum, specialty steels and advanced materials.
• China accounts for around 35% of nickel refining, 50–70% of lithium and cobalt refining, and nearly 90% of rare-earth refining, while more than 60 strategic supply plans are in place across major economies.
• New mining projects take over 16 years to start producing; the top three mining nations’ average share of key energy minerals rose from 73% in 2020 to 77% in 2024, while the top three refining countries’ share increased from 82% to 86%.
• Lithium faces near-term oversupply but could move into deficit, whereas copper supply is constrained by declining ore grades, reserve depletion, permitting challenges and limited new discoveries; recycling could reduce new mining requirements for key minerals by 10%–30%.

Takeaway: Investors should view metals and mining as a strategic long-term theme, but assess geopolitical concentration, project execution, recycling potential and the environmental and social risks of extraction.