Critical Minerals

A critical mineral is a mineral input whose supply disruption could seriously affect the economy, national security or essential technologies. It differs from an ordinary mineral commodity by combining high economic or strategic importance with significant supply risk and limited possibilities for substitution. Criticality reflects vulnerability, not merely geological rarity, price or production volume.

Core tests of criticality

A mineral becomes critical when disruption would have large consequences and alternative supplies or materials cannot be secured easily.

• Its economic importance arises from its role in major industries, infrastructure, advanced manufacturing, energy technologies or defence.
• Its substitutability is low when alternatives are unavailable, costly or reduce technological performance.
• Its disruption can affect entire value chains even when the mineral forms only a small part of the final product.

Sources of supply risk

Supply risk concerns the reliability and responsiveness of the whole value chain, including mining, processing and refining.

• Production or processing may be geographically concentrated, exposing users to geopolitical, trade or logistical disruptions.
• High import dependence and inadequate domestic mining or processing capacity increase vulnerability.
• By-product recovery, long mine-development periods and technical barriers can make supply slow to respond to rising demand.
• Weak recycling systems and environmental or regulatory constraints may further restrict additional supply.

A relative and changing designation

Criticality is country-specific because economies differ in industrial structure, resource endowments, import dependence and security priorities. It is also dynamic, changing with technology, demand, discoveries, processing capacity, recycling, substitution and trade relations.

• A scarce mineral is not necessarily critical if demand is limited or substitutes are readily available.
• A geologically abundant mineral can become critical if processing is concentrated or demand rises faster than supply.
• Critical-mineral identification therefore guides diversification, exploration, recycling, stockpiling and research into substitutes.

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