Investment in Critical Minerals Declines Despite Western Push for Supply Chain Security

Investment in critical minerals declined last year despite efforts by Western countries to expand domestic production for national security reasons, the International Energy Agency (IEA) said Thursday.

The geographic concentration of supply chains for minerals essential to the high-tech, aerospace and clean energy industries has increased further, particularly in the refining sector, according to a new IEA report.

The Paris-based agency, which advises energy-consuming nations, said China and Indonesia, the leading refining countries, accounted for more than three-quarters of the total growth in refined mineral supply over the past two years.

Despite efforts to diversify supply chains, geopolitical tensions and price volatility led global investment in mineral mining and refining to fall by 9 percent in 2025, the IEA said.

“Over the last year in particular, concerns about high supply concentration have moved from being a sort of theoretical vulnerability into an immediate economic security challenge,” said Tim Gould, the IEA’s chief economist.

The agency highlighted the growing use of export controls as a major economic and security challenge.

“Rare earth export controls introduced by China in April 2025 forced some automakers to reduce production or temporarily suspend operations,” the IEA said in its annual Global Critical Minerals Outlook report.

If Beijing proceeds with plans to expand export controls, an estimated $6.5 trillion in annual downstream production outside China could be put at risk, the report warned.

The IEA, however, also pointed to some positive developments, noting that public financing commitments for critical minerals more than quadrupled between 2023 and 2025.

The agency said the United States and Malaysia were already making progress in reducing China’s dominance in rare-earth refining.