Why minerals matter for the energy transition
The clean energy transition is a materials challenge
Oil dependence is well-understood geopolitically — everyone knows Saudi Arabia, Russia, and the Strait of Hormuz. But the clean energy transition creates new dependencies that receive far less attention: lithium from Chile and Australia, cobalt from the DRC, rare earths from China, nickel from Indonesia. Understanding these supply chains is essential for any energy security analysis.
3×
More copper needed by 2040 for electrification (IEA)
~85%
Rare earth processing in China
~70%
Cobalt from DRC (Democratic Republic of Congo)
Atacama
23.30°S 68.18°W — world's largest lithium brine
Lithium · GPS-located deposits
The lithium triangle and the world's key deposits
The Lithium Triangle — South America:
Approximately 55% of the world's lithium production comes from the "Lithium Triangle" — salt flats (salars) in the Atacama Desert spanning Chile, Argentina, and Bolivia. Salar de Atacama (23.30°S 68.18°W, Chile) is the world's richest lithium brine — lithium concentration of approximately 1,500–2,000 mg/L in the brine, versus 200–400 mg/L at most other salars. Operators: SQM (Sociedad Química y Minera) and Albemarle. Chile nationalised lithium in 2023 (new lithium strategy — state participation via CODELCO required in future contracts). Salar de Uyuni (20.14°S 67.49°W, Bolivia) contains approximately 21 million tonnes of lithium — the world's single largest known lithium resource. However Bolivia's nationalistic resource policy (state control via YLB — Yacimientos de Litio Bolivianos) has slowed development; as of 2024, production from Uyuni is minimal despite enormous potential. POSCO Lithium Argentina (23.86°S 66.52°W, Cauchari-Olaroz salar, Jujuy province) is a significant new project. Source: USGS Mineral Commodity Summaries 2024 · Benchmark Mineral Intelligence lithium market.
Approximately 55% of the world's lithium production comes from the "Lithium Triangle" — salt flats (salars) in the Atacama Desert spanning Chile, Argentina, and Bolivia. Salar de Atacama (23.30°S 68.18°W, Chile) is the world's richest lithium brine — lithium concentration of approximately 1,500–2,000 mg/L in the brine, versus 200–400 mg/L at most other salars. Operators: SQM (Sociedad Química y Minera) and Albemarle. Chile nationalised lithium in 2023 (new lithium strategy — state participation via CODELCO required in future contracts). Salar de Uyuni (20.14°S 67.49°W, Bolivia) contains approximately 21 million tonnes of lithium — the world's single largest known lithium resource. However Bolivia's nationalistic resource policy (state control via YLB — Yacimientos de Litio Bolivianos) has slowed development; as of 2024, production from Uyuni is minimal despite enormous potential. POSCO Lithium Argentina (23.86°S 66.52°W, Cauchari-Olaroz salar, Jujuy province) is a significant new project. Source: USGS Mineral Commodity Summaries 2024 · Benchmark Mineral Intelligence lithium market.
Greenbushes — the world's largest hard rock lithium mine:
Greenbushes (33.86°S 115.97°E, Western Australia, Talison Lithium — JV between Tianqi Lithium China and Albemarle USA) is the world's largest hard rock (spodumene) lithium mine. Greenbushes produces spodumene concentrate (approximately 6% Li₂O grade) that is shipped to China for conversion to lithium carbonate or lithium hydroxide — the battery-grade forms. Tianqi's 51% ownership of Talison gives China significant strategic control over the world's highest-grade lithium mine. Australia produces approximately 55% of world lithium (by mass of ore) — but China converts approximately 60% of it into battery-grade material. This creates the paradox: Australia mines the lithium, China processes it, then sells battery cells globally. Western governments (USA IRA, EU Critical Raw Materials Act) are attempting to build non-China lithium processing capacity — but this takes 5–10 years to construct. Source: Talison Lithium · Albemarle AR 2023 · IEA Critical Minerals 2024.
Greenbushes (33.86°S 115.97°E, Western Australia, Talison Lithium — JV between Tianqi Lithium China and Albemarle USA) is the world's largest hard rock (spodumene) lithium mine. Greenbushes produces spodumene concentrate (approximately 6% Li₂O grade) that is shipped to China for conversion to lithium carbonate or lithium hydroxide — the battery-grade forms. Tianqi's 51% ownership of Talison gives China significant strategic control over the world's highest-grade lithium mine. Australia produces approximately 55% of world lithium (by mass of ore) — but China converts approximately 60% of it into battery-grade material. This creates the paradox: Australia mines the lithium, China processes it, then sells battery cells globally. Western governments (USA IRA, EU Critical Raw Materials Act) are attempting to build non-China lithium processing capacity — but this takes 5–10 years to construct. Source: Talison Lithium · Albemarle AR 2023 · IEA Critical Minerals 2024.
Cobalt, nickel, rare earths, copper
The other critical minerals — GPS-located key sites
Cobalt (DRC) and nickel (Indonesia):
Cobalt: Approximately 70% of global cobalt supply comes from the Katanga region of the DRC (10.00°S 25.00°E). Major mines: Tenke Fungurume (10.61°S 26.10°E, CMOC China, 180,000 t/yr copper + cobalt byproduct), Mutanda (10.54°S 25.75°E, Glencore). Approximately 30% of DRC cobalt comes from artisanal and small-scale mining (ASM) — where Amnesty International has documented child labour. LFP (lithium iron phosphate) battery chemistry eliminates cobalt — CATL and BYD's preference for LFP in stationary storage and many EVs has significantly reduced cobalt demand pressure. Cobalt price fell dramatically 2022–2024. Nickel: Indonesia has approximately 52% of world nickel reserves — concentrated in Sulawesi (1.50°S 121.00°E) and Halmahera. Morowali Industrial Park (2.53°S 121.63E) in Central Sulawesi contains multiple Chinese-backed HPAL (High Pressure Acid Leach) processing plants converting nickel laterite ore to battery-grade nickel sulphate. Indonesia has leveraged its nickel dominance to attract EV manufacturing and battery factories. Source: USGS · BGS Critical Minerals · Glencore AR 2023.
Cobalt: Approximately 70% of global cobalt supply comes from the Katanga region of the DRC (10.00°S 25.00°E). Major mines: Tenke Fungurume (10.61°S 26.10°E, CMOC China, 180,000 t/yr copper + cobalt byproduct), Mutanda (10.54°S 25.75°E, Glencore). Approximately 30% of DRC cobalt comes from artisanal and small-scale mining (ASM) — where Amnesty International has documented child labour. LFP (lithium iron phosphate) battery chemistry eliminates cobalt — CATL and BYD's preference for LFP in stationary storage and many EVs has significantly reduced cobalt demand pressure. Cobalt price fell dramatically 2022–2024. Nickel: Indonesia has approximately 52% of world nickel reserves — concentrated in Sulawesi (1.50°S 121.00°E) and Halmahera. Morowali Industrial Park (2.53°S 121.63E) in Central Sulawesi contains multiple Chinese-backed HPAL (High Pressure Acid Leach) processing plants converting nickel laterite ore to battery-grade nickel sulphate. Indonesia has leveraged its nickel dominance to attract EV manufacturing and battery factories. Source: USGS · BGS Critical Minerals · Glencore AR 2023.
Rare earths and copper:
Rare Earth Elements (REE): China dominates REE globally — approximately 60% of mining at Bayan Obo (41.77°N 110.12°E, Inner Mongolia, the world's largest REE mine) and approximately 85% of processing globally. NdFeB (neodymium-iron-boron) permanent magnets — used in EV motors and wind turbine generators — require neodymium, praseodymium, dysprosium, and terbium. China's 2023 export controls on gallium and germanium (both REE-adjacent) sent a signal about potential REE supply weaponisation. Non-China REE projects: MP Materials Mountain Pass (35.46°N 115.53°W, California, USA, only US operating REE mine), Lynas Malaysia (processing, 2.89°N 103.33°E, MP Wetar Australia feedstock). Copper: Escondida mine (24.25°S 69.07°W, Atacama Desert Chile, BHP 57.5%+Rio Tinto+JECO, 1.2 MT/yr — world's largest copper mine). Collahuasi (20.99°S 68.62°W, Glencore+Anglo American, 600,000 t/yr). Kolwezi copper-cobalt belt DRC. The world needs approximately 3× more copper by 2040 for electrification — copper is in EV motors, charging cables, transformers, and transmission lines. At current mine development rates, a significant copper supply gap is projected by 2030. Source: IEA Critical Minerals 2024 · Wood Mackenzie copper market analysis.
Rare Earth Elements (REE): China dominates REE globally — approximately 60% of mining at Bayan Obo (41.77°N 110.12°E, Inner Mongolia, the world's largest REE mine) and approximately 85% of processing globally. NdFeB (neodymium-iron-boron) permanent magnets — used in EV motors and wind turbine generators — require neodymium, praseodymium, dysprosium, and terbium. China's 2023 export controls on gallium and germanium (both REE-adjacent) sent a signal about potential REE supply weaponisation. Non-China REE projects: MP Materials Mountain Pass (35.46°N 115.53°W, California, USA, only US operating REE mine), Lynas Malaysia (processing, 2.89°N 103.33°E, MP Wetar Australia feedstock). Copper: Escondida mine (24.25°S 69.07°W, Atacama Desert Chile, BHP 57.5%+Rio Tinto+JECO, 1.2 MT/yr — world's largest copper mine). Collahuasi (20.99°S 68.62°W, Glencore+Anglo American, 600,000 t/yr). Kolwezi copper-cobalt belt DRC. The world needs approximately 3× more copper by 2040 for electrification — copper is in EV motors, charging cables, transformers, and transmission lines. At current mine development rates, a significant copper supply gap is projected by 2030. Source: IEA Critical Minerals 2024 · Wood Mackenzie copper market analysis.
Questions
Questions about critical minerals
Is the clean energy transition just replacing one geopolitical dependency (oil) with another (lithium/rare earths)?
This is one of the most important strategic questions of the energy transition — and the honest answer is: partly yes, but with important differences. The similarities: Clean energy technology depends on materials concentrated in a few countries — Chilean lithium, DRC cobalt, Indonesian nickel, Chinese rare earth processing — just as oil was concentrated in the Middle East. Disruption of any of these supply chains can constrain clean energy deployment or raise costs. China's processing dominance for battery materials (lithium, cobalt, nickel, graphite) creates a dependency that Western governments are actively trying to reduce. China's 2023 export controls on gallium and germanium demonstrated willingness to use critical minerals as geopolitical leverage. The important differences: (1) Recyclability: Oil is combusted and gone. Lithium, cobalt, copper, and rare earths can be recycled almost indefinitely — once the world has a large fleet of EVs and wind turbines, the "mine" increasingly becomes the recycling stream. IEA projects battery recycling meeting 40% of lithium demand by 2040. (2) Substitutability: LFP batteries eliminate cobalt. Sodium-ion batteries eliminate lithium. Motor designs can reduce rare earth requirements. Oil's lack of substitutes is more acute than any single critical mineral. (3) Quantity needed: The volume of critical minerals required per unit of energy service is orders of magnitude smaller than oil. A wind turbine that generates 5 GWh over its life requires approximately 500 kg of rare earths for its generator — displacing approximately 1,500 tonnes of coal or 700 tonnes of oil equivalent. (4) Geographic diversity: Unlike oil (heavily concentrated in politically unstable Middle East), critical minerals are more geographically distributed — Australia, Chile, Argentina, DRC, Philippines, Canada all have significant deposits. Geopolitical risk exists but is more distributed. Source: IEA Critical Minerals and Clean Energy Transitions 2024 · BloombergNEF Critical Minerals Market Outlook 2024.
Provenance
Attribution and citation
- Sources
- IEA Critical Minerals and Clean Energy Transitions 2024 · USGS Mineral Commodity Summaries 2024 · BGS Critical Minerals Intelligence Centre 2024 · Benchmark Mineral Intelligence · BloombergNEF Critical Minerals Market Outlook 2024
- Cite as
- "Critical Minerals — Lithium, Cobalt, Copper and the Clean Energy Supply Chain", The Energy Codex, https://thecodex.expert/energy/minerals/, last updated .