Mineral Supply Concentration

The clean energy transition reduces dependence on OPEC but creates a new dependence on a handful of countries that mine and process the minerals inside every battery and wind turbine. Solving one supply vulnerability creates another.

Six minerals drive most clean energy hardware: lithium, cobalt, nickel, manganese, rare earths, and copper. Mining is spread across several countries, but processing is dominated by China, which refines roughly 60-70% of most battery minerals even when it does not mine them (IEA, 2024). A country importing cobalt from Congo still depends on Chinese smelters to turn it into battery-grade material.

Cobalt is uniquely exposed: the Democratic Republic of Congo produces about 70% of world supply from a region with significant political instability, and China controls the processing and much of the mine ownership.

Tracing a battery cell's supply chain. A US automaker assembles an NMC battery pack in Ohio. The lithium was mined in Australia and shipped to China for refining. Cobalt was mined in Congo, processed in China. Nickel was mined in Indonesia, processed in China. Cathode powder was shipped to South Korea for cell manufacturing, then to Ohio for assembly.

At how many points in this chain does China appear?

Three: lithium refining, cobalt processing, and nickel processing. A trade disruption at any processing step breaks the chain regardless of where the raw ore came from. This concentration is why the IRA's domestic content requirements and critical minerals provisions of US-allied trade agreements represent an attempt to rebuild supply chains, not just manufacturing capacity.

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