As the clean energy transition accelerates, the world’s major economic and tech powerhouses are paying increasingly close attention to the critical minerals needed to power it.
Demand for these minerals—rare earths for catalysts and powerful permanent magnets, lithium for batteries, and aluminum for packaging, among others—is expected to keep growing quickly. That’s why the US has a federal critical minerals strategy. So does Australia. The European Union has a critical raw materials action plan. China has detailed policies for its strategic minerals, as does Japan. Clearly, shoring up supplies and securing supply chains is considered crucial.
How do countries define critical minerals?
Critical minerals, also known as “strategic minerals,” may seem somewhat self-explanatory. After all, “critical” and “strategic” definitionally mean important, and these minerals are indeed important for many high-tech appliances that power the global economy, like electric vehicles, smartphones, and wind turbines.
But even though these labels are often used interchangeably, not every country defines critical or strategic minerals the same way. Each country’s definition, then, drives its mineral strategies.
And we can expect countries’ lists of their critical or strategic minerals to be updated with increasing frequency as both demand and technology evolve, driven in large part by the green energy transition, says Carl Spandler, an associate professor in physical sciences at the University of Adelaide, and director of the Australian Critical Minerals Research Center. “It’s a very dynamic environment and it’s very hard to keep up with,” he says.
China has a list of 24 strategic minerals, which it published in 2016 as part of a broader National Mineral Resources Plan (2016-2020) (link in Chinese). The policy document says the minerals, which are targeted for tailored management and regulation, are classified as strategic because they are needed to “safeguard national economic security, national defense security, and the development needs of strategic emerging industries.”
While not officially categorized as such, China’s strategic minerals can also be divided into two groups: “strategic shortage minerals” and “strategic advantage minerals.”
That distinction was made by scholars and experts at a strategic mineral conference held by the Chinese Academy of Engineering, according to a summary (link in Chinese) of the discussion published by China Natural Resources News, which is supervised by the natural resources ministry. Minerals for which China does not have enough domestic production to satisfy its own demands, such as oil, gas, iron, and copper, can be considered “strategic shortage minerals.” Meanwhile, minerals that China produces and processes in high quantities, such as rare earths, can be classified as “strategic advantage minerals” because China’s dominance over those minerals can be used as a strategic lever.
An executive order issued by former US president Donald Trump in 2017 defined critical metals as:
“a mineral identified by the Secretary of the Interior [pursuant to the Executive Order] to be
(i) a non-fuel mineral or mineral material essential to the economic and national security of the United States;
(ii) the supply chain of which is vulnerable to disruption; and
(iii) that serves an essential function in the manufacturing of a product, the absence of which would have significant consequences for our economy or our national security.”
One major difference between the US and China’s definitions of critical and strategic minerals is that the US explicitly excludes fuel minerals like oil and gas.
In 2019, the Department of Commerce published “A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals.” Building on the definition in the 2017 executive order, the strategy identified 35 critical minerals.
According to the US Geological Survey (pdf), the country is currently 100% reliant on foreign imports for 17 of the 35 critical minerals, and 90% or more reliant on overseas sources for another five.
The EU published a list of 27 critical raw materials in 2017, chosen from a group of 78 raw materials. The list is an update to an initial grouping of 14 critical raw materials identified in 2011, which was subsequently increased to 20 critical raw materials in 2014.
As the EU notes, the 27 critical raw materials were selected because “risks of supply shortage and their impacts on the economy are higher than those of most of the other raw materials.” The list is designed to be used to “incentivize European production” of the selected materials through recycling and mining, and can also serve as a “supporting element when negotiating trade agreements, challenging trade-distortive measures, developing research and innovation actions.”
Australia published a critical minerals strategy in 2019 (pdf) that included a list of 24 critical minerals. The report describes the selected minerals as “essential for the economic and industrial development of major and emerging economies.”
One major difference between Australia’s list and those of the US and EU is that Australia includes minerals for which it has high domestic geological potential. Given Australia’s rich geological endowment, the country is focused on developing its critical minerals sector by attracting investment and driving innovation.
“As demand for critical minerals grows, there are significant economic opportunities for Australia,” reads the strategy document. “We have existing projects and significant geological reserves of minerals deemed critical by other nations and we are well placed to capitalize on rising global demand for secure supplies of critical minerals.”
In that way, Australia’s definition of critical minerals shares overlaps with China’s, identifying minerals over which the country potentially has a strategic advantage.
What do critical minerals lists reveal about national minerals strategies?
China was far-sighted in identifying critical minerals, and directing state resources to developing the capacity to mine and process them, says the University of Adelaide’s Spandler. “The Chinese have been smart enough early on [to realize that] there are a whole bunch of metals we haven’t historically used in large volumes…that suddenly we’ll need a lot of as technology pervades our society,” he says.
Often, these minerals are used in relatively small quantities, and could potentially be replaced by substitutes through technological development. In a free-market economy, that might pose risks to investors, Spandler says, but China could get around this problem because of the state’s active role in steering the economy.
In March, Chinese researchers at the Institute of Mineral Resources under the Chinese Academy of Geological Sciences published a paper (link in Chinese) in Acta Geoscientica Sinica, a journal associated with the China Geological Survey, analyzing different countries’ classifications of critical and strategic minerals.
“Is it the strategic minerals list that’s important, or the mineral resources strategy?” they asked. Rather than comparing different countries’ lists at face value, which they argued would in any case be an apples-to-oranges comparison, one should examine how those lists are put together and what they reveal about the country’s strengths, weaknesses, and “strategic intentions.”
The strategic intention of Western countries is obvious: to catch up to China in its ability to secure supplies of critical minerals. Spandler is optimistic that this is doable, though not without challenges. The US, for example, is investing heavily in developing critical minerals and offering tax incentives to spur private sector investment. “But there’s still a long way to go,” he says.