Critical mineral investment falls 9% despite booming demand in 2025: IEA
New Delhi, July 19
Global investment in critical minerals declined by 9 per cent in 2025, ending several years of growth despite strong long-term demand for minerals essential to clean energy technologies, electric vehicles and advanced industries, according to the International Energy Agency's Global Critical Minerals Outlook 2026.
The report attributed the slowdown to rising geopolitical tensions, price volatility and a more cautious investment environment, even as demand fundamentals remained strong.
"Critical mineral investment declined by 9% in 2025, ending several years of growth. Amid rising geopolitical tensions and price volatility, investors became more cautious despite strong underlying demand," the report said.
Battery metals witnessed the steepest pullback in investment. According to the report, capital spending in the segment fell by more than 20 per cent, marking the sharpest decline in over a decade, while lithium companies cut investment by around 40 per cent.
In contrast, copper continued to attract capital, with spending by copper-focused companies increasing 8 per cent, reflecting confidence in the metal's long-term demand outlook, the report added.
The IEA said exploration spending also weakened, declining by more than 10 per cent in 2025. Spending on lithium and nickel exploration dropped by around 45 per cent, outweighing steady investment in copper and modest growth in uranium exploration. Most regions recorded lower exploration budgets, although Asia Pacific stood out with a 20 per cent increase.
Despite weaker private investment, governments stepped up financial support for critical mineral projects.
"Public finance commitments in advanced economies reached around USD 65 billion in 2025, over four times higher than in 2023," the report said, adding that a significant gap still remains between announced commitments and actual disbursements, which will determine how much these measures help diversify supply chains.
The report also found that investment across the critical minerals value chain remains uneven. While mining projects continue to move ahead, refining and downstream processing capacity are not keeping pace.
"Analysis of project pipelines reveals a structural imbalance in efforts to promote supply chain diversification, with refining and downstream capacity lagging behind mining," the IEA said. It noted that in battery materials, planned cathode production capacity amounts to only about one-third of projected lithium mining capacity, highlighting the need for more balanced investment across the supply chain.
The agency said governments are increasingly deploying policy support, including grants, concessional loans and equity participation, to reduce investment risks and mobilise private capital for strategically important mineral projects as countries seek to build more resilient and diversified supply chains.
— ANI
Reader Comments
Finally, the IEA acknowledges what we've been saying: exploration spending is falling! Lithium down 45%? That's going to hit EV production costs hard. Remember our plan for 30% EV sales by 2030? 🚗 We need to speed up domestic mining like the J&K lithium find. Kaam karo, paperwork nahi!
Interesting paradox - demand is booming yet private investment is cautious. The geopolitical tensions are clearly making investors nervous. But I notice Asia Pacific increased exploration by 20% - India and Australia must be leading that charge. Need more balanced supply chains 🌏
Government support up 4x to $65 billion is good, but 'disbursement gaps' remain - that's the real problem. We've seen in India's own mining auctions how approvals lag. Copper investment up 8% is promising for our power sector, but 20% drop in battery metals is worrying. Need to reduce import dependence 🇮🇳
The structural imbalance between mining and refining capacity caught my eye. Cathode capacity only one-third of lithium mining? That means India's battery manufacturing plans might face bottlenecks. We should learn from China's integrated approach - they control both raw materials and processing 🔋
Price volatility is the key culprit. Lithium prices crashed 80% last year and now investment drops 40% - it's a vicious cycle. Our government should use strategic reserves like they do for oil. Also, why is copper still thriving? Because infrastructure demand never sleeps. India needs to focus on copper too 🛠️