IEA says critical mineral stockpiles can cushion supply shocks as prices rebound
Critical mineral prices recovered in 2025 and early 2026 as tighter supply, export controls and strong demand affected global markets. The IEA estimates that stockpiling 11 high-risk materials outside their dominant supplier would cost less than $900 million annually.
Prices recover after a two-year downturn
Critical mineral prices rebounded in 2025 and early 2026 after declining in previous years, according to the International Energy Agency’s Global Critical Minerals Outlook 2026. Prices for base metals including aluminium, copper and tin increased by one-third between January 2025 and April 2026, with copper reaching record levels. Battery materials also recovered after falling in 2023 and 2024. Lithium prices more than doubled as demand from energy storage expanded and supply tightened, while cobalt rose by around 130%, largely because of export restrictions imposed by the Democratic Republic of the Congo.
Prices for smaller strategic mineral markets had already begun rising in 2024 and continued their advance through early 2026. The IEA linked this movement to new export controls and robust demand from energy, high-tech, artificial intelligence, aerospace and defence industries. China’s export controls on seven heavy rare earth elements, introduced in April 2025, affected downstream manufacturers and forced some automakers to reduce capacity utilisation or suspend operations temporarily.
Stockpiles offer a short-term industrial buffer
The IEA said strategic inventories could protect industrial activity during acute supply interruptions, although mineral markets differ substantially from oil. For the 11 high-risk materials assessed by the agency, the net annual cost of holding stocks in countries outside the dominant supplier would be less than $900 million. The IEA described that expenditure as modest compared with the potentially severe economic effects of disrupted supplies.
The materials identified as particularly exposed include gallium, magnet rare earths, yttrium, graphite, tungsten, tellurium, cobalt and germanium. Their vulnerability reflects concentrated supply, limited options for substitution and their importance across multiple industries. The agency argues that reserves should preserve business continuity during short-term emergencies, rather than manage prices. Transparent release rules would reduce the danger of distorting markets or weakening the investment signals needed for new mining, processing and recycling capacity.
Investment falls despite stronger prices
The recovery in prices has not yet produced a broad investment rebound. Critical mineral investment declined by 9% in 2025, ending several years of growth. Capital spending on battery metals dropped by more than 20%, its largest fall in over a decade, while lithium companies reduced investment by around 40%. Spending by copper-focused companies increased by 8%. Exploration expenditure fell by more than 10%, including declines of around 45% for lithium and nickel, while copper spending remained steady.
These investment trends matter for importers because inventories can only bridge temporary disruptions; they cannot replace diversified production and processing. The IEA highlighted the risks created by concentrated refining and expanding trade restrictions. The Middle East conflict added pressure through the closure of the Strait of Hormuz, affecting aluminium, sulphur and helium flows. The region produces around 8% of global aluminium and one-quarter of global sulphur, while half of seaborne sulphur trade passes through the strait. China subsequently restricted sulphuric acid exports in May 2026, raising processing costs for copper, lithium, cobalt, nickel and rare earths. For buyers, strategic stocks may provide time to secure alternative contracts, but longer-term security still depends on new suppliers, refining capacity, recycling and substitution.
