In the 20th century, oil defined economic and global power. Nations all over fought wars to control it. Economies rose and fell based on their price and supply. Even today, conflicts in oil-rich regions can significantly impact fuel costs and, consequently, foreign policy almost overnight. But behind the headlines, a quieter, more profound, more powerful shift is underway.
We’re entering a world where rare earth materials are becoming more valuable than barrels of oil. Lithium, cobalt, nickel, graphite, and rare earths - these aren’t just materials; they’re the new lifeblood of modern life. They power our phones, electric cars, solar panels, defence systems, and even our AI tools.
Just as oil, these materials are already becoming tools of influence, leverage, and conflict. China’s rare earth export bans, Russia’s nickel sanctions, and the West’s scramble to secure lithium from South America all echo the early days of the oil era.
Let's examine the forces, fractures, and frontiers of this emerging mineral economy.
Energy Transition from Oil to Elements
At the heart of this shift is the “energy transition”, the very noble move from fossil fuels to cleaner, greener electric alternatives. However, while this change may sound environmentally friendly, it is, in fact, extremely resource-intensive.
- According to the International Energy Agency (IEA), global lithium demand is expected to triple by 2030 under current policies and could increase by a staggering 40 times by 2040 under net-zero scenarios.
- Cobalt, another key battery material, is projected to reach 270,000 tonnes annually by the end of this decade, growing at a compound annual rate of nearly 7%.
This isn't just a phase. The IEA’s 2024 Critical Minerals Review warns, “to meet global climate goals, mineral demand must rise by up to 500% for certain materials”.
In other words, while we may be reducing our dependence on oil, we’re becoming far more dependent on critical minerals than ever.
What’s Fueling the Boom?
The reason we’re seeing such a sharp spike in demand for these minerals comes down to two major shifts happening simultaneously: the rise of electric vehicles (EVs) and the rapid expansion of digital infrastructure.
Rise of Electric Vehicles
By the end of 2025, 85 million electric vehicles are expected to be on the road, according to the latest forecast by Gartner Inc.. That number could increase fivefold to 200 million by 2030. Countries like Norway already see 90% of new car sales as electric. China leads the global market, and India and the U.S. are racing to catch up.
But here’s a shocking fact: building an EV requires a lot more minerals than a petrol car. Every single EV battery requires approximately 8 kg of lithium, 15 kg of graphite, 2 kg of cobalt, and nearly 35 kg of nickel, among other materials. Now let's multiply that by millions of new EVs every year, and it becomes clear why mining companies, governments, and battery manufacturers are struggling to secure supplies.
Digital Infrastructure Dominance
Apart from transport, almost all our digital backbone relies on these materials. Whether it’s cloud storage, video calls, AI models, or even the electricity needed to power laptops, everything depends on complex technologies built from these rare elements.
And these systems are growing fast. Data centers are expanding to meet the demands of AI and streaming. Renewable power grids are being upgraded. 5G towers are going up in every major city. What’s happening now is about how these trends overlap with each other. Clean energy, smart mobility, and digital connectivity are all rising at once, and they’re all depending on the same minerals.
This convergence is creating a supply strain that the world is still unprepared for. It’s why prices for materials like lithium spiked by over 400% between 2021 and 2023, before partially cooling off, and why countries are treating mining and processing capacity like strategic national assets.
Geopolitics – A Different Kind of Power Play
In the past, countries that controlled oil controlled global politics, trade, and even wars. Today, a similar phenomenon is occurring, but this time it involves rare earth elements.
China’s Commanding Lead
Currently, China dominates the global market for critical minerals. It doesn’t just dig these minerals out of the ground; it also does most of the refining, which simply means it turns them into a usable form.
- China mines approximately 60% of the world's rare earth elements and refines up to 90% of them.
- It processes 100% of the world’s gallium and 94% of magnesium, both of which are critical for electronics.
- It also processes the majority of lithium, cobalt, and graphite used in electric batteries.
That gives China a big fat advantage. Even if countries like Australia or the U.S. mine these minerals, they often have to send them to China for refining. This means China can decide who gets what, and how much, which gives it serious leverage.
Not surprisingly, China has already utilized this power. In 2024 and 2025, it limited exports of some critical minerals, such as gallium and rare earths, which ultimately disrupted global markets and caused prices to skyrocket.
How is the West Reacting?
Regions like the U.S. and Europe don’t want to depend so heavily on China. So they’re investing in their own supply chains.
- The U.S. Inflation Reduction Act offers billions of dollars in subsidies for electric vehicles and batteries, but only if they’re made using minerals from trusted countries.
- The EU Critical Raw Materials Act requires Europe to mine, process, and recycle a greater proportion of its own minerals by 2030. To meet these goals, it is fast-tracking mining permits, funding refining projects, and negotiating trade partnerships with resource-rich countries like Chile.
- Canada and Australia, which have substantial mineral reserves, are forming new partnerships and enhancing their capacity.
India’s Strategic Push
With a booming EV market, expanding battery manufacturing capacity and ambitions to lead in green hydrogen and solar energy, India, although a newer player is moving fast.
- In 2023, India discovered 5.9 million tonnes of inferred lithium reserves in the Reasi district of Jammu & Kashmir. This is the country's first major domestic lithium find.
- India launched a Critical Minerals Mission in 2024 to explore, mine, and recycle these materials.
- It's partnering with countries like Australia, the U.S., and Chile to gain access to minerals such as lithium and cobalt through a Comprehensive Economic Partnership Agreement (CEPA).
- India is also part of the Mineral Security Partnership (MSP), which supports critical mineral projects worldwide.
However, India still lacks the technology to refine many of these minerals. Currently, it imports 100% of its lithium, cobalt, and nickel in processed form.
The Environmental Equation
There’s a paradox at play when we talk about clean and green energy in general. The mining and processing footprints of critical minerals often entail significant environmental and human costs.
For example, extracting only one tonne of lithium from Chile is said to consume over 1.9 million litres of water. Apart from that, mining has been linked to child labour, unsafe conditions, and toxic waste.
Meanwhile, despite the massive demand for these minerals, only 5% of lithium-ion batteries are recycled globally to date (IEA). The rest are discarded, wasting materials and adding to landfill pollution.
Final Thoughts
We’ve always chased energy. First, it was coal; then, it was oil. Now, it’s a new class of energy including lithium, cobalt, and rare earth materials. But this new race isn’t just about technology or trade. It’s about how we choose to build the future.
So we have to ask ourselves: can we meet skyrocketing demand without repeating the mistakes of the fossil fuel era? Can we mine smarter, refine cleaner, and truly build a circular economy: one that doesn’t harm the planet in the name of progress?
As the world shifts toward cleaner, mineral-rich energy systems, there’s a growing need for chemical expertise that’s not only innovative and efficient but also responsible. At Scimplify, with a network of over 200 trusted manufacturing partners, a dedicated R&D team of more than 40 scientists, and a deep commitment to green chemistry principles, we’re driving the responsible research and manufacturing of key specialty chemicals.
Contact us at info@scimplify.com to learn more about how we support your requirements for key chemical products.
