1. What Are Critical Minerals?
Critical minerals are raw materials deemed essential for economic prosperity, national security, and the energy transition. These minerals face supply chain vulnerabilities due to geographic concentration, limited substitutes, and growing demand.
Key Critical Minerals for Investors
2. Why Invest in Critical Minerals?
The Energy Transition Thesis
The global shift from fossil fuels to clean energy requires unprecedented quantities of critical minerals. An electric vehicle uses 6x more minerals than a conventional car. A wind turbine requires 9x more minerals than a gas plant.
Supply Chain Vulnerabilities
Critical mineral supply chains are dangerously concentrated. China dominates processing of nearly all battery materials, creating strategic risks that governments are racing to address.
- • China controls 60-80% of rare earth processing
- • DRC produces 70% of global cobalt
- • Australia and Chile dominate lithium mining
- • Government incentives driving domestic supply development
3. Lithium: The White Gold
Lithium is the cornerstone of the EV revolution. Every electric vehicle battery contains 8-12kg of lithium, and demand is expected to increase 40-fold by 2040 to meet climate targets.
Hard Rock Lithium
- • Mined from spodumene pegmatites
- • Higher capital costs, faster production
- • Major deposits in Australia, Canada
- • Produces spodumene concentrate
Brine Lithium
- • Extracted from salt flats
- • Lower costs, longer development
- • Chile, Argentina Lithium Triangle
- • Direct lithium extraction emerging
Investment Considerations
Junior lithium companies offer significant leverage to lithium prices. Focus on projects with NI 43-101 resources, favorable metallurgy, and proximity to battery manufacturing hubs.
4. Copper: The Metal of Electrification
Copper is essential for electrification—EVs use 4x more copper than conventional vehicles, and renewable energy systems require massive copper wiring. Analysts project a 50% supply gap by 2035.
The Copper Supply Crisis
Demand Drivers
- • EVs: 80kg copper per vehicle
- • Solar: 5 tons per MW
- • Wind: 4+ tons per MW
- • Grid upgrades worldwide
Supply Challenges
- • Declining ore grades at major mines
- • 15+ years to develop new mines
- • Limited new discoveries
- • ESG and permitting challenges
Junior Copper Opportunity
Major producers need to replace depleting reserves, creating M&A opportunities for juniors with quality deposits. Look for porphyry copper projects in stable jurisdictions with scale potential.
5. Rare Earth Elements: Strategic Metals
Rare earth elements are critical for permanent magnets used in EVs, wind turbines, and defense applications. China controls 60% of mining and 90% of processing, creating significant supply chain risks.
Key Rare Earths for Investors
Magnet REEs (Most Valuable)
- • Neodymium (Nd) - strongest permanent magnets
- • Praseodymium (Pr) - magnet alloys
- • Dysprosium (Dy) - high-temp magnets
- • Terbium (Tb) - magnet stabilizer
Heavy REEs (Scarcer)
- • Command premium prices
- • Limited non-Chinese supply
- • Critical for defense applications
- • Ionic clay deposits in development
Investment Thesis
Western governments are prioritizing rare earth supply chain security with billions in incentives. Junior REE companies with permitted projects and offtake agreements are positioned for revaluation.
6. Nickel & Cobalt: Battery Metals
Nickel
Nickel enables high energy density in EV batteries. Class 1 nickel (greater than 99.8% purity) is required for battery applications, distinct from lower-grade nickel used in stainless steel.
- • Indonesia dominates new supply
- • Sulfide deposits preferred for batteries
- • ESG concerns with Indonesian laterites
Cobalt
Cobalt stabilizes battery cathode structures, improving safety and longevity. Demand is growing despite efforts to reduce cobalt content in batteries.
- • DRC produces 70% of global supply
- • Artisanal mining concerns drive ESG focus
- • Premium for ethically-sourced material
7. Graphite: The Forgotten Battery Metal
Graphite is the largest component by weight in lithium-ion batteries, comprising 100% of the anode. An EV battery contains 50-100kg of graphite—more than lithium, nickel, or cobalt combined.
Natural Graphite
- • Mined from flake graphite deposits
- • China produces 65% of global supply
- • Lower carbon footprint than synthetic
- • Growing projects in Canada, Australia, Africa
Synthetic Graphite
- • Produced from petroleum coke
- • Higher purity and consistency
- • Energy-intensive production
- • Higher cost than natural graphite
Investment Opportunity
China export restrictions have accelerated interest in non-Chinese projects. The US, Canada, and EU are prioritizing domestic graphite production with incentives and offtake support.
8. Uranium: Nuclear Renaissance
Nuclear power is experiencing a global resurgence as countries recognize it as essential for decarbonization. Uranium demand is set to increase significantly as new reactors come online.
Why Uranium Now?
Demand Drivers
- • 60+ reactors under construction globally
- • China plans 150+ new reactors by 2035
- • Life extensions for existing fleet
- • SMR development gaining traction
Supply Constraints
- • Production deficit for 10+ years
- • Secondary supplies depleting
- • Long lead times for new mines
- • Geopolitical risks in Kazakhstan, Russia
Junior Uranium Investment Thesis
Junior uranium companies offer significant leverage to uranium price movements. Key investment criteria:
- • Permitted projects in stable jurisdictions
- • Low capital intensity ISR projects preferred
- • Proximity to infrastructure for near-term production
- • Management with cycle experience
9. Investment Strategies for Critical Minerals
Portfolio Construction
Conservative (30%)
- • Large-cap producers
- • Diversified miners
- • Royalty companies
Growth (50%)
- • Development-stage juniors
- • Near-production assets
- • Strategic acquisitions
Speculative (20%)
- • Early-stage explorers
- • Discovery potential
- • Emerging commodities
Due Diligence Checklist
Technical Factors
- ✓ Resource quality and grade
- ✓ Metallurgical recoveries
- ✓ Infrastructure access
- ✓ Environmental considerations
- ✓ NI 43-101 compliant resources
Financial Factors
- ✓ Capital requirements vs. cash position
- ✓ Share structure and dilution risk
- ✓ Management track record
- ✓ Insider ownership
- ✓ Strategic partnerships/offtakes
Risk Management
Critical mineral investments carry unique risks that require active management:
- • Commodity price volatility - Consider averaging into positions
- • Technology disruption - Diversify across multiple minerals
- • Geopolitical risk - Favor stable jurisdictions
- • Execution risk - Focus on experienced management teams
10. Frequently Asked Questions
What are critical minerals?▼
Why invest in critical minerals now?▼
What is the best critical mineral to invest in?▼
How do I evaluate junior mining companies?▼
What are the main risks of critical mineral investing?▼
Should I invest in producers or explorers?▼
Start Researching Critical Mineral Companies
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Disclaimer: This guide is for educational purposes only and does not constitute investment advice. Critical mineral investments carry significant risks including loss of capital. Always conduct your own research and consult with qualified financial advisors before making investment decisions.
Last updated: January 2026