Analysis of the Impact of Critical Mineral Supply Chain Restructuring on the Global Mining Investment Landscape

I will now provide you with a systematic and comprehensive analysis report based on collected information.

The global critical mineral supply chain is currently undergoing profound structural restructuring. According to the G7 Critical Minerals Action Plan released at the G7 Leaders’ Summit in June 2025, Western countries have elevated critical mineral security to a national strategic level, clearly stating the core goal of reducing dependence on supply chains from specific countries [1]. U.S. Treasury Secretary Scott Bessent announced the invitation of Australia and India to the G7 Critical Minerals Conference, which is a concrete manifestation of this strategy. The conference is scheduled to be hosted by the U.S. in Chicago in September 2025, where further cooperation on supply chain security will be promoted [2].

The 2025 Global Critical Minerals Outlook report released by the International Energy Agency (IEA) points out that the geographic concentration of the critical minerals market has continued to rise in recent years. In 2024, the top three regions accounted for 86% of the market share in the refining of critical minerals such as copper, lithium, nickel, cobalt, graphite, and rare earths, up from 82% in 2020 [3]. This high concentration exposes systemic risks in the global supply chain, prompting governments to accelerate the diversification of supply sources.

Despite challenges on the supply side, demand for critical minerals continues to rise. IEA data shows that lithium demand increased by nearly 30% year-on-year in 2024, significantly exceeding the 10% average annual growth rate of the 2010s. Demand for nickel, cobalt, graphite, and rare earths grew by 6-8%. This growth is mainly driven by energy applications, including electric vehicles, energy storage systems, renewable energy, and power grid construction [3]. For battery metals (lithium, nickel, cobalt, graphite), the energy sector contributed 85% of total demand growth in 2024.

According to market research by Fact.MR, the global lithium market is projected to grow from USD 32.38 billion in 2025 to USD 174.14 billion in 2035, with a compound annual growth rate of 18.3% [4]. This growth expectation provides long-term fundamental support for mining investment.

The Critical Minerals Action Plan released at the 2025 G7 Summit established five core pillars: First, investment incentives and capital mobilization, encouraging multilateral development banks and private lenders to provide more capital for eligible critical mineral projects; Second, supply chain transparency and traceability, promoting the establishment of a standards-based mineral market; Third, technological innovation and R&D cooperation, focusing on processing, licensing, recycling, substitution, and circular economy; Fourth, sustainable development and responsible sourcing; Fifth, international cooperation and partnership expansion [1][2].

Notably, Australia, India, and South Korea have officially endorsed this action plan, marking the expansion of the G7 cooperation framework to a broader “G7+” model. This cooperation model not only covers the traditional Group of Seven but also actively absorbs resource-rich countries and major consumer countries.

Governments are using diversified policy tools to support the development of critical mineral supply chains. Research by BloombergNEF shows that policy incentives cover multiple dimensions such as fiscal subsidies, tax incentives, strategic reserve construction, recycling incentives, and domestic processing capacity building [5]. Taking Australia as an example, the country is negotiating with the U.S. to establish a USD 1.2 billion strategic mineral reserve covering rare earth elements, which may include measures such as price floors, government-guaranteed loans, off-take agreements, and direct investment [6].

The U.S. government has significantly reduced the capital risks of domestic critical mineral projects and accelerated development timelines through Defense Production Act funds, federal grants, low-cost financing, and off-take agreements [7]. This policy support is changing the return-risk structure of mining investment.

The rare earth sector is the most prominent performer under the G7 supply chain restructuring policy. In 2025, rare earth stocks have achieved astonishing gains:

Data source: Market indices and financial data platforms [6][8]

As the only U.S. rare earth producer, MP Materials’ valuation changes fully reflect the policy-driven effect. The company operates the Mountain Pass mine and processing facilities, which are strategic sources of domestic rare earth oxide and downstream magnet capacity in the U.S. In 2025, the company signed an over USD 400 million investment agreement and a 10-year neodymium-praseodymium (NdPr) supply agreement with the U.S. Department of Defense, priced at USD 110 per kilogram [8][9].

This agreement is a milestone, and its pricing may become a benchmark for future similar agreements. Analysts predict that NdPr prices will peak at USD 120 per kilogram from late 2026 to early 2027, driven by strong demand for magnets in electric vehicles, home appliances, and electronic products while supply response is limited [6]. Macquarie forecasts that due to geopolitical tensions reshaping the global supply chain, NdPr prices will peak at USD 110-120 per kilogram in early 2027.

Australian rare earth producers have also benefited from supply chain restructuring. As the world’s largest non-Chinese rare earth producer, Lynas Rare Earths’ stock price has risen by 152% in 2025. Australia’s ongoing negotiations on a strategic mineral reserve plan will further support the investment attractiveness of domestic rare earth projects [6]. Australian Strategic Materials (ASM) has risen by 155.4%, Hastings Technology Metals by 107.4%, and Arafura Rare Earths by 121.6%, reflecting investor optimism about the entire Australian rare earth sector.

The core drivers of the valuation increase of rare earth companies include: revenue certainty brought by government contracts, supply chain security premium, bullish pricing due to expected supply gaps, and investors’ allocation demand for geopolitical themes. The VanEck Rare Earth and Strategic Metals ETF (REMX) has achieved a total return of 100.41% over the past year [10], indicating that institutional investors are systematically increasing their allocation to this sector.

Compared with rare earths, the lithium market has stabilized and rebounded after a price decline in 2024. As the world’s largest lithium producer, Albemarle’s stock price has risen by 24% in the past month, outperforming the S&P 500’s 1% gain over the same period [11]. Baird upgraded Albemarle’s stock rating to “Outperform”, predicting that lithium prices will continue to rise as demand from the stationary energy storage sector drives the company’s growth.

Albemarle’s Q3 2025 results show that adjusted EBITDA increased by 57% year-on-year, with strong cash flow performance. The company lowered its 2025 capital expenditure forecast to approximately USD 600 million and expects to achieve positive free cash flow of USD 300-400 million for the full year [12]. Jefferies raised Albemarle’s target price to USD 167, maintaining a “Buy” rating; Morgan Stanley upgraded from “Underweight” to “Equal Weight” and raised the target price to USD 147, reflecting analysts’ optimism about the lithium market.

The valuation recovery of lithium companies is based on the following logics: First, lithium prices have fallen sharply from the 2023 peak, and the current price level (approximately USD 15 per kilogram) provides more reasonable procurement costs for downstream users; Second, shipments of energy storage systems have exceeded expectations, especially in the stationary energy storage sector; Third, the industry’s capital expenditure discipline has improved, with producers actively controlling expansion pace; Fourth, the long-term growth logic of electric vehicles remains unchanged, and demand is still resilient.

However, data from InvestingPro shows that Albemarle’s 2025 earnings per share forecast is -USD 0.90, indicating that the company has not yet achieved profitability [11]. Investors need to pay attention to cost control progress and further room for price increases.

Major players in the lithium industry include Albemarle, SQM, Ganfeng Lithium, and Lithium Americas. After Baird upgraded Albemarle’s rating, analysts expect demand to continue to grow, although the current valuation has not fully reflected this expectation. Truist Securities raised the target price to USD 125, believing that the upward momentum of lithium prices will continue [11].

SQM and Ganfeng Lithium’s exposure to the Chinese market exposes them to specific geopolitical risks. Investors need to assess the degree of differentiation in the impact of supply chain restructuring on different producers.

The supply chain structure of the cobalt market is significantly different from that of rare earths and lithium. The Democratic Republic of the Congo (DRC) contributes approximately 70% of global cobalt production, while China processes approximately 80% of global cobalt supply. This dual concentration makes the cobalt market highly sensitive to supply disruption risks [13].

In 2024, the DRC implemented an export quota policy, setting an annual production cap of 96,600 tonnes for 2026 and 2027, a 50% reduction from the 2024 peak. Affected by this, prices of cobalt metal and related products rose by 128% from February to October [5]. This policy change provides price support for cobalt producers.

Data source: Farmonaut, Morningstar [13][14]

Glencore is the world’s second-largest cobalt producer, with a 2024 output of 38,000 tonnes, an 8% decrease from 41,000 tonnes in 2023. The company expects 2025 output to be 40,000-45,000 tonnes, and 2026 output to be 45,000 tonnes [15]. CMOC Group produces cobalt (as a by-product) through its copper mine assets in the DRC, making it the world’s second-largest cobalt producer.

The valuation of cobalt companies is affected by multiple factors: First, supply uncertainty brought by policy changes in the DRC; Second, expected growth in demand for electric vehicle batteries; Third, supply chain security considerations prompting Western countries to seek non-DRC sources; Fourth, increasingly stringent requirements for responsible sourcing and ESG.

Notably, large-scale mining projects in the DRC have obtained Responsible Minerals Initiative (RMI) and Copper Mark certifications. CMOC’s TFM mine and Glencore’s KCC and Mutanda assets obtained Copper Mark certification in April 2025 [15]. These certifications provide market access advantages for eligible producers.

The G7 Critical Minerals Action Plan clearly proposes to “mobilize capital and investment partnerships”, acknowledging the need for joint efforts to increase investment in responsible critical mineral projects within the G7 and globally [1][2]. This policy orientation is reshaping the geographic distribution and asset class allocation of global mining investment.

Research by LSEG points out that the strategic transformation of the global supply chain is creating new investment opportunities. Countries and enterprises are seeking diversification of critical mineral sources, reducing dependence on dominant suppliers, and investing in domestic processing capacity [16]. This trend has prompted investment to shift from traditional supply countries to emerging producing countries, while promoting regional layout of downstream processing capacity.

Supply chain restructuring has spawned new cross-border cooperation models. Taking graphite as an example, African countries (Madagascar, Mozambique, Tanzania) account for approximately one-quarter of global graphite reserves, while Germany, Japan, South Korea, and the U.S. are investing in graphite anode material production [16]. This cross-border cooperation model of “resource country mining - processing country refining - consumer country manufacturing” is being widely replicated in the critical minerals field.

LSEG also points out that more cross-border cooperation will connect resource-rich countries with countries with processing capacity and downstream consumption capacity. This model not only involves traditional mineral trade but also includes in-depth cooperation such as technology transfer, joint R&D, and infrastructure construction.

Analysis by TCW Group believes that for investors, this evolving landscape provides opportunities to gain exposure to all links in the critical mineral value chain: from upstream mining companies in emerging markets to midstream processors and downstream technology enablers in developed economies [17]. The increasing importance of critical minerals to artificial intelligence, clean energy, and national security, as well as potential supply challenges caused by new export restrictions, further strengthens the investment logic.

Supply chain restructuring is changing the valuation framework of mining companies. In addition to traditional resource reserves and production cost analysis, the following factors are gaining more weight:

1. Geopolitical Risk Premium/Discount
   : Supply chain security considerations have led to discounts on assets from certain source countries, while assets from allied countries have obtained premiums
2. Policy Support Valuation
   : Government subsidies, off-take agreements, and strategic reserve support have improved project visibility and predictability
3. ESG and Responsible Sourcing Premium
   : Companies with certifications such as RMI and Copper Mark are gaining market access and valuation advantages
4. Technological Autonomy Premium
   : Companies with full industry chain capabilities (from mining to magnets/battery materials) obtain strategic premiums

Despite a favorable policy environment, critical mineral projects still face significant execution and financing risks. TCW Group points out that mining projects have long development cycles, are capital-intensive, and are vulnerable to factors such as licensing delays, cost overruns, and community opposition [17]. For early-stage companies (such as USA Rare Earth), operational risks are particularly prominent [8].

Critical mineral prices have historically been highly volatile. Although NdPr prices are expected to peak, analysts also expect supply response to begin easing price pressure in late 2026, and prices may start to decline from 2027 [6]. Investors need to pay attention to the impact of price cycles on profitability and valuation.

The sustainability of government policies is uncertain. Changes in the U.S. government may affect the level of support for critical mineral projects. In addition, changes in trade policies (such as tariff adjustments) may affect the global mineral trade pattern and producer competitiveness.

Although supply chain restructuring aims to reduce concentration, the concentration of certain links may further increase in the short term. For example, although the mining sector is becoming more diversified, processing capacity is still highly concentrated in China. Investors need to assess differences in risk exposure across different value chain links.

1. Structural Investment Theme Established
   : The G7 critical minerals cooperation mechanism and supply chain restructuring have transcended short-term policy speculation and become a structural theme influencing the global mining investment landscape.

2. Rare Earth Sector Leads Gains
   : Rare earth stocks have seen the most significant gains, with leading companies such as MP Materials and Lynas benefiting from government contracts and supply chain security premiums.

3. Lithium Market Stabilizes and Rebounds
   : Lithium prices have stabilized after adjustments, and improved performance of producers and analyst rating upgrades indicate a shift in market sentiment.

4. Cobalt Market Supported by Policies
   : The DRC’s export quota policy provides price support for cobalt, but geopolitical risks remain a core consideration.

5. Valuation Framework Needs Adjustment
   : In addition to traditional financial indicators, geopolitical positioning, policy support, and ESG performance are becoming key variables in valuation.

For investors seeking to seize investment opportunities in critical minerals, it is recommended to focus on the following directions:

1. Rare Earth Leaders
   : MP Materials (clear U.S. policy support), Lynas Rare Earths (world’s largest non-Chinese producer)

2. Lithium Industry Recovery
   : Albemarle (industry leader, analyst rating upgrades), SQM (expanding capacity, but need to pay attention to Chinese market exposure)

3. Cobalt Industry Integration
   : Glencore (leader in responsible sourcing), China Molybdenum (high certainty of output growth)

4. Diversified Allocation
   : VanEck Rare Earth and Strategic Metals ETF (REMX) provides industry diversification exposure, with a return of over 100% in the past year [10]

LSEG research points out that in the long term, the continuous development of the digital and automated economy will further increase demand for critical minerals, which will be at the core of the modern global economy [16]. With continuous policy support and gradual diversification of supply chains, eligible producers are expected to continue to receive investment favor. However, investors need to closely monitor price cycles, policy changes, and geopolitical dynamics to seize phased opportunities in this long-term theme.

[1] G7 Canada - G7 Critical Minerals Action Plan (https://g7.canada.ca/en/news-and-media/news/g7-critical-minerals-action-plan/)

[2] G7 Information Centre - G7 Critical Minerals Action Plan (https://www.g7.utoronto.ca/summit/2025kananaskis/250617-critical-minerals.html)

[3] IEA - Global Critical Minerals Outlook 2025 (https://www.iea.org/reports/global-critical-minerals-outlook-2025)

[4] Fact.MR - Lithium Market Global Analysis Report 2035 (https://www.factmr.com/report/lithium-market)

[5] Bloomberg - Transition Metals Outlook 2025 (https://assets.bbhub.io/professional/sites/44/TransitionMetalsOutlook2025.pdf)

[6] Market Index - Why Lynas, Iluka and rare earth stocks have more than doubled (https://www.marketindex.com.au/news/why-lynas-iluka-and-rare-earth-stocks-have-more-than-doubled-in-recent)

[7] Barchart - Critical Minerals Take Center Stage (https://www.barchart.com/story/news/36926889/critical-minerals-take-center-stage-as-u-s-accelerates-push-for-domestic-supply-security)

[8] EBC Forex - Rare Earth Stocks 2025 Surge (https://www.ebc.com/forex/rare-earth-stocks-2025-surge-should-you-follow-the-wave)

[9] CSIS - G7 Cooperation to De-Risk Minerals Investments in the Global South (https://www.csis.org/analysis/g7-cooperation-de-risk-minerals-investments-global-south)

[10] Stock Analysis - VanEck Rare Earth and Strategic Metals ETF (REMX) (https://stockanalysis.com/etf/remx/)

[11] Investing.com - Baird upgrades Albemarle stock rating (https://www.investing.com/news/analyst-ratings/baird-upgrades-albemarle-stock-rating-to-outperform-on-lithium-price-surge-93CH-4434059)

[12] Albemarle Investor Relations - Third Quarter 2025 Results (https://investors.albemarle.com/news-and-events/news/news-details/2025/Albemarle-Reports-Third-Quarter-2025-Results/default.aspx)

[13] Farmonaut - 5 Best Cobalt Stocks (https://farmonaut.com/mining/5-best-cobalt-stocks-powering-agriculture-mining-2026)

[14] The Motley Fool - 6 Cobalt Stocks to Consider in 2026 (https://www.fool.com/investing/stock-market/market-sectors/materials/metal-stocks/cobalt-stocks/)

[15] Cobalt Institute - Cobalt Market Report 2024 (https://www.cobaltinstitute.org/wp-content/uploads/2025/05/Cobalt-Market-