Critical Minerals Supply Chain Risks: The Hidden Challenge Facing Renewable Energy

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Imagine this scenario. China restricts exports of its rare earth magnets and suddenly electric vehicle production lines slow. Wind turbine orders face delays and the defense industry scrambles for new suppliers.

This isn't hypothetical. It's happened recently.

In 2025, the United States' tariffs on China triggered a fierce retaliation. Beijing put export controls on rare earths and magnets, materials which it dominates globally, and that power everything from EVs to missiles. Shipments of rare earth magnets fell 74 % in just weeks, crippling automakers across the United States, Japan, and Europe.

China then doubled down with stricter rules requiring foreign approval for any products using its technology or materials. This dispute illuminated an important issue that's been growing in the shadows for decades. Access to critical minerals presents a huge geostrategic risk for the United States. The issue ignited a global scramble to break Beijing's grip on these much -needed resources and woke a lot of people up to just how vulnerable the U.S. is to disruptions of these critical supplies. (Source)

In this article, we'll look at critical minerals supply chain risks, specifically why renewable energy, and a lot of other technologies for that matter, depend so heavily on critical minerals. We'll also map out the U.S. vulnerabilities and geopolitical threats to supply chain security and discuss what steps might be taken.

A transition to renewable energy and power storage places the United States at increased risk to disruptions in the supply of critical minerals. EVs, battery storage, wind turbines, and solar panels all require these specialized materials in large quantities. In fact, these technologies require significantly more critical minerals than their fossil fuel counterparts. (Source) Currently, the U.S. is partially or wholly dependent on importing most of these minerals from other countries.

In combination, these two factors (the criticality of certain minerals and U.S. import dependence) are significant vulnerabilities that place the U.S. at severe risk.

What is a critical mineral?

The Energy Act of 2020 defines a critical mineral as a non-fuel mineral or mineral material essential to the economic or national security of the United States, and which has a supply chain that is vulnerable to disruption. (Source) For the most part, these minerals have no viable substitutes or replacements. Critical minerals mining and processing is a global industry. And access to these resources, which requires mining and processing, as well as shipping, is constrained by geology, geopolitical conflicts, trade policies, domestic policies and regulations, acts of nature, as well as normal market forces. (Source)

Notably, a mineral's criticality can shift over time based on evolving technologies and changes to supply chains. For example, in 2021, when I started researching this episode, the United States Geological Survey, or USGS, listed 50 critical minerals that are vital to the U.S. economy and national security. In 2025, the USGS increased this to 60 mineral commodities. (Source) The list now includes rare earth elements, platinum group elements, and other metals like nickel, zinc, lithium, aluminum, and now copper, silicon, and silver. Therefore, while the trend is towards more minerals deemed critical, it’s important to note that a mineral’s criticality is not set in stone (pardon the pun). It may be deemed more or less important as other factors change.

Critical Minerals are Key Ingredients of Renewable Energy Technologies

To provide some color around renewable energy's need for critical minerals, I'm going to share a few details related to solar panels, wind turbines, and batteries.

Solar Panels

A typical 400 to 450 watt crystalline silicon panel (for reference, this is enough to power a coffee maker, or a food blender, or a very small microwave) can include up to 11 pounds of critical minerals, dominated by 1-2 pounds of aluminum in the frame, up to a pound of silicon, as well as varying amounts of copper, silver, tin, magnesium, arsenic, gallium, germanium, indium, and tellurium. (Source)

Although some of these are used in relatively small quantities, they're each essential to panel performance. And some of them are only recovered as byproducts of mining other metals, meaning their supply cannot easily increase in direct response to solar industry demand. An example is tellurium, which is used with cadmium in thin -film solar cells. Tellurium is generally recovered as a byproduct of copper refining. So even if solar manufacturers suddenly need much more of it, mining companies are unlikely to extract substantially more copper ore just to obtain the relatively small amounts of tellurium it contains. Tellurium supply, therefore, depends largely on copper production levels. (Source) A similar constraint applies to gallium from bauxite processing and germanium from zinc residues or coal fly ash.

Wind Turbines

Wind Turbines rely on numerous rare earth elements and other critical minerals. A single 3 megawatt wind turbine requires 6,000 pounds of aluminum, 4,000 pounds (that's 2 tons) of rare earth elements, as well as various amounts of zinc. This is in addition to 335 tons of steel. Steel is an alloy comprised of iron and other materials, and although iron is not a critical mineral, chromium, which is used to make stainless steel, is. Steel also includes other alloying elements like manganese, nickel, titanium, vanadium, tungsten, cobalt, and niobium, which are all critical minerals. (Source)

Batteries

Batteries are vital to renewable energy systems because they allow direct energy from the wind or sun to be stored for later use. A typical 60 kilowatt per hour lithium ion EV battery, such as that found in a Chevy Volt, contains roughly 400 pounds of key minerals and materials. In addition, they use aluminum, nickel, and copper, which are all critical minerals, along with steel. (Source) Batteries constitute approximately 40 % of the overall production cost of EVs. So as prices of battery ingredients increase, so do car prices. (Source)

According to Ernst & Young, production of lithium must quadruple in the next 10 years to meet the projected growth in demand. Current forecasts indicate an enormous shortfall of copper as well, unless production is significantly increased. (Source)

Of course, there are several types of batteries with differing amounts and ratios of mineral constituents. As the next generations of battery technology are developed, it's likely that mineral composition will change and perhaps even decrease. But the timeframe for putting next generation batteries on the market is anyone's guess.

But these are only requirements for the EV battery. They don't include the critical minerals that go into the rest of an electric vehicle. For example, a single EV contains more cobalt than 1,000 smartphone batteries. An EV uses roughly eight times as many critical minerals, including three times more copper than a conventional car with an internal combustion engine (Source and Source). Also, because EV batteries are so heavy, producers must substitute the steel of conventional car frames for lightweight aluminum, which is a critical mineral. (Source)

(Keep in mind, these minerals are also essential to other industries like telecommunications, aerospace, defense, medical equipment, and advanced manufacturing.)

U.S. Sources of Critical Minerals

Solar Panels

The U.S. is highly dependent on imports of critical minerals for solar panels, including arsenic, gallium, indium, silicon, copper, and silver. Arsenic production in the United States was halted in 1985, and approximately 90 % of imports are now from China, with the other 10% coming from other countries. (Source) Gallium production ended in the U.S. in 1985, so that now more than 50% of imports are from China. (Source) Indium is closely associated with the production of zinc (another critical mineral) with roughly one-third of imports coming from China. (Source) Forty to 50 percent of U.S. copper supply comes from Latin America. (Source) The U.S. is 77 percent net import reliant for silver, obtaining this mineral from Mexico, Canada, Chile, Turkey, and other countries. (Source) The U.S. imports 60 to 80 percent of its needed silicon from Brazil, Canada, Norway, Australia, Russia, and China. (Source)

Lithium Batteries

These contain several critical minerals, including graphite, manganese, cobalt, copper, rare earths, and, of course, lithium. The U.S. is more than 50% dependent on lithium imports from South America. (Source) Manganese production in the U.S. ended in 1970, and now a majority of manganese comes from Africa. (Source) About one-third of graphite imported by the U.S. comes from China. (Source)

Wind Turbines

As mentioned above, wind turbines contain thousands of pounds of rare earth elements. The U.S. obtains 80% of this supply from China. (Source) More than 50% of the copper comes from South America, and 96% of the chromium is imported from South Africa. Processed ferrochromium comes primarily from South Africa and Kazakhstan. (Source)

Of all the critical minerals used in solar panels, wind turbines, and batteries, the United States is at least 50% import dependent. The website Visual Capitalist offers an excellent graphic for understanding this situation. Each mineral is ranked by its net import reliance. Towards the bottom of this chart are minerals upon which the U.S. is 100% import dependent; there are 26 minerals listed here. For another 16 minerals, the U.S. is at least 50% import dependent. (Source)

Importantly, many of these minerals exist geologically in the United States, but they are currently mined or processed elsewhere. Therefore, it is geologically feasible to develop a domestic supply for these minerals in the coming decades.

Threats to U.S. Critical Mineral Supply Chains

This is where geology meets geopolitics meets risk assessment. Risk is broadly defined as vulnerability times cost (or consequence) times the likelihood of an adverse event. I have already framed the vulnerability and consequence of critical minerals supply disruptions to the U.S. in terms of the important and unique roles of critical minerals and U.S. import dependence. I will now highlight potential threats that could disrupt these supplies.

Extreme Concentrations of Supply

China leads production for many minerals and absolutely dominates processing and refining. We're talking about 60% to 90%+shares for lithium processing, cobalt refining, rare earths, and nearly all battery-grade graphite in some cases. Even minerals mined in Australia or Africa often flow to China for the critical midstream steps. (Source) This isn't just economic advantage, it's strategic leverage.

China has used export controls on critical minerals vis-a-vis its relationship with the United States. As noted earlier, the 2025 tariffs on China by the U.S. and China's retaliatory measures resulted in disrupted shipments and raised alarms across auto, defense, and energy sectors. (Source) But this wasn't the first time something like this happened. In 2010, China blocked rare earth exports to Japan amid a territorial dispute, triggering dramatic price spikes that exposed the world's vulnerability to supply weaponization. (Source) Nevertheless, China's dominance over refining has grown since 2020. (Source)

However, China is not the only key player with extreme concentration of critical mineral supply. Russia is the third largest producer of nickel, and its company, Nornickel, is the world's largest single nickel producer. Nickel is a key ingredient of batteries and stainless steel, and the U.S. EIA predicts that the demand for nickel will grow by a factor of 20 over the next two decades. Russia is also a major source of aluminum, titanium, scandium, and palladium. It holds the world's fourth largest supply of rare earth elements. (Source) As seen during the Russia-Ukraine crisis, Russia's concentration of critical mineral supply can lead to huge disruptions. In the first two weeks of the Russia-Ukraine conflict, the price of nickel doubled. (Source)

There are other countries with extreme concentrations of important minerals. The Democratic Republic of Congo, for instance, holds 50 to 55 percent of global cobalt reserves and represents 70 to 75 percent of production. (Source) South Africa holds the largest manganese reserves, about one-third of the global total. (Source) Congo and South Africa face unique geopolitical situations and threats that could easily disrupt supplies and the transit of those minerals to the rest of the world.

Geopolitical Volatility, ESG, and Cascading Disruptions

Geopolitical volatility can profoundly destabilize critical mineral supply chains through international wars, intrastate conflicts or civil wars, transnational crime, terrorism, closed maritime choke points, sudden regime changes, and even pandemics that can halt mining, processing, and transport overnight.

Ongoing fighting in regions like the Democratic Republic of Congo has disrupted cobalt and copper mining in the past, while instability in the Sahel region of Middle Africa affects lithium and other deposits.

Transnational crime and terrorism exist around the globe. Armed groups and cartels in Latin America and Africa have frequently attacked mines, extorted operators, or sabotaged infrastructure, creating chronic insecurity. In 2017, armed Papuan separatist groups occupied villages near the Grasberg copper and gold mine in Indonesia and carried out shootings, which prompted deployment of security forces and raised concerns about disrupted access and operations. (Source) In January 2026, Indonesian forces rescued 18 Freeport workers after rebels surrounded a company outpost for three days. (Source) These are just a few examples.

Closed chokepoints are another threat to critical minerals supply chains. Blockades or conflicts which shut down strategic transit routes can severely delay bulk mineral shipments and spike freight costs. A recent example is the Strait of Hormuz off Iran's shore. In early 2026, following US and Israeli strikes on Iran, Iranian forces declared the Strait of Hormuz effectively closed. They threatened and attacked vessels in retaliation, and this was compounded by a US naval blockade on Iranian ports. (Source) The consequence was that shipping traffic slowed drastically for months. These tensions and restrictions linger, and there's no way to know for sure how all of this is going to play out.

But importantly, while much of the focus of the Strait of Hormuz closure has been oil, this issue severely strained critical mineral supply chains as well. Gulf sulfur exports, which are nearly half of the global seaborne trade, halted, spiking sulfuric acid prices, enforcing 20 to 30 percent output cuts at miners of nickel, cobalt, copper, and lithium, as well as rare earth elements that all rely on acid leaching for processing. (Source) Petroleum coke shortages from reduced refining tightened the supply of synthetic graphite for EV batteries, while Gulf aluminum smelters, which are about 9% of global primary supply, faced constraints as well, driving up prices for batteries, renewables, and electronics materials. (Source)

Another of these critical choke points is the Suez Canal, which connects the Red Sea to the Mediterranean. In 2024, the Houthis of Yemen began to attack naval ships there, leading to a decrease in maritime traffic by at least half, with actual tonnage down even more. Ships had to take a safer but much longer route around Africa, adding 10 days to their journey and utilizing far more diesel fuel. As a result, the costs for a shipping container soared from around $1,600 or so on average to well over $5,000. (Source)

And it's not only geopolitical risks or threats that can close down a shipping choke point. There are structural risks as well. In March 2021, the Suez Canal was closed for nearly a week when a ship became grounded there. This created a massive traffic jam that held up $9 billion a day in global trade and strained supply chains already burned by the COVID-19 pandemic. (Source)

Another threat is changing regimes. Political transitions or coups, which lead to nationalizations, mandated beneficiation (a requirement that raw minerals be processed domestically into higher value products before they can be exported), additional taxes, export bans, or contract renegotiations can abruptly alter supply availability. As mentioned above, pandemics such as COVID-19 can close borders, idle mines, and disrupt labor. as seen in the widespread 2021 production and logistics halts.

All these shocks can trigger cascading shortages, dramatic price spikes, investment uncertainty, and delays for clean energy, defense, and high-tech sectors that rely on steady mineral flows.

Environmental, Social, and Governance (ESG)

ESG is basically the framework the world now uses to judge whether a mining project, or any big project, is doing right by the planet, by people, and by certain standards of honesty and oversight. In the world of critical minerals and mining generally, ESG is not an issue that can be ignored. It can make or break supply chains for critical minerals and everything else needed for EVs, wind turbines, and defense tech.

First, the environmental aspect of ESG. Mining is a controversial industry, and sometimes for good reason. After all, it can be pretty destructive. Mining can require massive amounts of water, create toxic waste from tailings dams that sometimes fail catastrophically, destroying habitats, and polluting rivers. Local communities and environmental groups are pushing back, leading to protests, lawsuits, and regulators slowing things down or shuttering projects entirely. A lot of the best deposits sit in sensitive ecosystems, so new mines can face years of reviews and sometimes get blocked completely.

The social side of ESG concerns such issues as displacement of local people, conflicts with indigenous communities, child labor in artisanal mines, safety issues for workers, and worker pay. When communities feel they're getting the short end of the stick, whether it be health problems, little economic benefit to their community, or having their land taken without proper consent, they can block roads, stage protests, or even take companies to court.

Governance relates to concerns such as corruption, sudden government policy flips, or even nationalization when a regime seizes assets. All of this scares off the big investors and banks needed to fund these multi-year projects. (Source)

Domestic Gaps and Long Timelines

The United States has deposits of lithium, rare earths, cobalt, copper, and many other minerals. But developing mines, and especially processing capacity, takes 10-plus years, sometimes decades, due to permitting, legal challenges, capital needs, and infrastructure shortfalls. The steps in developing a mine are lengthy and expensive: target generation, prospecting, early exploration, drilling, assaying, resource estimation, metallurgical testing, scoping studies, pre-feasibility and feasibility studies, permitting and environmental reviews, financing, mine construction, mining and processing, and finally reclamation and closure. Some mines are 100 years old, demonstrating that this is a massive, expensive, and very lengthy process.

While the United States nevertheless produces many minerals, it lacks robust midstream capabilities. (Source) This creates a vicious cycle. Limited domestic processing, discourages upstream investment and mining.

Pathways Forward and Realistic Trade-Offs

While the challenges are significant, the U.S. is not without options or momentum in terms of securing its supplies of critical minerals. Broadly, America faces three main routes: 1) it can ramp up domestic mining and processing, 2) friend-shore with allies, or 3) lean harder into diplomatic and military influence abroad to secure supplies. Given current realities and sentiments by the American voter, the first two options look most viable.

Domestic Development

The U.S. possesses substantial deposits of all sorts of minerals, including lithium, rare earth elements, copper, and many more. Therefore, the bottleneck isn't geology (although, exceptions may exist for heavy REEs - Source). It's policy, regulation, permitting delays that can stretch a decade or more, capital, and public attitudes. To unlock this potential, the U.S. need serious reform, streamlining environmental reviews without sacrificing core protections, updating outdated mining laws, and addressing NIMBY (not-in-my-backyard) opposition. This will require a deliberate public relations and education effort.

Americans need to understand that a clean energy transition, or just maintaining a high standard of living, isn't free. Energy, including renewable energy, demands mining and processing. There's no such thing as a free lunch.

We also must be honest. Meeting demand will likely require continued use of fossil fuels during the transition for baseload power, mining operations, and manufacturing.

But the United States is taking encouraging steps forward on this issue. One is the Department of War's Office of Strategic Capital, or OSC. The OSC attracts and scales private capital for national security-critical technologies and supply chains. It offers direct loans, investment fund support, and has already executed deals like loans and partnerships for rarer separation and processing capacity with companies. These efforts aim to build domestic midstream capabilities, turning raw materials into usable inputs for batteries and magnets. Here are a few examples of what the OSC has done:

• In June of 2026, the OSC extended a $725 million conditional loan commitment to Energy Fuels to scale domestic uranium and critical minerals production and supply chains. (Source)

• A $1 .25 billion conditional commitment, which includes a combination of conditional U.S. federal loans and private capital investment, was extended to Korea Zinc, the world's largest non-ferrous metal refiner and smelter, to support that company's continued operations and expansion opportunities, including plans for a U.S.-based processing and smelting facility in the next few years. (Source)

• A $700 million conditional joint loan agreement was extended to Vulcan Elements and Re-Element Technologies t0 expand domestic production of rare earth magnets, collectively producing up to 10,000 metric tons of neodymium-iron-boron magnet material in the next several years. (Source)

• Finally, a $150 million direct loan to MP Materials to add heavy rare earth separation capabilities at its Mountain Pass, California facility. (Source)

There have been other initiatives as well, including equity stakes, offtake agreements with price supports, and broader investments via the Defense Production Act. These are all steps toward rebuilding the industrial base, including building a domestic "mine-to-magnet" supply chain for rare earth permanent magnets with a goal of full self-sufficiency by 2027. (Source)

Friend-Shoring

Partnering with allies like Australia, Canada, Japan, South Korea, and others offers a complementary and likely much faster route to supply chain security. These allies have the resources and technical expertise, as well as aligned interests with the United States. Recent diplomatic efforts have focused on joint investments, shared standards, and diversified processing. (Source)

Increased U.S. Military and Diplomatic Pressure

The third option refers to using or threatening force (overtly or covertly) in high-risk

sourcing regions, such as the Democratic Republic of Congo for cobalt. These efforts include significant costs and risks. With apparent drawdowns in overseas military posture and decreasing public appetite for expanded foreign entanglements or conflicts, this path risks overstretch. Diplomacy and targeted incentives remain useful, of course, but they work best alongside the first two pillars.

Innovation and Circular Economy Efforts

This fourth measure includes advancements in battery recycling, alternative chemistries that use less scarce materials, as well as new extraction technologies in the mining sector. But these are all supplements, not substitutes for primary supply.

All these approaches all take significant time, perhaps decades, all while projected demand for critical minerals is going to grow.

Conclusion

Renewable energy may offer a cleaner future, but it rests on a foundation of critical minerals with concentrated, geopolitically exposed supply chains. The U.S. cannot afford to treat this as a secondary issue. It's central to energy security, economic strength, and strategic autonomy.

Success demands educating the public on trade-offs, sustaining policy continuity on permitting and financing, and executing a balanced domestic and friend-shoring strategy. The clean energy future requires mining and processing. Ignoring this reality won't make it disappear, even if this effort occurs in someone else's backyard.

As risk analysts, investors, policymakers, and citizens, we must prioritize diversification, innovation, and smart policy. The minerals race is on. Let's make sure America leads.

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