Rare Earth & Critical Minerals
Battery metals and technology-critical elements powering the clean energy and electronics revolution
Critical Minerals Market 2026
70% of global rare earth mine output, 85-90% of processing capacity creating supply vulnerabilities
Electric vehicles driving exponential demand for lithium, cobalt, nickel, and graphite
Structural shortages emerging by 2030-2035 despite new mine developments
Lithium (Li)
"White gold" of the battery revolution
2026 Price Outlook
- • Current Status: Prices down 80-85% from $80,000/ton peak in 2022
- • 2026 Range: $12,000 - $25,000/ton (lithium carbonate)
- • Bottom Formation: Supply discipline and demand recovery supporting prices
- • 2027-2030: Expected return to $30,000-50,000 as deficits emerge
- ✓ Long-term Bull: 40% supply deficit projected by 2035
Market Dynamics
- ✓ EV Demand: Each EV requires 8-15kg lithium, market growing 25-30% annually
- ✓ Energy Storage: Grid-scale batteries adding 15-20% demand growth
- ⚠ Oversupply 2023-2025: New mines from Australia, Chile created temporary glut
- ⚠ High-Cost Producers: Many projects uneconomic below $20,000/ton
- ✓ Supply Deficit Ahead: Demand will exceed supply by 500,000 tons by 2030
Investment Strategies
Bottom Fishing Opportunity (2026-2027)
Accumulate lithium miners (ALB, SQM, PLS) during price trough. 3-5 year horizon for 200-400% returns as deficits materialize
Risk Considerations
Watch for battery technology shifts (sodium-ion), recycling rates, and new supply from Africa. Dollar-cost average entries
Cobalt (Co)
High-performance battery cathode material
2026 Price Forecasts
- • Range: $24,000 - $32,000/ton
- • Average Target: $28,500/ton
- • Volatility: High due to Congo supply risks and EV battery chemistry changes
- ⚠ Price Pressure: Battery makers reducing cobalt content (NMC 811, LFP adoption)
Supply & Demand
- ⚠ Congo Dominance: 70% of world production from DRC, geopolitical and ethical risks
- ✓ EV Batteries: Still critical for high-performance cathodes (35% of demand)
- ✓ Aerospace/Defense: Superalloys for jet engines, strategic applications
- ⚠ Substitution Trend: LFP (lithium iron phosphate) batteries cobalt-free, market share growing
- • Recycling: 20% of supply from secondary sources by 2030
Investment Strategies
Selective Exposure
Focus on diversified producers (Glencore) vs. pure-play Congo miners. LFP adoption risk requires caution on pure cobalt plays
Trading Strategy
Range trade $24k-32k. Buy Congo supply disruption risk via options. Long-term (2030+) demand uncertainty from chemistry evolution
Nickel (Ni)
Critical for stainless steel and EV batteries
2026 Price Forecasts
- • Range: $16,000 - $22,000/ton
- • Average: $18,500/ton consensus
- • Class 1 Premium: High-grade nickel (battery use) trading $2,000-3,000/ton above class 2
- ✓ 2027-2030: Supply deficit expected to push prices toward $25,000-30,000
Market Drivers
- ✓ Dual Demand: Stainless steel (70%) + battery cathodes (15%, growing rapidly)
- ✓ EV Growth: NMC batteries use 30-50kg nickel per vehicle
- ⚠ Indonesia Surge: Low-cost laterite projects flooding market with class 2 nickel
- ⚠ Class 1 Shortage: Battery-grade supply tight despite Indonesian output
- ✓ Long-term Bullish: 30% demand CAGR from batteries through 2030
Investment Strategies
Focus on Class 1 Producers
Invest in Canadian/Australian high-grade nickel miners (Vale, BHP, Norilsk) for battery market exposure. Avoid Indonesian laterite plays
Long-term Battery Theme
3-5 year horizon for nickel shortage to materialize. Target entry below $17,000, hold for $25,000+ as EV penetration accelerates
Rare Earth Elements (REEs)
17 strategic elements critical for magnets, electronics, defense
Market Overview
- • Key Elements: Neodymium, praseodymium, dysprosium, terbium (magnets), yttrium, europium (phosphors)
- • Prices 2026: Neodymium oxide $50-70/kg, Dysprosium $250-350/kg
- ⚠ China Monopoly: 70% mining, 85-90% processing, export controls possible
- ✓ Diversification Efforts: MP Materials (USA), Lynas (Australia) scaling up
Critical Applications
- ✓ Permanent Magnets: EV motors, wind turbines (2kg REEs per vehicle, 600kg per turbine)
- ✓ Defense Systems: F-35 fighter (417kg REEs), guided missiles, radar
- ✓ Electronics: Smartphones, displays, speakers, catalytic converters
- ✓ Demand Growth: 7-10% CAGR through 2030, driven by EVs and wind
- ⚠ Supply Risk: Western dependence on China creates national security concerns
Investment Strategies
Strategic Theme - Onshoring
MP Materials (MP), Lynas Rare Earths (LYC), China Northern Rare Earth. Western governments subsidizing domestic production
Geopolitical Risk Premium
China export restrictions could spike prices 50-100%. Options on REE miners for tail-risk protection in portfolios
2026-2035 Critical Minerals Outlook
Mega Trends Driving Demand
- ↑ EV Adoption: Global EV sales targeting 30-40% of new car sales by 2030 (up from 14% in 2025), each vehicle requiring 50-80kg critical minerals
- ↑ Renewable Energy: Wind and solar installations doubling to 2030, consuming massive quantities of copper, REEs, silver
- ↑ Energy Storage: Grid batteries scaling 10x to support intermittent renewables, requiring 1,000+ GWh capacity
- ↑ Electrification: Heat pumps, electric infrastructure, data centers multiplying critical mineral consumption
Supply Chain Vulnerabilities
- ⚠ China Dominance: 70% REEs, 60% graphite, 80% battery processing creates single-point-of-failure risks
- ⚠ Congo Cobalt: 70% supply from politically unstable DRC with human rights concerns
- ⚠ Long Lead Times: 10-15 years to permit and develop new mines, supply response too slow
- ⚠ Capital Intensity: $5-10 billion for world-class lithium/nickel mines deters investment
IEA Supply Deficit Projections (2035)
- Lithium: 40% deficit
- Cobalt: 25% deficit
- Nickel (Class 1): 30% deficit
- Rare Earths: 15-20% deficit
- Graphite (natural): 35% deficit
- Copper (indirect impact): 20% deficit