No More Critical Minerals for the World?

**Akshara** (0:04)
In today's episode, we'll break down two important stories. First, we'll talk about the global critical mineral outlook, and then we'll talk about the hidden gap in India's mobile internet ecosystem. Welcome back to The Daily Brief by Zerodha, where we cut through the noise to help you understand what's actually happening in the most important stories from business and markets. I'm your host Akshara, and today is Wednesday, 22nd July. Coming to the first story.
Almost everything we imagine our future running on depends on a very specific set of metals. Electric cars, solar farms, wind turbines, giant data centers, and even modern weapons all need them. Lithium, cobalt and graphite go into batteries, while copper is the wiring that holds everything together. Rare earths make the magnets that spin inside electric motors and wind turbines. And then, there's a long list of metals you've probably never heard of. Like gallium and germanium, sitting inside your phone and every computer chip. These are called critical minerals. They're critical because, for one reason or another, whether geopolitical or geographic, they're hard to secure, and yet, it's difficult to imagine a modern economy without them. Every country has its own definition of what counts as critical. And India does too. Its current list includes 30 minerals. So what makes a mineral critical? Every year, the International Energy Agency or IEA publishes a major report on critical minerals. For most of the past decade, the big question was whether the world was mining enough of these metals to keep up with demand. But this year's report puts emphasis on something else. Instead of worrying about how much is in the ground anymore, it highlights how a handful of countries control a lot of its supply. That became problematic when last year, these countries started weaponizing this control. Now, to be fair, people had been warning about this for years, but it only grabbed everyone's attention once it started disrupting industries around the world. That's just one takeaway from a report that runs over 300 pages. We can't cover all of it, but here are five things that stood out. So how critical minerals are distributed across the world is largely a geographic lottery. Some countries are simply more naturally endowed than others. But that's not the real problem, nor are we running out of these minerals anytime soon. The problem is that a lump of raw ore is useless for any factory. It first has to be cleaned and refined into an extremely pure form, and that refining is a huge, difficult, dirty industry all on its own. Unsurprisingly, China dominates this business. It refines most of the world's lithium and cobalt and almost all of its battery-grade graphite. And Indonesia plays the same role for nickel. Together, over the past two years, those two countries accounted for more than three quarters of all the new refining capacity added anywhere in the world. So, in other words, the biggest players kept expanding their lead in the minerals they already dominated. And that only made the world's dependence on them even deeper, a concentration that should make any country uncomfortable. So why doesn't everyone else just build their own refining capacity? For one, it's expensive. China's expertise has brought prices down within the country, but the same refinery outside China costs 20% to 150% more to build. And it's also roughly 50% more expensive to run, in large part because power and materials are pricier everywhere else. On top of that, the byproducts of refining rare earths are incredibly toxic, and many countries have simply been unwilling to subject their citizens to the same level of pollution. As a result, even though the world understands the importance of diversifying away from China in theory, its hold over critical minerals only grows stronger. Now, this creates a massive dependency even for countries that have critical mineral raw materials. You can dig up your own lithium in Australia, but as long as China maintains its chokehold on refining the metal, the dependency remains. But that might be changing. Many countries that have critical mineral deposits are trying to prevent it from leaving their shores. For instance, Congo, Zimbabwe, and Mozambique have all put controls on their raw cobalt, lithium, and graphite. So to access those deposits, investors have to set up refineries in those countries, giving them both investment and resilience. For years, people knew that China's dependency on refining was a huge deal, and last year, this became a little more evident. And then in April 2025, China put export controls on 7 of the heavy rare earths. These rare earths make the magnets inside electric motors, and there's no easy substitute for them.
So, the Chinese exports to the world dried up, and car makers in the US and Europe couldn't get the magnets they needed. Consequently, some auto markets slowed their production lines, while others flat out stopped building cars. This also showed up in prices for these metals. For the minerals that China restricts, there are now two prices. A cheaper one inside China, and hefty premiums for the same metals in European markets. For context, in Europe, gallium and the heavy rare earths cost around 5 times the Chinese price. Across 2025, tungsten used for making cutting tools shot up 6-fold, and lithium more than doubled. Then in October 2025, China went a lot further. It floated rules saying that any product made anywhere on earth that contains Chinese rare earths, or was even made using Chinese technology, would need a Chinese license to trade. That's a wild reach stretching into products that never even touched China.