Mineral dependence of the energy transition: how exposed are the United States, European Union, Japan, and Korea?

The clean-energy build-out runs on a narrow basket of minerals. The IEA’s Critical Minerals Policy Tracker (IEA 2024) lists lithium, cobalt, nickel, rare-earth elements, and graphite among the minerals whose physical supply could bind net-zero pathways, and Gielen (2021, IRENA, Critical Materials for the Energy Transition) quantified demand multiples of 3-10x by 2030 for the same set. The USGS Mineral Commodity Summaries 2024 catalogues where each of these minerals is produced. This page computes the statistical concentration of refined-stage exports (a proxy for market power that includes both mining and refining, since the traded good is typically an intermediate) across 5 minerals in 2024, and measures the single-supplier exposure of four major importing blocs: the United States, the European Union (27 members), Japan, and the Republic of Korea.

Research question and method

For each critical mineral we ask two questions. First, how concentrated is the global export market? We measure this with the Herfindahl-Hirschman index of exporter shares, computed on the sum of export values across the HS6 lines that map to the mineral (CEPII BACI, release 202501). The US Department of Justice and Federal Trade Commission Horizontal Merger Guidelines(DOJ/FTC 2023, section 2) classify markets with HHI above 2,500 as highly concentrated on the 0-10,000 scale we use. The figures and lede flag the red zone at 2,500 accordingly. Second, how exposed is each bloc’s import portfolio to a single external supplier? We measure this with the import-weighted average of the top-1 supplier share per HS6, taken from the OECD geodep database (Arjona, Connell & Pisu 2023, ECO/WKP 1775), whose latest vintage is 2022.

A caveat the literature insists on (Bazilian et al. 2020, Nature; IEA 2024): BACI captures cross-border trade, not mined production. A country that mines ore and refines domestically will appear smaller in trade shares than in mining shares. The refined-stage HS6 lines used here (lithium carbonate, nickel mattes, cobalt unwrought, rare-earth compounds, natural and artificial graphite) partially offset this by capturing the step at which the mineral crosses borders into battery, magnet, or smelter supply chains. We treat this as a proxy for refined-supply concentration and cite the USGS/IEA figures for the mining layer where they diverge.

Figure 1. Global export concentration (HHI) per critical mineral, 2024

HHI aggregates each mineral’s component HS6 lines before computing exporter shares, so cobalt ties together HS 810520 (cobalt mattes and unwrought) and 810530 (cobalt waste), and so on for the other minerals. The red band marks the DOJ/FTC “highly concentrated” threshold of 2,500.

Figure 2. Top-1 exporter share per mineral, 2024

HHI is an aggregate measure; the identity of the top exporter is the operational fact. For each mineral we report the single largest exporter and its share of global exports (summed across component HS6 lines). Myanmar’s position in rare earths reflects the ore-to-China refining corridor documented in USGS (2024) and IEA (2024), where mined concentrates leave Myanmar for separation plants in China; cobalt trade is dominated by the Democratic Republic of Congo (Bazilian et al. 2020); lithium concentrates around Australia and Chile; graphite around China.

Figure 3. Import-dependence matrix: United States, European Union, Japan, Korea

For each bloc × mineral, we report three statistics computed from OECD geodep 2022 (Arjona, Connell & Pisu 2023) at the HS6 level, then aggregated to the mineral level weighted by each line’s absolute import dependency import_dpt: (i) the import-weighted top-1 supplier share; (ii) the identity of the modal top-1 supplier across the mineral’s HS6 lines; (iii) the import-weighted mean of the Herfindahl index over bilateral import shares (geodep c1, scaled 0-1). Values tag the bloc’s current external vulnerability: higher is more concentrated. The EU figures aggregate across all 27 member states and thus average over member-state procurement patterns.

Figure 4. China’s share of global critical-mineral exports, 2010-2024

Chinese export-market share in critical minerals has evolved very differently across the basket. Graphite has tightened toward Chinese dominance; rare-earth-compound exports from China have trended down as Myanmar ore-plus-offshore-refining routes captured a growing share; cobalt exports are dominated by the Democratic Republic of Congo rather than China in the trade statistics (China’s role is in refining, not cross-border trade of raw or intermediate cobalt). The IEA Critical Minerals Policy Tracker (2024) documents China’s 2023-2024 export controls on gallium, germanium, and graphite, which the downstream industrial-policy literature (European Commission 2023 Critical Raw Materials Act; US Department of Energy 2023 Critical Materials Assessment) has taken as the binding constraint on Western diversification plans.

Figure 5. Export-HHI trajectory per mineral, 2010-2024

The cross-sectional HHI in Figure 1 is a snapshot; the trajectory shows whether concentration is tightening (rising line) or diversifying (falling line). The ICMM Mining Contribution Index methodology (ICMM 2022) and the Van der Ploeg (2011, JEL) resource-curse survey both emphasise that static concentration measures miss the direction of structural change. The red dashed band at HHI 2,500 marks the DOJ/FTC “highly concentrated” threshold.

Figure 6. Mineral-export-to-GDP versus real GDP growth, 2010–2024

Chile’s lithium-carbonate exports (HS 283691) rose from $302.3M in 2015 to $2.8B in 2024, a rise Gielen (2021, IRENA) and the IEA Critical Minerals Market Review (2024) tie directly to EV-battery demand. Did this “lithium boom” raise aggregate growth, as the Sachs–Warner (1995) canonical resource curse would predict to lower, or as the Mehlum–Moene–Torvik (2006) “institutions matter” correction suggests to raise when the country has grabber-proof institutions? We plot the critical-mineral export basket as a share of nominal GDP against real-GDP growth (WDI NY.GDP.MKTP.KD.ZG) for six mineral-exposed economies.

Figure 7. Lithium and cobalt single-source concentration, 2010–2024

Lithium and cobalt are the two minerals most directly binding on battery supply chains (IEA Global Critical Minerals Market Review 2024). The IEA and the European Commission Critical Raw Materials Act (2023) both single them out as the most supply-concentrated among the transition-critical basket. We isolate those two minerals here and plot the share of global exports coming from the single largest exporter each year, together with the identity of that top-1 country, across 2010–2024. The graph answers the binding policy question: how much of the world lithium or cobalt trade depends on a single origin, and is the dependence concentrating or diversifying?

Figure 8. World export-value index per critical mineral, 2010-2024 (2010 = 100)

Concentration (Figures 1, 5) and shares (Figures 2, 4, 7) are intensive measures and do not say whether the underlying market is small and growing or large and stagnant. The IEA Critical Minerals Market Review 2024 and Gielen (2021, IRENA Tech Paper 5/2021) project 3-10x demand multiples for the critical-mineral basket by 2030. Here we benchmark each mineral’s total world-export value (summed across its component HS6 lines) against its 2010 level. A line above 100 in 2024 means the world cross-border trade in that mineral has grown nominally over 14 years; a line near 100 means it is roughly flat in nominal USD. Values are nominal because Pink Sheet does not publish prices for lithium, cobalt, rare earths, or graphite, so a real-price deflator at the mineral level is not available. The index therefore conflates price and quantity but still surfaces order-of-magnitude growth.

Policy implications

The IEA Critical Minerals Policy Tracker (2024) benchmarks national diversification targets and strategic stockpiles against the same HHI and top-1-share metrics we compute here. Three observations follow from the data above. First, the ordering of concentration matters for sequencing policy: cobalt and graphite sit in the red zone today, lithium hovers just below it, and nickel and rare earths are moderately concentrated but rising (rare-earth concentration via Myanmar’s rise; nickel via Indonesia’s 2014 ore-export ban and subsequent nickel-pig-iron consolidation). Second, the US, EU, Japan, and Korea face different single-supplier risks across minerals: in Figure 3 the highest import-weighted top-1 shares are concentrated in graphite and rare earths, which is consistent with the industrial-policy response enshrined in the EU’s Critical Raw Materials Act (2023) and the US Department of Energy’s Critical Materials Assessment (2023). Third, China’s share trajectory (Figure 4) differs by mineral: the common narrative of “China dominates everything” is a simplification that, once broken down by HS6 line, points to very different leverage points for import-demand blocs.

Caveats on interpretation. (i) BACI captures cross-border trade at the HS6 level, not domestic production or refining; the refined-stage HS6 lines used here capture most of the traded step but not all of the value chain. (ii) Cobalt in particular shows a large gap between mining shares (USGS 2024: DRC ≈ 74% of mined cobalt) and refining shares (IEA 2024: China ≈ 70% of refined cobalt), because unrefined cobalt hydroxide leaves DRC for China before re-export as sulphate or metal. (iii) geodep 2022 predates the 2023-2024 shifts in graphite export licensing and Indonesian nickel-smelting expansion, so the import-dependence matrix in Figure 3 is a lower bound for the present-day exposure of US, EU, Japan, and Korea.

References

• Arjona, R., Connell, W., & Pisu, M. (2023). “An analysis of international trade interdependencies.” OECD Economics Department Working Paper ECO/WKP 1775. Paris: OECD Publishing.
• Bazilian, M., Bradshaw, M., Gabriel, J., Goldthau, A., & Westphal, K. (2020). “Four scenarios of the energy transition: Drivers, consequences, and implications for geopolitics.” WIREs Climate Change 11(2): e625. See also Bazilian (2018), “The mineral foundation of the energy transition,” Extractive Industries and Society 5(1): 93-97.
• European Commission (2023). Regulation on establishing a framework for ensuring a secure and sustainable supply of critical raw materials (Critical Raw Materials Act). COM(2023) 160 final.
• International Council on Mining & Metals (2022). Mining Contribution Index (MCI) 2022. London: ICMM.
• Mehlum, H., Moene, K., & Torvik, R. (2006). “Institutions and the Resource Curse.” Economic Journal 116(508): 1–20.
• Sachs, J. D., & Warner, A. M. (1995). “Natural Resource Abundance and Economic Growth.” NBER Working Paper 5398.
• Van der Ploeg, F. (2011). “Natural Resources: Curse or Blessing?” Journal of Economic Literature 49(2): 366–420.
• Gielen, D. (2021). Critical materials for the energy transition. IRENA Technical Paper 5/2021. Abu Dhabi: International Renewable Energy Agency.
• International Energy Agency (2024). Critical Minerals Policy Tracker 2024. Paris: IEA.
• International Energy Agency (2024). Global Critical Minerals Market Review 2024. Paris: IEA.
• US Department of Energy (2023). Critical Materials Assessment. Washington DC: DOE Office of Energy Efficiency and Renewable Energy.
• US Department of Justice & Federal Trade Commission (2023). Horizontal Merger Guidelines.
• US Geological Survey (2024). Mineral Commodity Summaries 2024. Reston, VA: USGS. Available via pubs.usgs.gov/publication/mcs2024.