Study on Critical Raw Materials | Structural Dependencies, Supply Chain Vulnerabilities and Geopolitical Implications
Summary Document
Critical Raw Materials | Structural Dependencies, Supply Chain Vulnerabilities and Geopolitical Implications
The growing demand for minerals such as lithium, copper, nickel, cobalt and rare earths is turning critical raw materials (CRMs) into one of the major industrial challenges of the coming decades. The issue is not so much about the geological availability of resources, but rather the capacity to turn them into effectively available supply within timeframes compatible with the growth in demand. The concentration of supply chains, the long lead times needed to develop new production capacity, and the high dependence on imports represent the main vulnerability factors for Europe and for Italy.
In 2023, world trade in critical raw materials reached a value of approximately $1,925 billion. Of this, over $770 billion related to minerals directly linked to the energy transition. Behind these figures lies a transformation that now involves much of the global economy. Batteries, electric vehicles, transmission networks, photovoltaic plants, wind turbines, semiconductors and storage systems all require growing quantities of CRMs, making access to these resources an increasingly significant factor for industrial competitiveness.
Demand forecasts clearly show the scale of the phenomenon. According to International Energy Agency scenarios, all the main critical raw materials will see significant increases over the coming decades. The best-known case is lithium: under the Net Zero scenario, demand could increase by 242% by as early as 2030 and by 794% by 2050 compared to 2024 levels. Graphite also shows very sustained growth, with increases that could reach 237% by 2040.
The case of copper is particularly interesting. While lithium represents the symbol of the energy transition, copper could represent one of its main operational constraints. In 2024, global consumption reached approximately 26.7 million tonnes. The projected growth percentages are lower than those observed for other CRMs, but they are applied to a vastly higher consumption base. Even an increase of between 29% and 55% therefore implies the need to bring millions of additional tonnes of material onto the market. Given its presence in electricity grids, energy infrastructure, storage systems and electric vehicles, copper is one of the materials most exposed to the risk of imbalances between demand and supply.
Growing demand would not necessarily be problematic if the production system were able to adapt quickly. The critical point is that the supply of CRMs shows strong structural rigidity. Developing a new mining project often takes between ten and fifteen years. Further years must then be added to the extraction phase for the construction of refining, processing and recycling facilities. Overall, the expansion of supply requires timeframes that are often incompatible with the speed at which demand is growing.
This rigidity is made even more significant by the structure of global supply chains. Public debate tends to focus on mines and the availability of deposits, but a decisive part of industrial control lies in the intermediate stages. Refining and processing activities are in fact far more concentrated than extraction. In the case of rare earths, China controls approximately 80-90% of global refining capacity. For the graphite used in battery anodes, the share exceeds 90%, while for lithium and cobalt a very substantial part of global processing capacity remains located in the same country.
This means that the presence of geological resources in different parts of the world does not automatically translate into genuine diversification of supply chains. Lithium is extracted mainly in Australia, Chile and China, while cobalt comes largely from the Democratic Republic of Congo. However, a very significant share of the activities that turn these materials into products usable by industry continues to be concentrated in a small number of industrial hubs. For this reason, the opening of new mines, while important, is not on its own sufficient to rapidly reduce existing dependencies.
The European Union finds itself in a particularly exposed position. For numerous raw materials considered strategic, import dependence reaches or approaches 100%. This is the case for lithium, light and heavy rare earths, magnesium, niobium and titanium. Dependence levels are also extremely high for graphite, manganese, gallium and cobalt. In many cases, the vulnerability concerns not only the supply of the raw material itself, but also access to the refined and processed materials needed for industrial activities.
The current situation is well illustrated by comparison with the targets set by the Critical Raw Materials Act. By 2030, the European Union aims to cover at least 10% of its needs through domestic extraction activities, 40% through processing activities located within European territory, and 25% through recycling. Today, however, extraction covers only between 3% and 5% of European requirements, processing stands at around 10-15%, while the contribution of recycling remains below 5% for most of the supply chains considered. The most complex part of the European challenge therefore concerns building industrial capacity in the intermediate stages of the value chain.
Italy reflects many of the characteristics emerging at European level. Despite having strong manufacturing specialisation, the country depends almost entirely on imports for most of the CRMs used by industry. Currently, only fluorite and feldspar are extracted, distributed across 22 sites out of approximately 76 active mines present in the country.
At the same time, mapping activities carried out by ISPRA show mineral potential that is greater than generally perceived. Sardinia, Tuscany, Lazio, Piedmont, Liguria and some Alpine areas show evidence relating to numerous raw materials of strategic interest. In addition, there is a legacy of approximately 900 metalliferous mining sites that were exploited in the past and are no longer operational today. In many cases, development prospects concern not only new extraction projects, but also the possible reactivation of historic sites and the recovery of materials from mining waste and tailings. It should, however, be noted that this potential does not automatically translate into future production capacity. A range of factors, such as authorisation procedures, economic sustainability, investment and social acceptability, will continue to heavily influence the development of any projects.
Secondary resources could also play an important role. In 2023, approximately 510,000 tonnes of waste electrical and electronic equipment (WEEE) were collected in Italy. The preparation-for-reuse-and-recycling rate reached 84.2%, while overall recovery stood at 93.9%. These are significant results from a waste management perspective, but they do not automatically translate into an equally high recovery rate for the critical raw materials contained within electronic devices. The recovery of many strategic materials, in fact, continues to be limited by the technological complexity of separation and refining processes.
The prospects for CRMs will therefore depend less on the availability of resources and more on the capacity to turn them into effectively available supply. The resources exist, but they require investment, industrial capacity, authorisation timeframes and technological expertise that can hardly be developed in the short term. For Europe and for Italy, the issue is not one of achieving self-sufficiency, but of reducing the vulnerability of supply through diversification, industrial development, recycling and greater control over value chains.
