Raw materials that shape the future: there aren't many, but they're worth their weight in gold

When talking about critical raw materials or minerals, terms are often combined and mixed for the sake of simplicity. Understanding them may not be entirely trivial, especially since each country determines for itself which elements or compounds it considers critical from a strategic point of view.

Terminologically, rare earth elements are the easiest to identify. They include 15 elements of the periodic table, which are referred to as lanthanides, as well as scandium and yttrium. When talking about rare earth metals, the emphasis is only on the fact that these elements are technologically processed – first mined in the form of ores, from which rare earth oxides are chemically separated, and then further reduced to produce the final pure product.

Many of them are considered by countries around the world – including the European Union and the United States – to be strategically important. In addition, however, they usually include elements such as lithium, cobalt, nickel, graphite, copper, and platinum, as well as lesser-known elements such as germanium, gallium, and palladium.

It is not their rarity that makes them precious

Although critical raw materials are the subject of fierce political and commercial battles, particularly between the US and China, their value does not lie in their scarcity on the Earth's surface.

The key to a green tomorrow or military and economic superiority

The importance and value of critical raw materials lies in something completely different. There are three essential dimensions to consider.

First, many elements do not occur in the ground in a sufficiently concentrated form to be mined cheaply and efficiently. In addition, for many countries that do not have deposits that are profitable to mine, it can be difficult to import these raw materials. This is especially true if the supply chain for a given raw material is controlled by a geopolitical rival.

This is the reality for most Western countries, led by the US, as China controls critical raw materials. From a global perspective, China mines about one-fifth of lithium, two-thirds of rare earth elements, and nearly 90 percent of graphite.

However, mining itself is only a small link in the chain; much more important is China's dominant role at its center—in processing mined ores into individual elements in the form needed for manufacturing purposes. China processes almost all of the graphite on the market, more than 90 percent of rare earth metals, approximately 80 percent of cobalt, and roughly 70 percent of lithium.

However, the most important piece of the puzzle is still missing: why the whole world is chasing after critical raw materials. This is becoming increasingly easy to see—they are essential for the functioning of the most advanced digital technologies and artificial intelligence, while also being the cornerstone on the road to a dream green tomorrow.

Lithium, cobalt, nickel, and graphite form the backbone of modern batteries—their uses range from electric cars to large-capacity energy storage.

For example, according to calculations, the production of one LFP (lithium-iron-phosphate) battery for an electric car with a capacity of 30 kilowatt-hours (kWh) requires around 29 kilograms of graphite, 15 kilograms of copper, three kilograms of pure lithium, and a few other raw materials. The production of an NMC (nickel-manganese-cobalt) battery with the same capacity requires around 26 kilograms of graphite, three and a half kilograms of pure lithium, and four kilograms of cobalt.

It should be added that a battery with a capacity of 30 kWh is basically the lower limit, with more powerful models having a capacity of around 100 kWh, so the figures mentioned above can easily be tripled. Simple math shows that if roughly two million electric cars were sold in Europe last year, tens to hundreds of thousands of tons of the aforementioned raw materials are needed to meet demand. And that's just for electric car batteries in Europe.

Copper and aluminum are essential for distribution networks, cables, and electric motors, while rare earths such as neodymium and dysprosium power the magnets in wind turbines. Gallium and germanium are used in the manufacture of semiconductors, state-of-the-art chips, optical cables, and radars.

Rare earths are widely used not only in commercial but also in military industries. Various sources report that more than 400 kilograms are used in the production of a single F-35 fighter jet, and even more in the production of destroyers and submarines. They can be found in guided missiles, radars, and engines.

Given the wide applicability of critical raw materials in modern dual-use technologies, it is no surprise that demand for them is growing significantly. Last year, demand for lithium grew by 30 percent, while demand for rare earths, nickel, cobalt, and graphite grew by six to eight percent. There is no indication that this trend will change in the coming years. On the contrary, the West's struggle for independence from China and efforts to develop its own capacities will only intensify.