Critical mineral investment falls 9% despite booming demand in 2025: IEA
The International Energy Agency (IEA) reported that global investment in critical mineral projects fell by about 9% in 2025, ending several years of consecutive growth.
The decline was attributed to rising geopolitical tensions, price volatility, and a more cautious private investment environment, even as underlying demand for critical minerals remained strong.
Battery metals saw the steepest pullback — capital spending fell by more than 20%, the sharpest decline in over a decade, with lithium-focused companies cutting investment by around 40%.
Copper bucked the trend, with spending by copper-focused companies rising about 8%, reflecting confidence in long-term demand.
Exploration spending fell over 10% overall, with lithium and nickel exploration budgets down roughly 45%, even as government public finance commitments for critical mineral projects in advanced economies rose to around USD 65 billion — over four times the 2023 level.
Critical Minerals and Their Strategic Significance
Critical minerals are raw materials essential for modern technologies — clean energy, electronics, defence, and telecommunications — that face high supply-chain risk due to geographic concentration of production/processing, limited substitutes, or geopolitical exposure. India constituted a Critical Mineral List in 2023 through a Ministry of Mines-appointed committee, identifying 30 minerals critical to economic development and national security, including lithium, cobalt, nickel, graphite, rare earth elements (REEs), and copper.
Key Details
- 24 of the 30 identified critical minerals were notified in Part D of the First Schedule of the Mines and Minerals (Development and Regulation) Act, 1957, reserving their auction for exclusive central government allocation.
- China dominates global processing of many critical minerals (e.g., over half of global lithium refining and the large majority of rare-earth processing capacity), creating supply-chain dependency risks for importing countries including India.
- The Union Cabinet approved the National Critical Mineral Mission (NCMM) in 2025 with an outlay of ₹34,300 crore over seven years to build a resilient domestic value chain — covering exploration, mining, processing, recycling, and overseas asset acquisition.
The IEA's finding of falling private investment despite strong demand directly concerns India's mineral security strategy, since global underinvestment in extraction and processing capacity could tighten future supply for battery and clean-energy inputs India needs to import or co-develop.
KABIL and India's Overseas Critical Mineral Strategy
Khanij Bidesh India Ltd (KABIL) is a joint venture of three central public sector enterprises — NALCO, Hindustan Copper Ltd, and Mineral Exploration and Consultancy Ltd (MECL) — under the Ministry of Mines, created to identify and acquire critical mineral assets (lithium, cobalt, etc.) overseas for India's strategic needs.
Key Details
- KABIL was incorporated in 2019 as part of India's response to import dependence on critical and strategic minerals.
- KABIL has pursued lithium exploration/mining agreements abroad, including a 2024 agreement with Catamarca's state enterprise CAMYEN in Argentina covering about 15,703 hectares (part of South America's "Lithium Triangle").
- KABIL complements domestic exploration efforts by the Geological Survey of India (GSI), which undertook nearly 200 critical mineral exploration projects in the 2024-25 field season.
Falling global exploration and battery-metal investment (lithium down ~40%, exploration down ~45%) strengthens the rationale for India's state-backed overseas acquisition model through KABIL, since relying solely on private global capital flows for critical mineral supply now carries higher risk.
Global Public Finance vs Private Investment in Clean Energy Transition
A recurring UPSC-testable theme is the divergence between private capital flows (driven by short-term price/geopolitical risk) and public/government financing (driven by strategic long-term energy security goals) in clean-energy and critical-mineral value chains.
Key Details
- Public finance commitments for critical minerals in advanced economies reached about USD 65 billion in 2025 — more than four times the 2023 figure — even as private capital pulled back.
- This mirrors patterns seen in other clean-energy sub-sectors (e.g., green hydrogen, battery storage) where government schemes (PLI, subsidies, sovereign funds) step in to de-risk private investment.
This trend is directly relevant to India's own approach — schemes like the ACC battery PLI and NCMM represent the same public-finance-led de-risking strategy the IEA highlights globally.
- Global critical mineral investment fell ~9% in 2025 (IEA), the first decline after several years of growth.
- Battery metals investment fell over 20%; lithium company investment fell ~40%.
- Copper-company investment rose ~8%.
- Exploration spending fell over 10% overall; lithium and nickel exploration fell ~45%.
- Public finance commitments for critical minerals in advanced economies: ~USD 65 billion in 2025 (over 4x the 2023 level).
- India's Critical Mineral List (2023): 30 minerals identified; 24 notified in Part D, First Schedule of MMDR Act, 1957.
- National Critical Mineral Mission (2025): outlay of ₹34,300 crore over seven years.