Factsheets

Minerals are integral to the functioning of modern society. They are found in alloys, magnets, batteries, catalysts, phosphors, and polishing compounds, which in turn are integrated into countless products such as aircraft, communication systems, electric vehicles (EVs), lasers, naval vessels, and consumer electronics and lighting.¹ However, some of these minerals are in limited supply and their extraction incurs high environmental and financial costs. Given their necessity in a plethora of technological applications, concern exists over whether supply can meet the needs of the economy in the future. Material criticality can be assessed in terms of supply risk, vulnerability to supply restriction, and environmental implications.² Rare earth elements (REEs) are a group of 17 elements, many of which are vital for renewable energy and energy storage.1 Global demand for critical materials is expected to rise over the next several decades as the world shifts to clean energy. Demand for lithium and graphite, used in EV batteries, is forecast to increase 4,200% and 2,500% by 2040 respectively.^3,4 Unless action is taken, the U.S. could face an annual shortfall of up to $3.2B worth of critical materials.⁵ The average amount of critical materials needed to generate a new unit of power capacity has increased by 50% since 2010.³

Materials Criticality Matrix, Medium Term (2025-2035)⁴

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Critical Materials Categories

Energy Critical Elements

• The Energy Act of 2020 defines critical materials and minerals as those that serve an essential function in manufacturing and have high risk of supply disruption, with significant consequences for the U.S. economy or national security.⁷
• In 2022, USGS published a list of 50 critical minerals, including dysprosium, nickel, and platinum.⁸ The U.S. is 100% reliant on imports for 10 critical minerals and more than 70% reliant on imports for another 10.⁸
• The 2023 critical materials list published by the U.S. DOE includes 18 critical materials for energy, and 50 critical minerals determined by USGS. Among the DOE’s 18 critical materials for energy, 4 are not on the USGS list: copper, electrical steel, silicon, and silicon carbide.⁹ 
• Critical materials for energy are determined based on short- and medium-term assessment⁹ of the material’s supply risk and importance to the energy sector⁶.
• DOE found seven materials to be critical in the short-term (to 2025): dysprosium, neodymium, gallium, graphite, cobalt, terbium, and iridium. These materials are used in magnets, batteries, LEDs, hydrogen electrolyzers, fuel cells, and power electronics.⁶Over the medium term (2025–2035), nickel, platinum, magnesium, SiC, and praseodymium become critical, primarily due to their roles in batteries and vehicle lightweighting.⁶
• The DOE’s Critical Materials Institute has more recently focused on rare earth materials, battery materials (lithium, cobalt, manganese, graphite), indium, and gallium.¹⁰ DOE strategies for addressing material criticality include diversifying supply, developing substitutes, and improving reuse and recycling of critical materials.¹¹
• The materials on the 2023 DOE Critical Materials List inform eligibility for the Inflation Reduction Act (IRA) 48C tax credit.⁹ 
• Energy critical elements (ECEs) are elements integral to advanced energy production, transmission, and storage. An element can be classified as energy critical because of rarity in Earth’s crust or in economically extractable ore deposits, or lack of availability in the U.S.¹² 
• 29 possible ECEs were identified: 13 REEs, 5 photovoltaic ECEs, 6 platinum group elements, and 5 other ECEs. The U.S. is reliant on imports for more than 90% of most ECEs.¹²
• Photovoltaic ECEs include gallium (Ga), germanium (Ge), selenium (Se), indium (In), and tellurium (Te).¹²
• Platinum group elements (PGEs) are necessary components of fuel cells and have potential for other advanced vehicle uses.¹² The U.S. used 90% more platinum in 2022 than in 2019.⁸Platinum (Pt) and palladium (Pd) production are concentrated in South Africa (67% and 34%, respectively) and Russia (13% and 44%, respectively). ⁸
• Lithium (Li) is an element of growing importance due to its use in batteries for cell phones, laptops, and electric vehicles. Australia, Chile, China, and Argentina accounted for 96% of world lithium production in 2023.⁸

World Lithium Production, 2013 vs 2023 (t)⁸

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• Efforts are underway to extract elements from lower quality resources. Researchers have recently developed a method for extracting lithium, vanadium, and uranium from seawater.¹³
• Copper, one of DOE’s critical energy materials⁹, is a key material in electrical wiring and appliances¹⁴. At current production levels, existing copper resources may only last another 60 years, and extraction will become more energy intensive as ore quality decreases.¹⁴ 
• Top copper producing countries include Chile (22.7%), Peru (11.8%), Congo (11.4%) China (7.7%), and the U.S. (5%).⁸
• Copper is unique in that it does not lose its physical and chemical properties when it is recycled.¹⁵ In 2023, 33% of copper came from recycled sources. Old (post-consumer) scrap accounted for almost 15% of this total recovered scrap, while more than 85% was new (manufacturing) scrap.⁸

Rare Earth Elements

• REEs are a particularly important group of critical minerals. Although these minerals are moderately abundant in Earth’s crust, they are distributed diffusely and thus difficult to extract in large quantities.¹⁷
• REEs are used as components in cell phones, energy efficient lighting, magnets, EV batteries, and catalysts for automobiles and petroleum refining.¹⁸
• There are 17 REEs, including the lanthanide elements (atomic numbers 57 through 71), scandium (Sc), and yttrium (Y).¹ The REEs terbium (Tb), neodymium (Nd), praseodymium (Pr), and dysprosium (Dy) are key components of the permanent magnets used in wind turbines.18 Substitutes for REEs are available but are less effective.⁸
• In 2023, China produced 240 kt of REEs in 2023, or 69% of global production, and possesses reserves of 44 Mt.⁸ The U.S. is the second largest REE producer with 43 kt in 2023, and estimated reserves of 1.8 Mt.⁸ Burma had a 217% increase in REE production between 2022 and 2023, making it the 3rd largest producer in the world.⁸
• Demand for ECEs, coupled with rising mining standards in many countries, has caused production to shift to countries with low costs and lax environmental regulations, increasing the impacts of ECE extraction. Developing nations naturally contain greater quantities of ECE ore deposits.¹² 
• The U.S. used $613M of REEs in 2016, which generated $496B in economic activity in other sectors, including oil refining, medical devices, and automotive manufacturing.⁴

Rare Earth Element Predicted Shortfall¹⁶

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Life Cycle Impacts

• Mining is a destructive process that disrupts the environment and widely disperses waste. Chemical compounds used in extraction can enter the air, surface water, and groundwater.¹⁹
• The grinding and crushing of ore containing critical elements often releases dust, which can have carcinogenic and negative respiratory effects on exposed workers and neighbors.¹⁹
• Mining can also negatively impact human rights. For example, the Democratic Republic of Congo is the world’s leading producer of cobalt, used in EV batteries, but child labor is routine there as a result of lax regulation and oversight.²⁰
• Some REE deposits contain thorium and uranium, which pose significant radiation hazards. While thorium and uranium can be used to generate nuclear energy, they are rarely economically recoverable and thus are left in the tailings, where they pose risks to environmental and human health.¹²
• Recycling critical materials results in much lower human health and environmental impacts compared to mining virgin material. Nevertheless, improper recycling and recovery procedures, which often occur in developing nations where regulations to limit worker exposure are lax or nonexistent, can lead to exposure to carcinogenic and toxic materials.¹⁹

Solutions and Sustainable Alternatives

• Recycle electronics. Metals recovered from electronic products such as cell phones, televisions, and computers can be effectively reused or recycled. Currently, less than 1% of REEs are recycled.²¹
• Buy refurbished rather than new products. Rent products from companies with take-back programs that require material recycling.¹²
• IRA clean vehicle tax credits are intended to build domestic supply chains for critical materials. To be eligible, 40% of the value of the critical minerals contained in the EV battery must be sourced domestically or from U.S. free-trade partners in 2023, with the percentage increasing to 80% in 2027.²²