What separates critical minerals from strategic minerals - and why does it matter? Different countries define these terms differently. The US excludes fossil fuels from its critical minerals list, while China leverages rare earth elements as strategic tools. The EU’s Critical Raw Materials Act identifies 34 critical and 17 strategic raw materials. This video breaks down the definitions, explains China’s dominance in rare earth processing (87-88% of global output), and covers why neodymium, lithium, and cobalt are central to the global energy transition.
Video transcription
What Are Critical and Strategic Minerals?
Critical minerals, also known as strategic minerals - these terms may seem synonymous, but countries define them very differently.
The United States has a federal strategy for critical minerals, similar to Australia. China and Japan have detailed policies for strategic minerals. One major difference is that the US explicitly excludes fossil fuels like oil and gas from its definition.
The EU Critical Raw Materials Act
In November 2023, the European Parliament and the Council reached a preliminary agreement on the Critical Raw Materials Act. They created a list of 34 critical raw materials, including 17 strategic raw materials. This agreement also added aluminum to the list of minerals and metals covered by the Critical Raw Materials Act.
The assessment screened 70 candidate raw materials comprising 67 individual materials and three material groups, which include 10 heavy rare earth elements, five light rare earth elements, and five platinum group metals.
Four new materials were also added: helium, neon, krypton, xenon, and roundwood. Titanium metal was assessed separately from titanium, while aluminum and bauxite were merged for consistency.
Although copper and nickel did not meet the critical raw material threshold, they were included on the list as strategic raw materials under the Critical Raw Materials Act.
China's Dominance in Critical Mineral Processing
Analyzing key raw materials like lithium, copper, cobalt, nickel, and rare earth metals reveals an interesting global picture highlighting China's clear and systemic dominance in these sectors.
China processes about 87-88% of rare earth metals, nearly 60% of lithium, and over 60% of cobalt. Additionally, China has almost complete control over the deep processing of graphite.
Rare Earth Elements Explained
A more accurate term for rare earth metals is rare earth elements, which include 17 metals. 14 are from the lanthanide family, with the remaining three being scandium, yttrium, and lanthanum.
Rare earth elements are crucial in producing permanent magnets, especially neodymium, which is used to make the strongest permanent magnets available. These neodymium magnets are a combination of neodymium, iron, and boron.
Applications of Rare Earth Magnets
Wind turbines and electric car engines require neodymium permanent magnets, and these green technologies are the main drivers of global demand for neodymium, praseodymium, dysprosium, and terbium.
Permanent magnets are also essential for smartphones, audio equipment, robots, factory automation, aviation equipment, and high-speed elevators.
The Refining Challenge
Even though the United States and Australia are increasing production, China's geographic concentration of refining is still a significant challenge.
China's Strategic Mineral Classification
China's strategic metals, though not officially classified, can be divided into two groups: strategic scarcity minerals and strategic advantage minerals.
Strategic scarcity minerals are those for which China does not have enough domestic production to meet its needs, such as oil, gas, iron, and copper.
Strategic advantage minerals are those that China produces and processes in large quantities, such as rare earth elements, which can be used as strategic leverage due to China's dominance.