Processing and Logistics Emerging as Biggest Threats to Global Critical Mineral Supply, Study Finds

A new study by GEM Mining Consulting has warned that the next major disruption to global critical mineral supplies is unlikely to begin at a mine. Instead, vulnerabilities in processing facilities, chemical supplies, transport networks and industrial infrastructure are increasingly becoming the weakest links in the global mining value chain.

The report argues that while governments and mining companies have concentrated on securing new mineral deposits, the ability to convert mined materials into usable products has become the defining factor in supply security.

According to the study, production can continue at mine sites while downstream shortages in processing capacity, reagents, smelting facilities or logistics significantly reduce the availability of critical minerals for global markets.

Supply Risks Extend Beyond the Mine

GEM’s analysis highlights several hidden bottlenecks that could trigger major supply disruptions, including shortages of sulphuric acid, insufficient processing capacity, equipment export restrictions, smelter closures, power shortages, water constraints and delays in qualifying new production routes.

The consultancy notes that these interconnected weaknesses can remove substantially more supply from the market than the initial disruption might suggest.

“The next mining supply shock may start in a reagent tank, a furnace, a port, a laboratory or an equipment order book,” the report states, emphasising that resource security depends on the entire industrial network rather than mineral deposits alone.

Sulphuric Acid Identified as a Critical Vulnerability

Among the report’s key findings is the growing importance of sulphuric acid, an essential input for copper solvent extraction-electrowinning operations, nickel processing, cobalt production, lithium conversion, rare earth processing and battery precursor manufacturing.

The study estimates that more than 15% of global primary copper production—approximately 3.6 million tonnes annually—depends on acid-leach processing routes.

Under one stress scenario, a 90-day disruption in sulphuric acid supply could expose around 111,000 tonnes of copper production, while a year-long disruption could place nearly 947,000 tonnes at risk.

The report also notes that roughly half of global seaborne sulphur trade passes through the Strait of Hormuz, highlighting the strategic importance of international shipping routes for mineral processing industries. It further points to China’s suspension of sulphuric acid exports in May 2026 as evidence of tightening chemical supply markets.

As a result, GEM recommends that mining companies treat sulphuric acid availability as a strategic production constraint rather than simply another operating cost.

Processing Bottlenecks Threaten Battery Minerals

The study identifies similar structural risks across graphite and rare earth supply chains.

Although existing inventories can provide temporary protection against short-term disruptions, they offer little solution to long-term processing shortages.

The report explains that producing battery-grade graphite and permanent magnets requires specialised purification, graphitisation, coating, metallisation, advanced equipment, technical expertise and lengthy customer qualification processes that cannot be rapidly expanded.

GEM estimates that even with inventory buffers covering 28% of annual demand, a one-year disruption would still leave approximately 60% of battery-grade graphite demand outside the dominant supplier without adequate supply after the initial stockpile is exhausted.

The consultancy also warns that delays affecting the planned expansion of diversified rare earth magnet production could postpone between 4,500 and 18,000 capacity-years, depending on the severity of project delays.

Stronger Industrial Networks Needed

The report concludes that future supply resilience will depend not only on discovering new mineral resources but also on strengthening processing capacity, chemical supply chains, logistics infrastructure and supporting industrial networks.

Rather than focusing exclusively on mine development, policymakers and mining companies are encouraged to assess vulnerabilities across the entire value chain to reduce the risk of future disruptions in the global supply of critical minerals.