Critical minerals such as copper and rare earth elements are fast emerging as strategic chokepoints in the global energy transition, with supply disruptions, export restrictions and rising demand reshaping energy security and geopolitical influence, the Economic Survey 2025-26 said.
The Survey noted that the global shift to low-carbon energy systems is no longer constrained by technology alone but increasingly limited by access to key minerals required for power grids, electric vehicles, renewable energy infrastructure and data centres.
Copper prices have turned highly volatile following mine disruptions in Indonesia, Congo and Chile, fuelling concerns over medium- to long-term supply shortfalls at a time when demand is accelerating globally.
“The surge in power demand has led to a corresponding increase in demand for copper,” the Survey said, adding that prices have risen nearly a fifth in 2025 even as yields have fallen.
New Strategic Frontiers
“Metals like lithium, cobalt, nickel, copper, and rare earth elements have become the new strategic chokepoints in shaping the contours of a low-carbon economy, influencing energy security, industrial competitiveness, and geopolitical power,” it said, pointing to export curbs and trade restrictions imposed by key source countries.
The Survey observed that advanced economies are responding by promoting standards-based critical mineral markets, with an emphasis on sustainability, traceability and governance.
Initiatives such as the G7 Roadmap to Promote Standards-Based Markets for Critical Minerals aim to improve transparency and reduce concentration risks, but could also raise compliance costs.
Standards as Market Power
“While these objectives are legitimate, standards are not neutral technical tools. They are instruments of market power,” the Survey said, cautioning that high certification, digital traceability and ESG compliance costs could act as barriers for developing countries.
It flagged three key concerns for resource-rich developing economies — the risk of standards slowing project development, the possibility of being confined to low-value raw material exports, and higher mineral prices impacting affordability.
“A transition that is clean but unaffordable is neither rapid nor just,” the Survey said, calling for a more inclusive and development-oriented global framework.
India’s approach, it added, seeks to balance strategic autonomy with global integration through the National Critical Mineral Mission, alongside partnerships under the Minerals Security Partnership and the Indo-Pacific Economic Framework.