G7 Releases Critical Minerals Action Plan on the Heels of IEA’s 2025 Critical Minerals Outlook

IEA’s 2025 Report identifies several critical developments:

1. Increasing demand for key minerals in the energy sector—copper, lithium, nickel, graphite and rare earths—in 2024 driven by energy applications (electric vehicles, battery storage, renewables and grid networks). Demand for lithium grew by nearly 30%, and demand for nickel, cobalt, graphite and rare earths rose by 6-8%. The energy sector accounted for 85% of demand growth for battery metals (including lithium, nickel, cobalt and graphite).
2. While demand has increased, prices continued to decline in 2024 due to significant supply increases, led by China, Indonesia and the Democratic Republic of Congo (DRC). (Both Indonesia and DRC have significant Chinese investments, as well.) Prices for various battery metals continued to decline in 2024, with the price of lithium declining by over 80%, and prices for graphite, cobalt and nickel declining by 10-20%.
3. The low prices have also dampened investment, despite growth in demand. In 2024, investment spending rose only by 5%, compared to a 14% in 2023.
4. Based on the project pipeline in the base case scenario, expected supply of energy minerals is slated to meet projected demand, with significant exceptions for mined supply of copper and lithium. The prospects for bringing new supply online for copper are particularly challenged by “declining ore grades, rising project costs and a sharp slowdown in new resource discoveries.”
5. Based on the project pipeline, mineral supply chains are slated to remain concentrated over the next decade for both mining and refining, but to a greater degree in refining. China is the dominant refiner by geography and ownership (owing, for example, to its significant investment in nickel-refining operations in Indonesia) for nearly all energy minerals.
6. New battery chemistries bring new vulnerabilities: Lithium iron phosphate (LFP) batteries supply nearly half the global electric car market (up from 10% in 2020) and other technologies, such as sodium-ion batteries, are emerging. China controls 98% of LFP cathode material production and dominates the downstream supply chain of sodium-ion chemistries.
7. Export control measures targeting minerals pose additional risks to mineral supply chains. Since July 2023, China has introduced export control restrictions or bans targeting various minerals, including, among others, gallium, germanium, tungsten, antimony, rare earth elements, as well as LFP technologies. Also, in February 2025, the DRC announced a temporary (four-month) suspension of cobalt exports due to declining prices (which should expire in late June unless extended).
8. In recent years, concentration in supply chains—particularly in the refining and processing segments—has increased, with growth driven by the leading suppliers. Diversification will likely require market-based mechanisms, international partnerships and investment in new technologies, as discussed further below.

Pathways to Diversification—Implications for Stakeholders
While projects exist that could improve diversification of mineral supply chains, due to market challenges and the linkages between segments of mineral supply chains, policy support will be required for diversification to materialize. Relevant policies include market-based mechanisms, international partnerships, and support for new technologies. These are discussed further below. The G7 Critical Minerals Action Plan—released on June 17, 2025, and endorsed by Australia, India, and the Republic of Korea—focuses on each of these areas. This Plan builds upon the G7 Five-Point Plan for Critical Minerals Security released in 2023, which focuses on forecasting long-term supply and demand through the IEA, developing new mining and refining projects through co-investments, supporting recycling capabilities, promoting innovations, and coordinating on short-term supply disruptions through the IEA.

Market Challenges and Market-Based Mechanisms. A host of market-related challenges pose barriers to diversifying mineral supply chains. For example, the IEA 2025 Report provides that capital costs for projects are 50% higher than those for projects in the top producing country. Also, mineral markets are impacted by price volatility, which can inhibit private sector investment despite projected demand increases. This can be a particular challenge for small-volume minerals, which have fewer trades and do not have future contracts. Finally, many minerals are byproducts of primary commodities. In these cases, the drivers of demand tend to be the primary commodities versus the small-volume byproduct commodities.

While public financing support is important, there is a recognition that market-based mechanisms are also needed to support the sustainability and economic viability of operations. These include price stabilization measures and volume guarantee mechanisms, which are discussed below.

• Price stabilization measures. This includes pricing support through contracts for differences and price floors under which a government or intermediary sets a reference price for a mineral. If the price falls below the reference price, the producer would be compensated for the difference and if the price exceeds the reference price, the producers would return the difference to the government or intermediary. This model has been used in markets for renewable energy and energy infrastructure markets to de-risk investments. In the context of minerals, due to the underdevelopment of markets and concentration of supply chains of various minerals, it may be challenging to set a reference price for minerals as prices for various minerals—particularly small-volume, concentrated minerals, are opaque and rely on bilateral contracts. The IEA 2025 Report provides that determining appropriate references prices may require “historical market data, forward prices and negotiated benchmarks with industry stakeholders.” Initiatives to increase transparency into prices, including costs that should be factored into prices such as labor and environmental costs and market-based returns, could potentially assist with determining reference prices.
• Volume guarantee mechanisms. Guaranteed demand through offtake agreements could support the economic viability of producers. This could include government purchase commitments for minerals prioritized for stockpiling, private sector offtakes or a combination of two, or demand-side incentives for mineral supply chain projects that meet certain standards. Relevant tools include:

-  Potential recommendations related to stockpiling by the Strategic and Critical Materials Board, which was established in January 2025 and required under the FY 2023 National Defense Authorization Act. The Board is chaired by the Assistant Secretary of Defense for Industrial Base Policy and comprises representatives from the Departments of Defense, Energy, State and Interior, as well as the Armed Services Committees of the House and Senate.

-  Demand aggregation for group-purchasing arrangements consistent with antitrust law; and

-  Title VII of the Defense Production Act, which authorizes the President to “upon finding that conditions exist that may pose a direct threat to the national defense or its preparedness programs, … consult with representatives of industry, business, financing, agriculture, labor, and other interests in order to provide for the making by such persons, with the approval of the President, of voluntary agreements and plans of action to help provide for the national defense” (which is defined broadly to include “programs for military and energy production or construction, military or critical infrastructure assistance to any foreign nation, homeland security, stockpiling, space, and any directly related activity.”). Voluntary agreements can allow the federal government and private sector to share more information than may be permitted under antitrust laws, and companies cooperating in the voluntary agreement can bring a defense to actions brought under antitrust laws with respect to activities within the scope of the agreement. President Trump’s May 23 2025 Executive Order, Reinvigorating the Nuclear Industrial Base, requires the Secretary of Energy to seek voluntary agreements with nuclear energy companies with respect to issues involving nuclear fuel supply. Previously, in connection with the COVID pandemic, in August 2020, the Federal Emergency Management Agency (FEMA) established a voluntary agreement to speed up the provision of needed personal-protective equipment (PPE) and medical resources. The agreement allowed the federal government and private sector to share information regarding supply chains and challenges, capacity and pricing considerations (among other things) and was implemented through a series of plans of action, each one of which focused on one type of PPE. The agreement provided for significant opportunities for participation including comments to develop the agreement, consultation with subject matter experts, and participation through an advisory committee.

-  Incentives for downstream companies that enter into long-term agreements to support diversified sources of production.

-  Standards-based markets, which would provide that mining or refining projects that meet certain standards with respect to markets, sustainability and traceability are eligible for certain market access policies. Under the G7 Action Plan, G7 countries (as well as possibly countries that endorsed the Plan) will, by the end of 2025, develop a “roadmap to promote standards-based markets for critical minerals,” which will provide criteria for minimum thresholds for standards-based markets, including traceability standards. Per the Plan, the roadmap will be developed in collaboration with stakeholders, including industry, resource-rich countries and international organizations. Relevant standards include, for example, Copper Mark, Mining Association of Canada’s Towards Sustainable Mining (TSM), World Gold Council’s Responsible Gold Mining Principles, the Initiative for Responsible Mining Assurance (IRMA), and International Council on Mining and Metals (ICMM’s) Mining Principles. The Consolidated Mining Standard Initiative is exploring consolidation of a number of these standards. As part of this roadmap, G7 countries and other countries may also consider the set of minerals to be initially included in standards-based market policies.

The IEA 2025 Report provides applications that drive demand for various minerals, including energy, technology, high-performance materials and defense, which could assist with prioritization of minerals for stockpiling, standard-based markets and/or engagement with industry to inform the use of tools.

International Partnerships. Global collaboration is critical to advancing diversification of mineral supply chains. This could involve:

• Leveraging capabilities of international partners across the various segments of mineral supply chains (including mining and upstream, midstream and downstream processing) by sharing mineral-specific information regarding capabilities at each segment and coordinating to ensure that feedstock from one partner can be used in a subsequent stage of the supply chain by coordinating on specifications.
• Pooling and supporting investments in projects to support and de-risk prioritized projects. The G7 Action Plan provides that signatory countries will encourage multilateral development banks and private sector lenders to support standards-based critical minerals projects, and advance coordination among financing agencies in G7 countries.
• Coordinating on developing and implementing market-based mechanisms such as those discussed above. This could build upon extensive reporting on non-market policies and practices by the U.S. and Norwegian governments in January 2025. The U.S. Department of Commerce is assessing these issues in its ongoing Section 232 investigation into the national security impacts of processed critical minerals (discussed in our article here). Given the broad scope of the investigation and the complexity of the supply chains, the Administration may consider tariff-rate quotas in lieu of tariffs, exclusions of certain products where particular requirements are met (such as compliance with U.S.-Mexico Canada rules of origin or certain U.S. manufacturing requirements), and components of the supply chain to be part of sectoral arrangements the U.S. Trade Representative is negotiating with certain countries and sectors, which would include measures to address non-market policies and practices.
• Coordinating on developing standards-based markets as discussed above and traceability systems, which can obtain data on a product’s origin, ownership (including chain of custody) and physical evolution. This could assist with developing programs for minerals eligible for market access based on the criteria established under the G7 Action Plan and on compliance with various tariff programs under which U.S. content or potentially content from a set of countries may be exempt from tariffs or global measures to counter forced labor. This could include Uyghur Forced Labor Prevention Act restrictions on imports into the U.S. tied to forced labor in Xinjiang, Section 307 of the Tariff Act of 1930 restrictions on imports made in whole or in part from forced labor, and disclosure obligations stemming from the UK and Australian Modern Slavery Acts and Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act. (These are discussed in our article here.)
• Supporting capacity building and responsible mining in mineral-rich emerging market and developing countries and advancing collaboration with these countries. In this regard, the G7 Action Plan highlights initiatives such as the World Bank-led Resilient and Inclusive Supply Chain Enhancement (RISE) Partnership. Also, the U.S. Department of State’s Energy and Minerals Governance Program (EMGP) provides “assistance to governments to develop national and provincial investment frameworks for competitive mining investments in key minerals.” In addition, as discussed in our article here, the Export-Import Bank of the United States’ Supply Chain Resiliency Initiative provides government-financed offtake for raw mineral feedstock for domestic processing, presenting opportunities for collaboration with resource-rich countries.
• Supporting the development and scaling of new technologies in mining, refining and recycling (as discussed further below).

Supply-Side Technology Innovation
The IEA 2025 Report highlights the potential for supply-side innovations in mining, refining and recycling to advance diversification of supply chains by increasing supply volumes, improving energy and operational efficiency, and decreasing environmental impacts. For mining, technologies include direct lithium extraction (DLE), the processing of ionic adsorption clays, and the reprocessing of mining waste materials. For refining and recycling, technologies include synthetic graphite production, sulfide ore leaching, advanced sorting technologies, and novel recovery technologies. Also, AI-based technologies could lead to advancements in mining and refining. Some of these are described further below.

• DLE technology allows for the extraction of lithium directly from existing brines and geothermal and oilfield brines. The technology increases the recovery rate from brines and reduces energy costs and extraction processing times. Currently, according to the IEA, projects that combine DLE-based production account for 10% of global supply with brines in Argentina and China currently leading DLE-based production. Scaling up DLE- has the potential to increase lithium production in North America and Europe.
• Mining waste, which comprises materials including waste rock, tailing and mine water that are generated during extraction and processing, can be an important source of secondary mineral recovery, particularly for small-volume byproduct minerals such as gallium (a byproduct of aluminum and zinc), germanium (zinc) or indium (zinc ore processing). To aid in identifying the resource potential of mine wastes in the United States, the U.S. Geological Survey is developing a National Inventory of Legacy Mine Sites. Mineral recovery from waste has been challenging for several reasons, including the economic viability of recovering small-volume minerals for which prices and markets can be opaque and the lack of technical recovery know-how. In light of the imperative to advance diversification—including for strategic minerals that tend to be byproducts—increasing demand as well as market-based mechanisms can support the economic viability and sustainability of such investments. Potential partnerships with national labs can also assist with bridging gaps in technical know-how. In addition, the reprocessing of waste can also reduce costs and mitigate environmental risks associated with mine and tailing closure. These considerations, along with policy measures, can impact the commercial attractiveness of reprocessing mining waste to provide a source for secondary mineral production.
• Novel synthetic graphite solutions, which reduce energy consumption and processing timelines, are being deployed by various companies in Norway, France and the United States. Currently, the production process of synthetic graphite is extremely energy-intensive, and production is dominated in China.
• Recycling technologies can produce important sources of minerals feedstock through secondary production. These include:

-  Advanced sorting technologies, which allow for recovery of minerals from byproducts and waste. Advances in automated sensor-based technologies enable precise separation of critical minerals from electronic waste. X-ray fluorescence sorting uses x-rays with a material for identification of its elemental compositions, and laser-induced breakdown spectroscopy provides real-time element composition analysis.

-  Novel recovery techniques, which allow for extracting metals from waste. These include plasma arc recycling, which leverages intense heat to recover metals from mineral resources and waste streams.

• Artificial Intelligence may play a significant role in enhanced resource discovery and mapping of reserves, as well as in improved efficiencies in mining operations and processing through automation and data application.

Scaling these technologies is essential to realizing their potential. This includes government funding for R&D, pilot and demonstration projects, such as through the Bipartisan Infrastructure Law, funding over the Defense Production Act (discussed here), and bipartisan legislation (discussed here) in the United States. Also, under the ongoing Section 232 investigation into processed critical minerals, which is required to be completed no later than October 12, 2025, the Department of Commerce may recommend a range of remedies including policies to encourage domestic production, processing and recycling.

In addition, international collaboration through technology-sharing agreements (with appropriate safeguards for protection of intellectual property) and co-investments in refining infrastructure and technologies are being pursued. The IEA’s Technology Collaboration Programme can provide a venue to convene wide-ranging stakeholders regarding these goals. The G7 Action Plan provides that G7 countries will advance “collaboration to fill targeted innovation gaps in critical minerals research and development, with a focus on processing, licensing, recycling, substitution and redesign, and circular economy.” The United States is chairing the September 2025 Conference on Critical Materials and Minerals, which will advance the G7 Action Plan.

Pillsbury’s Minerals, Metals and Materials Supply Chains team advises clients on, among other things, participation in trade-related proceedings (such as Section 232), agreements and related initiatives to advance diversification of critical mineral supply chains; structuring offtake and financing under evolving regulatory frameworks; licensing of mining or processing technologies; group purchasing consistent with antitrust laws; investing in U.S. and international mines and mining-related companies; leveraging incentives in the United States, EU and allied nations for mineral project development; and selecting and securing sites for operations in the United States for companies entering the U.S. market.