Demand Growth: The Accelerating Pressure on Critical Mineral Supply
Demand growth is an increasingly important dimension in criticality assessments because it directly determines whether current and planned supply can meet future needs. A mineral with modest current consumption but rapidly accelerating demand trajectories can shift from abundant to critically scarce within a decade. The global energy transition, digital transformation, and defense modernization are simultaneously driving unprecedented demand growth for dozens of minerals, creating a supply challenge unlike anything the mining industry has faced before.
The International Energy Agency (IEA) has projected that achieving global net-zero emissions by 2050 would require mineral inputs to the energy sector to increase roughly sixfold compared to 2020 levels. Lithium demand alone could grow by over 40 times. Rare earth demand for permanent magnets could triple. Cobalt, nickel, and graphite demand for batteries could increase five- to tenfold. These are not speculative scenarios but projections based on the technology deployment rates embedded in existing government policies and corporate commitments.
Key Demand Drivers
Electric Vehicles
The electrification of transportation is the single largest demand driver for critical minerals in the coming decades. A typical battery electric vehicle requires approximately 8-12 kg of lithium (as lithium carbonate equivalent), 5-20 kg of cobalt (depending on chemistry), 30-60 kg of nickel (for nickel-rich cathodes), 50-100 kg of graphite for the anode, 1-2 kg of rare earth elements for the motor magnets, and significant quantities of copper, manganese, and aluminum. By comparison, a conventional internal combustion vehicle uses virtually none of these materials in comparable quantities.
With global EV sales surpassing 14 million units in 2023 and projected to exceed 40 million by 2030, the cumulative mineral demand from the automotive sector alone represents a transformative shift in commodity markets. Battery chemistries are evolving, with lithium iron phosphate (LFP) reducing cobalt and nickel intensity, but this shifts demand toward other minerals without reducing overall mineral consumption per vehicle.
Renewable Energy Generation
Wind turbines and solar panels are mineral-intensive technologies. Offshore wind turbines use up to 600 kg of rare earth permanent magnets per megawatt of capacity, containing neodymium, praseodymium, dysprosium, and terbium. Solar photovoltaic panels require silicon metal, silver, indium, gallium, tellurium, and copper. Grid-scale battery storage demands the same battery minerals as electric vehicles, at even larger scale.
Annual solar PV installations exceeded 400 GW in 2023 and are projected to reach 700-1,000 GW per year by 2030. Wind energy capacity additions are expected to double. Each gigawatt of renewable capacity installed creates mineral demand that persists not only during manufacturing but through periodic maintenance and eventual end-of-life replacement.
Semiconductors and Digital Technology
The semiconductor industry consumes gallium, germanium, indium, silicon metal, tantalum, and other specialty minerals. Demand is being driven by the proliferation of data centers, artificial intelligence computing infrastructure, 5G telecommunications, and the Internet of Things. AI training and inference workloads are particularly mineral-intensive, as they require advanced chips manufactured with gallium arsenide and gallium nitride substrates.
Defense and Aerospace
Military modernization programs worldwide are increasing demand for specialty minerals. Hypersonic weapons require rhenium and tungsten. Advanced avionics depend on gallium arsenide semiconductors. Stealth coatings use specialty materials. Satellite constellations require platinum group metals and rare earths. While defense demand is smaller in volume than energy or electronics, it is characterized by extremely high quality requirements and willingness to pay premium prices, which can distort markets for niche minerals.
How Demand Growth Is Assessed
Criticality frameworks incorporate demand growth through scenario-based modeling. The IEA uses its Stated Policies Scenario (STEPS) and Net Zero Emissions (NZE) scenario to project mineral demand under different climate policy trajectories. The European Commission's foresight analysis projects demand growth at the 10-year and 25-year horizons. The U.S. Department of Energy's Critical Minerals Assessment uses technology deployment models to estimate demand by application and mineral.
Key metrics include the compound annual growth rate (CAGR) of demand, the ratio of projected demand to current production capacity, and the time required to bring new supply online (typically 10-15 years for greenfield mining projects). A mineral facing a demand CAGR of 20% or more with a supply lead time of 10+ years faces acute criticality challenges.
The Supply-Demand Gap
The central concern in demand growth analysis is the potential supply-demand gap: the shortfall that emerges when projected demand exceeds the realistic capacity of the mining and processing industry to expand supply. For lithium, multiple analyses project supply deficits beginning in the late 2020s under moderate EV adoption scenarios. Cobalt faces similar constraints, compounded by concentration risk in the DRC. Rare earths face the tightest potential gaps because new mining and processing projects face exceptionally long development timelines and complex metallurgical challenges.
Closing these gaps requires a combination of strategies: accelerating mine development, investing in processing capacity outside of dominant suppliers, advancing recycling technology, developing substitute materials, and improving material efficiency in product design. Demand growth analysis provides the urgency metric that drives these investments and the policy interventions that support them.