Critical minerals are becoming strategic inputs for energy, technology and industry. But the central competition is no longer only about owning mines: processing, refining, component manufacturing, recycling and control of supply chains increasingly determine where economic value is created.

Key Takeaway

Critical-mineral demand is set to remain strong, but the biggest vulnerability is increasingly found in the middle of the value chain. The International Energy Agency expects demand for critical minerals to nearly double by 2040 under its Stated Policies Scenario, while refining remains highly concentrated. For Georgia, the opportunity is not simply to identify mineral resources, but to determine where the country can competitively participate in processing, metallurgy, logistics and recycling.

Why minerals became an economic-security issue

Lithium, copper, graphite, cobalt, rare earth elements and strategic minor minerals support electricity grids, batteries, semiconductors, data centres and advanced manufacturing. Their economic importance is therefore much larger than the market value of the raw material itself. A disruption in a relatively small mineral market can affect downstream industries worth many times more.

The IEA reports that China accounts for more than 90% of global refining supply for gallium, graphite, manganese and rare earths. Export restrictions introduced since 2025 have turned concentration risk from a theoretical concern into a practical supply-chain issue.

Where the value is moving

The traditional model was to extract ore and export it. The new model is longer: mining is followed by concentration, chemical processing, refining, alloy and material production, component manufacturing and eventually recycling. Countries that control more of these stages can capture more value and reduce exposure to supply disruptions.

Rare earths illustrate the gap. Announced projects outside China could provide close to 50 kt of mining capacity by 2035, while refining and separation capacity remains below 40 kt and planned metals, alloys and finished-magnet capacity is only about 18 kt. Mining diversification is therefore moving faster than downstream diversification.

The U.S. response

The Wall Street Journal reported on September 29 that U.S. government non-equity investment in rare-earth and magnet projects reached $7.6 billion in the 18 months through June 2026, more than four times the amount recorded from 2020 through 2024. The strategy combines domestic projects with international partnerships intended to reduce dependence on a single supplier.

The U.S. Department of Energy announced $500 million for seven critical-mineral processing, battery-manufacturing and recycling projects in August 2026 and another $73 million for mining-technology test projects in September. The objective is increasingly an end-to-end supply chain rather than extraction alone.

Why new mines are not enough

Processing capacity requires specialised technology, skilled labour, energy, water, chemicals and environmental management. According to the IEA, capital costs for refining projects outside the dominant supplier can be 20% to more than 150% higher, while operating costs average around 50% higher. This helps explain why high prices alone do not rapidly create diversified supply.

Investment also weakened in 2025 despite strong long-term demand. Critical-mineral investment fell 9%, with battery-material capital spending down more than 20% and lithium-company investment down around 40%. This combination of strategic demand, volatile prices and high project costs makes the sector unusually dependent on long-term policy and financing frameworks.

Georgia’s position

Georgia is not a major global critical-mineral producer, but mineral and metallurgical goods are already significant in its trade. Preliminary Geostat data show that in January-May 2026 exports of precious-metal ores and concentrates reached $255.6 million, ferro-alloys $130.9 million and copper ores and concentrates $112.3 million.

Calculations by BTU researchers show that these three groups together were worth about $498.8 million, equivalent to roughly 16.1% of Georgia’s total exports over the period. Their year-on-year growth rates were approximately 87%, 77% and 206%, respectively.

These figures require caution. Merchandise-trade statistics do not by themselves identify how much material was mined domestically, how much was re-exported or how much value was added inside Georgia. They are therefore evidence of trade exposure to mineral and metallurgical markets, not a measure of Georgia’s critical-mineral production capacity.

Georgia’s opportunity: from raw material to value chain

The most useful question for Georgia is not simply which minerals exist underground. It is which stage of the value chain the country can perform competitively: extraction, concentration, metallurgy, specialised processing, logistics or recycling.

Existing metallurgical activity, energy resources and geographic position can provide a starting point, but higher-value processing requires technology, skills, reliable power, environmental standards and long-term customers. Recycling may also become increasingly relevant. The IEA expects the average recycling contribution across key energy minerals to rise from around 10% today to close to 20% by 2040 under current policy settings.

BTU Researchers’ Assessment

According to an assessment by BTU researchers, the defining feature of the new critical-minerals economy is a shift in the centre of value. Owning a resource remains important, but strategic advantage increasingly belongs to countries that can process, standardise and transform material into inputs that downstream manufacturers can use reliably.

For Georgia, this argues for a value-chain map rather than a simple inventory of mineral resources. Policymakers and investors need to distinguish geological resources, actual extraction, domestic processing, exports and re-exports, and then identify which additional stages are economically realistic.

Conclusion

The economics of critical minerals is changing. Demand is rising, but competition is no longer only for mines. Refining, processing technology, magnets, battery materials, recycling and supply-chain resilience increasingly determine where value remains.

For Georgia, the opportunity is real but conditional. The country’s 2026 mineral and metallurgical trade shows exposure to these markets, but the next step is to determine where it can move from commodity flows toward higher-value industrial activity without overstating resource potential or underestimating environmental and economic constraints.

Data and Main Sources

International Energy Agency – Global Critical Minerals Outlook 2026, 16 July 2026
URL: https://www.iea.org/reports/global-critical-minerals-outlook-2026
Dataset: Yes

The Wall Street Journal – U.S. Sees Progress In Race to Secure Critical Minerals, 29 September 2026
Dataset: No

U.S. Department of Energy – Critical Minerals and Energy Innovation announcements, August-September 2026
URL: https://www.energy.gov/cmei
Dataset: No

Georgia’s National Statistics Office, Geostat – External Merchandise Trade of Georgia, January-May 2026
URL: https://www.geostat.ge/media/80196/External-Merchandise-Trade-of-Georgia—January-May-2026.pdf
Dataset: Yes

Prepared by the academic team of Business and Technology University and the BTUAI Research Team, Tbilisi, Georgia.