Editorial Article

The Race for Battery Raw Materials: Geopolitics, Risk & Supply Security

Updated September 10, 2026

The 20th-century energy economy ran on a commodity that could be bought on an open, liquid market: oil. The 21st-century battery economy runs on minerals whose supply is geographically concentrated, expensive to bring online, and increasingly controlled by governments with their own strategic agendas. The global EV battery market is forecast to grow from USD 91.70 billion in 2025 to USD 369.5 billion by 2033 at a 19.03% CAGR — and every one of those cells is built from raw materials that now sit at the center of a geopolitical contest.

This article maps the risk. It draws on Pheonix’s risk and intelligence coverage of the two anchor markets — global cobalt mining and global lithium mining — where geopolitical exposure is rated high across the board, and shows how export controls and processing concentration are reshaping supply security to 2033.

Why battery minerals became strategic assets

Battery raw materials have three properties that turn a supply chain into a national-security issue:

Demand is exploding. A single demand engine — EV batteries plus stationary storage — is forecast to lift the EV battery market from USD 91.70 billion to USD 369.5 billion in eight years, and it pulls lithium, cobalt, nickel, manganese and graphite upward with it.
Supply is concentrated. Cobalt comes overwhelmingly from one country (the DRC), nickel refining from another (Indonesia), and lithium refining from a third (China). Concentration of this degree makes supply vulnerable to a single government’s policy shift.
Substitution is slow. Lithium in particular carries low substitution risk in Pheonix’s assessment — there is no drop-in replacement for it in today’s battery chemistries — so a supply shock cannot be engineered away quickly.

Add high capital intensity, multi-year project lead times, and high regulatory complexity, and the result is a market where access to material matters as much as price of material.

The two anchor risk markets: cobalt and lithium

Pheonix rates both cobalt and lithium mining as high overall risk with high geopolitical exposure, high regulatory complexity, and high supply-chain complexity. The similarities end there.

Risk dimension	Cobalt mining	Lithium mining
Geopolitical exposure	High	High
Overall market risk	High	High
Regulatory complexity	High	High
Substitution risk	Moderate	Low
Market structure	Oligopolistic (2 tier-one players)	Fragmented (15 tier-one players)
Supply-chain complexity	High	High
Technology maturity	Emerging	Mature
Defining supply constraint	DRC export quotas & production constraints; Glencore’s copper-first strategy	Zimbabwe export ban; project delays in Chile & California; water constraints in the US Southwest

Cobalt: one country, one market

The global cobalt mining market is forecast to grow from USD 18.36 billion in 2025 to USD 67.37 billion by 2033 at a 17.65% CAGR, on a front-loaded trajectory driven by gigafactory commissioning and NMC cathode demand. Its risk profile is defined by the Democratic Republic of Congo, which supplies more than 70% of global mined cobalt output — a concentration that turns every DRC policy decision into a global price event. The report explicitly flags DRC export quotas and production constraints among the market’s principal restraints, alongside Glencore’s copper-first strategy (which reallocates capital away from cobalt) and EU battery recycling mandates.

The market’s structure amplifies the risk: it is oligopolistic, with roughly two tier-one players — Glencore and Mutanda — and low patent activity for a market rated high on innovation intensity. The mitigating factor is geography shifting: Indonesia is the fastest-growing supply region, with cobalt production projected to rise from approximately 49,300 tonnes in 2025 to 59,800 tonnes in 2026, supported by high-pressure acid leach (HPAL) nickel-cobalt projects.

Lithium: refining is the chokepoint

The global lithium mining market is the fastest-growing of the critical minerals, projected to expand from USD 1.40 billion in 2025 to USD 5.62 billion by 2033 at an 18.97% CAGR — recovering from a punishing price correction in which lithium prices fell more than 85% from their 2022 peak of roughly USD 80,000 per tonne to approximately USD 10,000 per tonne.

Its geopolitical risk is different in kind from cobalt’s. Mining itself is comparatively diversified — Australia is the largest hard-rock producer, Chile and Argentina lead brine output — but China dominates global lithium refining and processing. That makes the conversion layer, not the mine layer, the strategic chokepoint: ore from Australia or Chile becomes battery-grade lithium chemicals only after passing through Chinese-controlled refining capacity. Policy interventions reinforce the risk: Zimbabwe’s lithium concentrate export ban, project delays in Chile and California, and water availability constraints across the US Southwest are all cited as tightening the future supply pipeline, pushing the market from oversupply through early 2026 toward a structural deficit from 2027 onward.

Mining concentration vs. processing concentration

The deepest lesson of the battery supply chain is that owning the mine is not the same as owning the chain. Refined chemicals, not ore, go into a battery cell — and the processing stages are even more concentrated than the mining stages.

Cobalt mining: DRC > 70% of global mined output.
Nickel refining: Indonesia accounts for approximately 60% of global refined nickel output, and its production quota policy is a swing factor for world prices.
Lithium refining: China dominates global lithium refining and processing, even though most hard-rock lithium is mined in Australia and most brine lithium in Chile and Argentina.
Graphite processing: tightening export restrictions in the dominant processing region are pushing governments to fund non-Chinese projects, with North American development accelerating.

This is why supply-security policy focuses on processing and refining capacity as much as on mines — and why battery supply-chain localization has become a stated industrial objective rather than a cost decision.

Export controls and the policy counter-moves

Governments are now using the battery supply chain as an instrument of statecraft in both directions.

Restrictive levers tightening supply:

DRC export quotas and production constraints on cobalt, which seek to capture more processing value domestically but inject uncertainty into global concentrate supply.
Zimbabwe’s lithium concentrate export ban, which restricts raw lithium leaving the country before processing.
Export restrictions on processed graphite, which have accelerated funding for non-Chinese projects, especially in North America.
Counter-levers securing supply:
Strategic stockpiling — including the US Department of Defense’s Project Vault program, a direct government buyer of lithium — which is explicitly listed as a market driver.
EU battery recycling mandates, which turn end-of-life cells into a future domestic source of critical minerals.
Gigafactory localization — Hyundai/SK On, PowerCo and Envision AESC capacity additions anchor demand in specific regions.
New supply regions — Brazilian nickel-cobalt development and Indonesian HPAL projects reduce reliance on any single jurisdiction.
Direct lithium extraction (DLE), which could unlock brine resources in Chile, Argentina and the US faster than conventional evaporation ponds.

The strategic-competition dynamic is now so embedded that the cobalt report lists “strategic competition for critical mineral assets” among the key trends shaping the market through 2033.

What the risk means for buyers and investors

For automakers and battery manufacturers, the practical consequence is that raw-material strategy has become part of product strategy. Chemistry choices are risk choices: LFP chemistries sharply reduce cobalt dependence, NMC and NCA chemistries keep nickel and cobalt central, and every chemistry still needs lithium — the mineral with the lowest substitution risk of all. For investors, the two anchor markets offer contrasting structures: an oligopolistic cobalt market where a handful of tier-one players and one country set the tone, versus a fragmented 15-player lithium market where the price cycle and policy interventions do the work.

Outlook to 2033

The growth math is unambiguous: EV batteries to USD 369.5 billion, cobalt mining to USD 67.37 billion, lithium mining to USD 5.62 billion, all at double-digit CAGRs. The risk math is equally unambiguous: high geopolitical exposure, high regulatory complexity, and supply-chain concentration persist through the entire forecast window. Expect continued export-control maneuvering, continued stockpiling, a structural lithium deficit from 2027, and a cobalt trajectory shaped as much by DRC policy and Indonesian HPAL capacity as by battery demand. In the race for battery raw materials, supply security is no longer a logistics function — it is the strategy.

Frequently asked questions

Why are battery raw materials a geopolitical risk?

Because supply is geographically concentrated in politically sensitive places and cannot be quickly substituted. The DRC supplies more than 70% of mined cobalt, China dominates lithium refining and processing, and Indonesia accounts for roughly 60% of refined nickel — so a single government’s export policy can move global prices.

Which countries control the lithium supply chain?

Mining is relatively diversified: Australia is the largest hard-rock producer, and Chile and Argentina lead brine output. The strategic chokepoint is processing — China dominates global lithium refining and processing — which is why supply-security programs target refining capacity, not just mines.

What are export controls doing to the market?

Restrictive measures — DRC cobalt export quotas, Zimbabwe’s lithium concentrate export ban, and export restrictions on processed graphite — tighten concentrate supply and push governments to fund non-Chinese processing projects. Counter-levers include strategic stockpiling (Project Vault), EU recycling mandates, and gigafactory localization.

How is the industry reducing supply risk?

Through direct lithium extraction (DLE), Indonesian HPAL nickel-cobalt projects, Brazilian nickel-cobalt development, diversification beyond the DRC, battery chemistry shifts that reduce cobalt intensity, and recycling mandates that treat end-of-life batteries as a domestic mineral source.

What is the market outlook to 2033?

Pheonix forecasts the global EV battery market to grow from USD 91.70 billion in 2025 to USD 369.5 billion by 2033 (19.03% CAGR); cobalt mining from USD 18.36 billion to USD 67.37 billion (17.65% CAGR); and lithium mining from USD 1.40 billion to USD 5.62 billion (18.97% CAGR), with lithium shifting from oversupply to a structural deficit from 2027.

Frequently Asked Questions

Why are battery raw materials a geopolitical risk?

Which countries control the lithium supply chain?

What are export controls doing to the market?

Restrictive measures — DRC cobalt export quotas, Zimbabwe's lithium concentrate export ban, and export restrictions on processed graphite — tighten concentrate supply and push governments to fund non-Chinese processing projects. Counter-levers include strategic stockpiling (Project Vault), EU recycling mandates, and gigafactory localization.

How is the industry reducing supply risk?