In Short : Designing an effective strategic stockpiling system for critical minerals involves securing reliable supplies, managing geopolitical risks, and ensuring long-term industrial resilience. A well-structured framework balances national security, economic stability, and sustainability by integrating policy coordination, diversified sourcing, transparent governance, and dynamic inventory management to protect against supply disruptions and market volatility.
In Detail : 2025 was the year when the risks of highly concentrated critical minerals supply chains materialised at scale
The IEA has long warned of the potential security risks associated with the high concentration of critical mineral supply chains. In 2025, these risks became a reality, marking a major turning point for global economic security. The rare earths export controls announced by China in October 2025 posed major national and economic security risks across the world, with potentially severe impacts for a range of strategic sectors including energy, automotive, defence, aerospace, AI and semiconductors. Earlier export controls introduced in April had already resulted in some automotive factories around the world being forced to cut utilisation rates or even temporarily shut down.
Beyond rare earths, export controls have also been imposed on a range of strategic minerals including gallium, germanium, graphite and tungsten, which play a crucial role in strategic applications such as semiconductors, batteries, aerospace and defence. The Global Critical Minerals Outlook 2025 highlighted that China is the leading refiner for 19 out of the 20 strategic minerals closely tracked by the IEA, with an average market share of around 70%. Moreover, over half of these minerals are already subject to some form of export controls. These developments underscore that concentration risks in mineral supply chains are no longer a theoretical concern but pose tangible and growing threats to countries’ economic and national security. Moreover, IEA analysis underlines that the market share of the largest suppliers of key critical minerals, particularly for refining, has been increasing in recent years.
Stepping up global action on critical minerals security has never been more urgent. A clear priority is to develop diversified sources of supply for key critical minerals. However, inevitably, it takes time to develop new projects in both mining and refining. Strategic stockpiling of critical minerals can serve as an important protective measure to safeguard countries from supply shocks and disruptions while they develop new, diversified sources of supply. Strategic stockpiles provide a way for countries to strengthen economic and national security, while also helping to deter future export controls and limiting their impact.
Strategic stocks are an insurance policy against short-term disruptions
Strategic stocks – held specifically for emergency purposes with the involvement of the government – have demonstrated effectiveness across various sectors. A notable example is the oil market, where stockpiles have played an important role in mitigating severe economic impacts for decades. After the oil shock of 1973, IEA member governments established a mechanism to build up and pool emergency oil stocks to protect them from being held to ransom via oil supplies in the future. Since then, the IEA has coordinated five collective responses to major oil supply disruptions, helping to limit the economic impacts of shocks caused by natural disasters or geopolitical strife, most recently in 2022 following Russia’s invasion of Ukraine.
Critical mineral markets operate in a very different context from oil markets. The diversity of critical minerals, each with distinct market contexts, means that stockpiling is not a catch-all solution and its suitability can vary by mineral. It is also not a substitute for efforts to develop diversified supply sources that deliver fundamental security benefits. However, stockpiles can still play an important role in providing emergency supply and protecting industries and jobs. Strategic mineral stockpiles also bring several additional benefits. Even when they are not used, they send a signal to markets that sudden supply shocks or export restrictions need not immediately cripple the system. Some IEA Member countries such as Japan, Korea, and the United States hold strategic stockpiles of critical minerals that have protected industries from supply disruptions.
The build-up of critical minerals stockpiles and the need for stock rotation can also support diversification efforts by sourcing materials from projects outside the dominant suppliers, while also enhancing market transparency by providing governments with insights into pricing.
Strategic stockpiles should primarily serve to ensure business continuity and provide a buffer during supply disruptions, rather than to manage price volatility or influence market dynamics. Clear and transparent principles for stockpile releases, focused on addressing acute and short-term supply interruptions, can help prevent market distortion and maintain healthy investment signals that drive market development.
Designing effective stockpiling systems involves addressing a range of strategic questions including material form, governance model, costs, and financing
Amid mounting risks to mineral supply chains, many countries are showing growing interest in establishing stockpiling systems for critical minerals. In doing so, they need to address a range of strategic questions, including the choice of materials to stockpile, governance models, associated costs and financing mechanisms. Critical minerals vary widely in their physical forms, end-use sectors, market sizes, levels of pricing transparency, warehousing needs, and supply chain complexity. Each material therefore needs to be analysed individually, with stockpiling governance models tailored to its specific characteristics.
As part of the Critical Minerals Security Programme, the IEA has examined these issues in detail and developed a comprehensive database and model covering over 30 forms of strategic minerals that are used in the energy sector and have critical applications in AI, advanced technology, aerospace, and defence. This work involved developing an assessment framework to evaluate the supply and strategic risks for each material across multiple dimensions, exploring potential governance models, understanding warehousing requirements posed by the diverse forms that minerals take along their value chains, building cost models to estimate the expenses associated with stockpiling and examining possible financing mechanisms.
The IEA Critical Minerals Stockpiling Assessment Framework evaluates risks and warehousing needs
To determine which materials should be prioritised for stockpiling, the IEA Critical Minerals Stockpiling Assessment Framework was developed to analyse risks and challenges for each material across multiple dimensions: supply risk, the availability of alternative supply routes, strategic importance and the feasibility of stockpiling.
When evaluating supply risks, the level of supply concentration in both mining and refining is a key factor, as relying on few dominant suppliers means that any disruption can immediately flip markets into shortfall. For gallium, graphite, manganese and rare earths, the top refiner, China, accounts for over 90% of global supply. High price volatility further complicates the development of new supply: for example, lithium, vanadium, rare earths and cobalt have exhibited much higher volatility than oil and gas. Many high-risk minerals are already affected by some form of export restrictions, such as rare earths, gallium, and tungsten, straining their supply chain. These restrictions highlight the supply risks but also indicate the procurement challenges of building strategic stocks for these materials.
The availability of alternative supply routes is another important consideration. For some materials, there are limited options for substitute materials, such as chromium for stainless steel, titanium for alloys requiring a high strength-to-weight ratio, and germanium for high-performance fibre optics, heightening the risks from supply disruptions. Additionally, many materials are produced as co- or by-products alongside other minerals, making their supply less responsive to demand or price signals. For example, gallium is mainly recovered as a by-product of zinc and aluminium production, tellurium from copper and lead, and germanium from zinc and coal.
The strategic importance of each material depends on the sectors in which it is used. When materials have applications in strategic sectors such as semiconductors or defence, their security of supply becomes a crucial factor for economic and national security. While strategic importance can be assessed at the global level, each country should also consider domestic vulnerabilities and dependencies to assess potential impacts on its overall security and resilience.
The feasibility of stockpiling varies by material as each mineral takes different forms along its supply chain. The form most suitable for stockpiling is generally the imported form – most exposed to disruption risks – that can be directly used domestically in case of a disruption, without the need for further processing abroad. A broad assessment of the properties of strategic materials that are imported by IEA Member countries highlights a number of warehousing challenges for certain critical minerals such as hygroscopicity (sensitivity to humidity), reactivity, hazardousness and fragility. For example, lithium hydroxide is highly sensitive to humidity and degrades quickly in air, reducing its shelf life to around six months, while lithium carbonate can be stored for much longer. Gallium has a melting point of around 30°C. These warehousing challenges can be overcome, for example through controlling temperature and humidity of warehouses, using advanced packaging to minimise contact with air and moisture, and rotating stocks of materials with short shelf life. However, these additional requirements increase the cost and complexity of stockpiling.
Stockpiling governance models balance roles between government and industry
There is a spectrum of stockpiling governance models, with suitability varying by country and material. Governance models can be grouped into two broad categories based on where the minerals are physically stored: ‘government-held’ or ‘industry-held’, each with two main options. For government-held (centralised) stockpiling models, the government owns and manages the stockpile, either directly or through a public agency acting on its behalf. Industry-held (decentralised) models require companies to store strategic stocks in addition to their existing commercial inventories. For industry-held stockpiles, stocks may be industry-owned, where the government sets a mandate for a volume to be reserved for emergency use, or government-owned, where industry manages the stocks which are owned and purchased by the government. Companies that participate in these models may receive public support. Governments could also consider leveraging the expertise and assets of commodity traders to manage stockpiles more efficiently.
Most existing strategic critical mineral stockpiling systems are government-held and managed through public agencies. Japan’s mineral stockpiles are managed by its public agency; Japan Organization for Metals and Energy Security (JOGMEC), Korea’s stockpiles are handled through the Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR) and the Public Procurement Service (PPS), and the United States’ National Defence Stockpile is managed by the Defence Logistics Agency (DLA). China also has major stockpiles of critical minerals, but unlike the others, utilises a combination of governance models with material stored and managed by both government and industry.
Operating costs underpin total stockpiling costs, with financing, warehousing, and discounting as the largest components
The costs of stockpiling are comprised of two primary components: the material purchase cost and the operating cost. The material purchase cost is the significantly larger upfront expense; however, this is a capital cost that is converted into an asset (the stockpile), and the capital is recuperated when stocks are released or during stock rotation (when selling the stock back to the market before reaching the end of their shelf life). The net costs of stockpiling are therefore determined by the operating costs. Stockpiling costs are sometimes misconstrued with an overemphasis on the material purchase cost, whereas operating costs form the actual costs borne over time. The operating cost components include financing, warehousing, discount, logistics, material loss and administrative costs. Financing costs refer to the cost of using debt or equity to purchase the material, warehousing refers to the cost of storing the material, and discount costs reflect the loss in market value when selling the stockpiled material to the market after a period of storage.
Our analysis indicates that financing, warehousing, and discount account for the largest share of total stockpiling operating costs, but there are major differences in the share of each component by material. Financing costs are the largest cost component for high-value, lower volume materials such as gallium and germanium, while warehousing costs become more significant for larger volume, lower-value materials such as synthetic graphite and nickel sulphate. Stricter warehousing requirements can triple warehousing costs per tonne compared with standard metals; however, financing costs remain dominant for many materials, even those with the strictest storage requirements such as lithium hydroxide and rare earth permanent magnets. Materials with shorter shelf lives incur more significant discount costs under government-held models due to more frequent stock rotation. Industry-held governance models reduce these discounts as companies use the stocks directly rather than needing to sell them back to the market.
Stockpiling critical minerals entails relatively modest costs compared with the potential economic impacts of supply disruptions
Analysis of stockpiling costs at the aggregate IEA level indicates that the total net cost of stockpiling most critical minerals is relatively modest, particularly for many high-priority strategic materials such as gallium and germanium, which often involve low volumes. According to our analysis, for all IEA countries to stockpile six months of their exposed imports of gallium metal from the top supplier, the total operating costs of stockpiling would be around USD 800 000. By comparison, costs of stockpiling the same months of exposed imports of rare earth permanent magnets would be almost USD 90 million. For material used in much larger volumes such as lithium hydroxide, the costs only grow to just under USD 300 million.
Government-owned governance models have lower financing costs while industry-led models have lower discount costs and greater efficiencies
The appropriate stockpiling governance model varies considerably by material and depending on domestic context and supply chain structures. Government-owned operating models with access to lower interest rates are most cost efficient for high-value materials, such as gallium or germanium. Lower-volume materials with fewer specifications such as upstream concentrates or midstream rare earth oxides may be more suitable for centralised government-led models, if there are domestic facilities able to process them. However, materials with a wide variety of company-specific specifications, such as graphite anode material or rare earth permanent magnets, or with short shelf lives, such as lithium hydroxide, are often better suited to industry-held governance models, where companies can store the specific materials, they need and undergo stock rotation more efficiently. Government-owned, industry-held governance models combine some of the advantages of both models: reduced financing costs, greater logistical efficiencies and reduced discount costs.
Beyond material characteristics and cost considerations, stockpiling can also support the development of diversified projects. Government-led stockpiling operating models are better suited to procuring material from specific strategic projects, providing offtakes that enhance project viability. In industry-led models, it is harder to control where material is purchased from, but the government could still have a role in aggregating demand. Ultimately, the most suitable stockpiling governance model depends strongly on national circumstances. A hybrid solution using a mixture of governance models for different materials may be optimal for many countries.
There are multiple ways to finance strategic stockpiling, which depend on the governance model and domestic circumstances
In the case of direct management of government-held stocks, purchase and operational costs are typically financed directly from the general budget or through a special purpose fund. In case the government chooses to use a public agency to manage the stocks, it can provide loan guarantee for the initial stock purchase and cover the agency’s operational costs. In an industry-held model, most of the costs are borne by companies, but governments could contribute through several instruments, such as direct loans or loan guarantees, public subsidies, tax breaks or direct equity investments. In the government-owned, industry-held hybrid model, the government would typically cover purchasing and financing costs, while operating costs could be shared through an agreement between government and industry.
The IEA Critical Minerals Security Programme is a key platform for international cooperation on critical minerals stockpiling
The urgency of today’s challenges facing critical mineral supply chains calls for strong international collaboration to achieve greater economic and national security, and stockpiling is a key tool that countries are considering implementing or expanding. While the objective of stockpiles is to strengthen security of domestic supply, coordination with international partners can be beneficial to achieve greater security more efficiently and faster. Coordination on the timing for stockpile purchases and principles for releases could help ensure markets are not distorted. When procuring stocks, countries could also agree to support strategic projects that would increase global diversification or consider aggregating demand. When compatible with domestic policies, countries could also consider to co-locate stocks for greater efficiencies, especially for low-volume materials, or reserve production in countries with production infrastructure to be dedicated to emergency use. Close dialogue among partners also helps transferring knowledge on efficient stockpile management.
The IEA Critical Minerals Security Programme is a key international platform helping countries to explore strategic questions around developing domestic stockpiling systems and opportunities to strengthen international coordination. The Programme will continue to support IEA Members in their efforts on reviewing strategic stockpiling as a tool to enhance preparedness to supply shocks.
Seven recommendations for developing domestic strategic stockpiles of critical minerals
When developing or expanding domestic strategic stockpiles of critical minerals, governments should consider:
- Assessing value chains to identify bottlenecks and determine the material portfolio, prioritising those materials with the highest supply risks for a specific country or region.
- Stockpiling the form of the material imported to a country or region to enable rapid deployment during disruptions.
- Preparing for potential future disruptions by considering materials exposed to major risks that are not yet subject to export restrictions.
- Tailoring the stockpiling governance model to the materials of choice, for an overall stockpiling system that optimises cost and benefits.
- Setting clear transparent principles for stockpile releases to respond to acute short-term supply disruptions, while maintaining robust investment signals for market development.
- Closely involving industry across upstream and downstream sectors to design feasible and effective stockpiling systems and ensure their operational viability.
- When compatible with domestic policies, leveraging international collaboration to optimise multiple domestic systems for greater efficiencies.
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