Critical Minerals Supply Chains: Geopolitical Risk Assessment

The geopolitical dimension of critical minerals supply chains has moved to the centre of energy transition investment analysis, and the risk assessment frameworks that investors and developers apply to these supply chains are evolving rapidly in response to a more contested global environment. Arkadia's research maps the concentration risks, geopolitical fault lines, and supply chain vulnerabilities embedded in the critical minerals flows that underpin the clean energy economy.

The starting point for any supply chain risk assessment is the extraordinary geographic concentration of critical mineral production. Cobalt production is approximately 70% concentrated in the Democratic Republic of Congo. Lithium production is dominated by Australia and the South American Lithium Triangle. Rare earth processing is approximately 85% concentrated in China. Nickel production is increasingly dominated by Indonesia. This concentration creates structural vulnerability: a single geopolitical event, regulatory change, or natural disaster in a key producing jurisdiction can have cascading effects on global supply chains and energy transition project economics.

The policy response to these vulnerabilities is reshaping investment flows. The United States Inflation Reduction Act, the European Union Critical Raw Materials Act, and equivalent policy frameworks in Japan, South Korea, and Australia are all designed to incentivise the development of more geographically diversified supply chains. These policies are creating new investment opportunities in jurisdictions that were previously overlooked — including Canada, Greenland, Namibia, and the Philippines — and are generating significant advisory activity around the structuring of offtake agreements, joint ventures, and government partnerships that qualify for policy support.

For energy transition project developers, the supply chain risk assessment must now extend beyond the project boundary to encompass the full upstream supply chain for key components. A solar project developer in Southeast Asia, for example, must consider not only the cost and availability of solar panels but also the geopolitical risks embedded in the polysilicon, wafer, and cell manufacturing supply chains that feed panel production. Arkadia's research practice provides clients with the analytical tools to assess these risks systematically and to develop procurement and contracting strategies that provide appropriate supply chain resilience.