While the energy transition has created an exuberance of investment into the manufacturing of battery and electric vehicles (EVs), investment into critical minerals mining has struggled to keep up. 

In the first three quarters of 2022, foreign investors announced greenfield battery and EV manufacturing projects worth more than $63bn, according to the latest data from fDi Markets. By comparison, only $7.34bn was pledged by foreign investors in greenfield metal and mineral extraction projects.


This massive split in capital expenditure will inevitably add additional pressure to an already tight critical minerals market. Demand from battery producers for metals such as lithium, nickel and cobalt is rising quickly, despite little new mining capacity is coming online. 

Global demand for copper is expected to grow from 25 million metric tonnes (MMT) today to 35 MMT by 2035, according to S&P Global, with supply falling short by nine MMT.

Besides, while mining projects can take as many as 10 to 20 years to start production after a deposit is discovered, battery production operations can take as little as three years to start production.

Caspar Rawles, chief data officer at Benchmark Mineral Intelligence, describes this imbalance in lead time as “the great raw material disconnect”, noting that the deficit in markets for commodities such as lithium will continue until new raw material operations come online. 

“Those companies can make the decision to find a plot of land and get a plant built,” says Mr Rawles. “But when it comes to raw material supply it takes a lot longer.”

Greenfield FDI data does not account for direct equity stakes taken by automakers and battery manufacturers in mining groups, such as Chinese batterymaker CATL’s 25% stake in CMOC Group. However, it paints a clear picture of the challenges facing the market. 


Despite recent higher prices and the emphasis placed on the importance of minerals to meet global climate targets, mining companies are not investing anywhere near as much as they were in the previous commodity super-cycle a decade ago. 

Exploration spending on non-ferrous metals stood at $11.2bn in 2021, roughly half the level seen in 2012, according to S&P Global. More than half of that spending went towards gold, rather than critical metals needed for EV batteries. Only 21% of the exploration spending went towards copper, which is crucial for all electrical technologies from transmission lines to wind turbines and solar panels.

Investment into expanding existing mines is also subdued, according to BMO Capital Markets data cited by the Financial Times.

Meeting the growing market demand will need “significant investment across the whole value chain”, but mining permitting processes need to be sped up in Europe and the Americas, according to Roland Harings, the CEO of Aurubis, Europe’s largest copper producer.

Phoebe O’Hara, an analyst at Fitch Solutions, agrees that governments could do more to support mining projects, many of which have been halted in the US and Europe due to regulatory and environmental, social and governance (ESG) barriers. In Serbia, Rio Tinto’s planned $2bn lithium mining plant was blocked in early 2022 due to local protests and political opposition.

“Government will need to decide whether they can offset some ESG concerns with the belief that increasing EV production is for the greater good of the energy transition,” says Ms O’Hara.

Mr Harings says there needs to be a shift in public perception towards “better in my backyard” thinking and a speeding up of mining permitting processes in Europe and the Americas to more quickly scale up primary production of metals such as lithium and copper.