A Santiago-based consultancy has drawn a distinction that most critical-mineral forecasts miss. Scarcity and fragility are not the same problem. They do not always affect the same minerals. And they require different solutions.
GEM Mining Consulting made that argument in a report benchmarked against the IEA Global Critical Minerals Outlook 2026. The findings challenge a widespread habit of comparing announced mine capacity against projected demand and calling the difference a supply gap.
That comparison, GEM argues, overstates how much material manufacturers can actually receive.
The First Problem Is Physical Volume
Projected supply will cover only 68% of lithium demand by 2035. Cobalt reaches 74% and copper 75%. These shortfalls are real. They reflect the scale of new mine capacity required to meet energy-transition demand across batteries, magnets and electrical infrastructure.
GEM measures this pressure through a Volume Scarcity Index. Lithium scores 80 out of 100. Cobalt scores 65 and copper 62.
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However, a high scarcity score does not fully describe the risk that manufacturers face.
For these three minerals, the priority is straightforward: more reliable mine production must come into operation. That requires financing, permitting, construction and ramp-up. Each stage introduces delays that the scarcity index does not capture.
The Second Problem Is Supply Chain Fragility
Graphite and rare earth magnets tell a different story. Projected supply for magnet rare earths covers 107% of 2035 demand. Battery-grade graphite reaches 96%. On a volume basis, both look adequate.
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Yet GEM assigns rare earth magnets a Supply Chain Fragility Index score of 95 out of 100. Battery-grade graphite scores 89.
These are the highest fragility scores in the analysis. They reflect the concentration of processing and refining capacity in China. GEM estimates that diversified magnet supply outside China would cover only 15% of global demand.
Consequently, adequate overall volumes do not protect manufacturers if the processing route is not available or accessible outside a single country.
Announced Capacity Overstates Real Supply
GEM also addresses a calculation that industry participants routinely make. A hypothetical project designed to produce 100,000 tonnes annually may ultimately deliver about 60,200 tonnes of reliable, saleable output. That gap represents a reduction of nearly 40%.
The losses accumulate across a project’s life. Permitting and financing can delay construction. Commissioning can push back initial output. Mines require time to reach nameplate capacity. Metallurgical processes reduce the amount of usable material. The product must then meet the purity and technical specifications that battery, magnet and other manufacturers require.
Each stage is a filter. Together, they mean that announced capacity is not a reliable proxy for supply.
This matters for policy and investment. Headline resource estimates and planned mine capacities can create a misleading impression of mineral security. Governments that use those figures to assess import dependence or domestic-supply targets may be working from overstated numbers.
Cobalt Combines Both Risks
Among the minerals reviewed, cobalt presents the clearest combination of volume pressure and chain fragility. GEM assigns it a scarcity score of 65 and a fragility score of 78.
The cobalt supply chain is concentrated at the production stage in the Democratic Republic of the Congo and at the processing stage in China. The IEA’s 2026 Outlook separately noted that a new DRC export quota has created an additional supply gap.
Cobalt therefore requires attention on both dimensions simultaneously. More mine supply must reach the market, and that supply must be processable through routes that manufacturers outside China can access.
Nickel and Copper Present Separate Challenges
Nickel reaches 92% supply coverage by 2035, which appears manageable. However, its fragility score of 66 reflects the concentration of processing capacity in Indonesia and China. Diversified refining remains limited.
Copper scores 62 on volume scarcity and 36 on chain fragility. Its physical deficit is among the most discussed in the industry, reinforced by the IEA’s assessment that the near-term copper supply outlook has worsened considerably. By contrast, its processing chain is more geographically distributed than those of graphite or rare earths.
For copper, the strategic priority is therefore different from rare earths. New mine production matters more than processing diversification. For rare earths, the reverse is true.
What GEM’s Framework Means in Practice
The dual-index approach changes how projects should be evaluated.
A smaller deposit with proven processing, existing infrastructure and confirmed buyers may carry greater strategic value than a larger resource without a reliable route to market. Scale alone is not the measure of strategic importance.
GEM’s broader conclusion follows directly from this point. A reserve becomes strategically relevant only when it can be financed, permitted, extracted, processed, qualified and delivered through a resilient supply chain. Any step that cannot be completed reliably removes a tonne from effective supply, regardless of what the resource estimate says.
What the Industry Should Watch
The next phase of critical-mineral supply development will depend on measurable progress across both dimensions.
Volume deficit minerals: New lithium, cobalt and copper projects must move from announcement to production. Permitting timelines, financing conditions and ramp-up performance will determine how much of the announced capacity becomes real supply.
Processing diversification: For rare earths and graphite, the strategic gap is not in the ground. It is in the refinery. Countries seeking supply-chain resilience must invest in processing infrastructure outside the current concentration points.
Capacity assumptions: Investors and policymakers should apply realistic deductions to announced project tonnages. The gap between nameplate capacity and saleable output is not a theoretical risk. It is a consistent feature of how mining projects perform.
Customer qualification: Material that leaves a processing plant must still meet buyer specifications. That step can delay commercial supply even when everything upstream has gone to plan.
Index distinctions: Volume scarcity calls for investment in production. Chain fragility calls for investment in processing and geographic diversification. The policy responses are not interchangeable.
A Supply Picture That Is More Complex Than It Appears
The IEA’s 2026 Outlook confirmed that critical mineral prices rebounded in 2025 and early 2026, with supply concentration in refining continuing to increase. China and Indonesia accounted for over three-quarters of refined supply growth across key energy minerals.
GEM’s analysis adds a further layer to that picture. The minerals with the largest projected deficits are not necessarily the most strategically vulnerable. The minerals with apparently sufficient supply can still leave manufacturers exposed if processing is concentrated in one country or one supply chain.
That distinction matters for every company sourcing critical minerals, every government trying to reduce import dependence and every investor assessing which projects carry real long-term value.
The question is not only how much material miners can extract. It is whether that material can be reliably processed, qualified and delivered to the manufacturers who need it.
