International banks are optimistic that growing G7 government involvement in the critical minerals market and a rebound in commodity prices are starting to attract more investment in long-term supply security.
Western efforts to reduce reliance on Chinese supply have long run into economic difficulties, in part because subdued metals prices caused by short-time oversupply have acted as a drag on investment in new mining and processing facilities.
However, industry insiders are hopeful this may be about to change. On the mining side, ING’s Remko van de Water, head of trade and commodity finance for the Americas, said soaring metals prices over the past year have helped create economic incentives for fresh investment.
Copper prices reached record highs, lithium prices more than doubled and prices for base metals such as aluminium and tin rose by around a third between the start of 2025 and April this year, a July report by the International Energy Agency (IEA) said.
“Metals prices have reached all-time highs, and finally – after years of underinvestment – there has been a strong push to expand greenfield mine production,” van de Water said.
“From a mining company perspective, you need to reach a certain commodity price to start investing in new growth, and over the previous decade that has been lagging, with the exception of gold. Now that companies are comfortable that these incentive price levels have been met, we see a tremendous amount of investment coming to the market soon.”
Van der Water noted the impact will not be felt immediately. Developing a mine can take several years, factoring in technical studies, permits and construction.
Similarly, despite growing interest in downstream processing, such as refining and smelting, those projects are also “tough and time-consuming to ramp up quickly”.
“But compared to two or three years ago, it’s a night-and-day difference,” he said.
Yann Ropers, global head of natural resource finance at Deutsche Bank, suggested that the US government’s growing intervention in the sector has also helped.
He highlighted Project Vault, a public-private initiative that provides offtake agreements for western critical minerals projects. The project was initially capitalised through a US$10bn loan from the Export-Import Bank of the United States but has also drawn in billions from private capital.
Although often characterised as a stockpiling initiative, Cullen Hendrix, a senior fellow at the Peterson Institute for International Economics, said in a May paper it predominantly targets “persistent bankability issues facing Western critical minerals projects”.
“Without guaranteed demand at predictable prices, these projects struggle to attract private capital because anticipated returns are too low relative to risk, particularly when competing against Chinese producers whose costs are effectively subsidised by the state,” he said.
Deutsche Bank’s Ropers said that although relatively recent, the project is already “potentially accelerating the flow of capital to mining and intermediate processing”.
Meanwhile, in Europe, he said that creating a critical minerals ecosystem remains “a difficult task, but there is progress”.
“While government support has been helpful, you need substantial private equity and debt capital to flow in the sector, and increased risk appetite from banks will notably be required,” he said. “Mining finance can be over 10 or 15 years, and taking a view on price risk over such a long period is complicated.”
G7 governments said in a joint statement in June that stockpiling can play an “essential role… in improving the security of supply and stability of the market”, and committed to increasing domestic capacity.
The statement also said governments would task development finance institutions and export credit agencies with enhancing private-public collaboration on critical minerals infrastructure.
“We’re potentially moving in the direction where governments are helping incentivise the flow of capital,” Ropers said. “The G7 regularly meets to discuss this, and it is moving beyond talks; there is a willingness to take action now.”
The IEA’s July report warned that the situation is becoming more urgent.
It said supply concentration across numerous metals has continued to worsen over the last two years, with the top refining countries – particularly China – accounting for more than 75% of the growth in refined products hitting the market.
At the same time, the agency said the steady expansion of export controls in China, as well as new measures in DR Congo, Mozambique and Zimbabwe, meant 2025 “marked the year when the economic risks of highly concentrated supply chains materialised at scale”.
“The recent proliferation of export controls has transformed concerns around high supply concentration from a theoretical vulnerability into an immediate economic security challenge,” it said.
Investment in the sector dropped last year, the IEA added, with capital investment across the critical minerals sector declining by 9% on average, though copper saw an 8% rise in spending.
