Lithium, copper and the future of the global economy

“During the 20th century, oil was the energy heart of the international system. In the 21st century, the electrification of the economy is shifting that centrality toward a new set of strategic resources. Lithium, copper, nickel, graphite and rare earths are beginning to occupy the place once held by hydrocarbons. The global energy transition does not eliminate the geopolitics of resources. It transforms it.”

Energy changes, power does too

For more than a century, oil defined the world’s energy architecture. From Texas to the Middle East, access to hydrocarbons shaped alliances, conflicts and global strategies. Transportation, petrochemicals and military systems depended on that fuel that powered the global economy for decades. Today, that system is beginning to transform.

The electrification of the global economy, the accelerated growth of renewable energy and the expansion of electric vehicles are modifying the material base of the energy system. Instead of fossil fuels, the new model increasingly depends on minerals capable of storing electricity, transporting it and sustaining complex industrial technologies. This shift moves the geopolitical center of gravity toward a new group of strategic resources.

 The material base of the energy transition
 
The energy transition is not only technological. It is material. For more than a century, the energy system was dominated by coal, oil and natural gas. The new system that is emerging is based on electricity, energy storage and strategic minerals.

Electrification means that activities previously dependent on fossil fuels begin to use electricity as their main energy source. Electric transport, electrified industry and the digital economy are rapidly increasing global electricity demand, forcing the expansion of generation, transmission and storage infrastructure.

Renewable energies have grown extraordinarily. Solar and wind power have reduced costs and now account for a growing share of the global energy system. But their expansion requires massive electrical grids capable of transporting energy from production areas to consumption centers.

Electric transport is the most visible example. Cars, buses and trucks are gradually replacing combustion engines. This shift reduces dependence on oil, but dramatically increases demand for industrial minerals.
The energy transition does not eliminate dependence on natural resources. It redefines it. The fossil system is being replaced by one based on electricity and critical minerals.

Hard data – Energy transition

  • Renewable energies generate about 30% of global electricity.
  • Global investment in energy transition exceeded USD 1.7 trillion in 2023.
  • It could exceed USD 4 trillion annually by 2030.
  • More than 14 million electric vehicles were sold in 2023.
  • The global electric vehicle market is valued at over USD 500 billion annually and continues to expand rapidly.
  • Demand for critical minerals could multiply between 4 and 6 times by 2040.
  • The global battery market exceeds USD 120 billion per year, with projections surpassing USD 400 billion before 2030.
  • Investments in renewable power generation alone exceeded USD 600 billion in 2023.
  • Global grid infrastructure expansion could require more than USD 20 trillion in investment by 2050.
  • The clean energy sector could represent a market of over USD 10 trillion annually by mid-century.

 Lithium: the metal that stores energy

Lithium is one of the most strategic minerals of the new energy system. Its electrochemical properties make it the basis of rechargeable batteries used in electric vehicles, electronic devices and energy storage.
Lithium-ion batteries allow large amounts of energy to be stored in relatively small spaces, making the development of competitive electric vehicles possible. As countries seek to reduce emissions and fossil dependence, lithium gains increasing strategic value.

The growth of electric vehicles is driving a rapid expansion in demand. Automakers are investing billions in electrification while governments announce restrictions on internal combustion engines.

Lithium is also key for large-scale renewable energy storage. Without storage systems, solar and wind energy cannot sustain stable electrical grids.

Much of the reserves are concentrated in the Lithium Triangle, formed by Chile, Argentina and Bolivia. This region contains some of the richest brines on the planet, giving South America a strategic position in the new global energy system.

Chile, in particular, has been one of the world’s leading producers thanks to the brines of the Atacama Desert, increasingly observed by governments and international companies.

Hard data – Lithium

  • Global demand could multiply up to 5 times by 2040.
  • The global battery market exceeds USD 120 billion annually and could surpass USD 400 billion before 2030.
  • More than 14 million electric vehicles were sold in 2023, representing a market value of over USD 500 billion annually.
  • The Lithium Triangle concentrates more than 50% of known reserves, with an estimated in-ground value exceeding USD 1–2 trillion depending on market prices.
  • Chile is one of the world’s leading producers, generating lithium exports worth over USD 10 billion annually.
  • Global lithium market revenues are projected to exceed USD 180–200 billion by 2030.
  • Major automakers have committed over USD 1 trillion in electrification investments, directly increasing lithium demand.

 Copper: the metal of electrification

If lithium stores energy, copper transports it. It is the fundamental conductor of modern electrical infrastructure, and its importance increases as the economy electrifies.

Electrical grids require enormous amounts of copper. Every transmission line, transformer or distribution system depends on this metal. Electric transport also increases its demand, as an electric vehicle can use several times more copper than a conventional one.

The growth of the digital economy adds further pressure. Data centers, artificial intelligence and telecommunications depend on complex electrical systems where copper remains the dominant material.

Chile holds a central position as the world’s largest producer. Its deposits supply a fundamental share of global demand, making the country a strategic actor in the new energy system.

 Hard data – Copper

  • Chile produces around 25% of the world’s copper, consolidating its position as the leading global producer.
  • The global copper industry exceeds USD 300 billion annually and could surpass USD 500 billion by 2035.
  • An electric vehicle uses between 3 and 4 times more copper than a conventional car.
  • Global copper demand could increase between 30% and 40% by 2040, driven by electrification and digitalization.
  • The energy transition could require more than USD 2–3 trillion in copper-related investments in grids, renewables and infrastructure.
  • Global electrical grids (largely dependent on copper) are valued at over USD 10 trillion in infrastructure assets.
  • Copper exports from Chile generate more than USD 50 billion annually, making it one of the country’s main economic pillars.
  • Renewable energy systems (solar, wind, storage) could increase copper demand by more than 4 million additional tons per year by 2030.

Critical minerals of the new system

The energy transition also depends on rare earths, nickel, cobalt and graphite. These materials are essential for batteries, wind turbines, electric motors and advanced electronic systems.

Rare earths enable the production of high-power permanent magnets. Nickel and cobalt increase battery energy density. Graphite is fundamental in lithium battery anodes.

The production and processing of these minerals are concentrated in a few countries, creating new strategic dependencies. China has achieved a dominant position in several stages of refining and manufacturing, giving it significant influence over global supply chains.

Hard data – Critical materials

  • The global critical materials market exceeds USD 300 billion annually, with projections surpassing USD 600–700 billion by 2040.
  • Demand for key materials such as lithium, copper, nickel, cobalt, and graphite could increase between 4 and 6 times by 2040, driven by electrification and clean energy systems.
  • The global battery value chain is expected to exceed USD 400 billion annually by 2030, up from around USD 120 billion today.
  • Electric vehicles alone could generate demand for critical materials representing more than USD 2–3 trillion cumulatively by 2040.
  • Copper demand from the energy transition could require investments exceeding USD 2 trillion in mining and infrastructure by 2050.
  • Lithium markets are projected to reach USD 180–200 billion annually by 2030, driven by battery storage and mobility.
  • More than 70% of cobalt supply originates in the Democratic Republic of the Congo, while over 70% of its refining capacity is concentrated in China.
  • China controls between 60% and 80% of global processing capacity for rare earth elements and several battery-related minerals.
  • The global clean energy technology sector (dependent on critical materials) is projected to exceed USD 10 trillion annually by mid-century.
  • Recycling of critical materials could reduce primary demand by 10–20% by 2040, but will not offset total growth in consumption.

The new geopolitics of resources

Energy power in the 20th century was linked to oil. In the 21st century, it is increasingly linked to critical minerals and complex industrial chains.
Regions such as South America, Africa, Australia and parts of Asia are gaining strategic relevance as they concentrate reserves of these resources. But control of power depends not only on extraction, but also on the ability to process and transform these minerals into technological products.

Numerous governments have begun to develop policies to secure access to critical minerals, diversify suppliers and strengthen domestic industrial capacities.

Hard data – Geopolitics

  • The global critical minerals market exceeds USD 300 billion annually and could surpass USD 600 billion by 2040.
  • Demand for critical minerals could multiply between 4 and 6 times by 2040, driven by electrification, digitalization and defense industries.
  • More than 70% of global cobalt production comes from the Democratic Republic of the Congo, representing a supply chain valued at over USD 15–20 billion annually.
  • China controls between 60% and 80% of global rare earth processing, linked to industries worth over USD 1 trillion, including electronics, defense and renewable energy.
  • The Lithium Triangle (Chile, Argentina, Bolivia) concentrates more than 50% of global reserves, with a potential strategic value exceeding USD 1–2 trillion.
  • The global supply chain of batteries, electric vehicles and clean technologies represents an industrial ecosystem worth over USD 2–3 trillion annually.
  • Governments worldwide have announced more than USD 1.5 trillion in industrial policies and subsidies to secure supply chains for critical minerals and clean technologies.
  • The United States, European Union and allies are investing over USD 500 billion to reduce dependence on Chinese supply chains.
  • Disruptions in critical mineral supply could impact industries valued at more than USD 10 trillion globally, including automotive, energy and technology sectors.

 
China and industrial dominance

China has developed a strategy to dominate multiple stages of energy supply chains. It produces nearly 75% of the world’s solar panels, controls much of mineral refining and has a strong presence in battery manufacturing.

The country also invests massively in renewable energy and has built the largest installed capacity of solar and wind power on the planet.

Hard data – China

  • China produces approximately 75% of the world’s solar panels, dominating a market valued at over USD 200 billion annually.
  • Around 70% of global battery manufacturing capacity is located in Asia, with Chinese companies leading a market exceeding USD 120 billion annually, projected to surpass USD 400 billion by 2030.
  • China controls between 60% and 80% of global rare earth processing, linked to industries worth more than USD 1 trillion, including defense, electronics, and renewable energy.
  • More than 70% of global cobalt refining capacity is concentrated in China, despite most raw material being extracted in Africa.
  • China invested over USD 500 billion in clean energy in 2023, representing nearly 40% of global investment in the energy transition.
  • The country has the largest installed renewable energy capacity in the world, exceeding 1,300 GW, with infrastructure valued at over USD 2 trillion.
  • Chinese companies are involved in critical mineral projects across Africa, Latin America, and Asia, with overseas investments exceeding USD 100 billion in mining and energy assets.
  • China’s electric vehicle market is the largest globally, exceeding USD 300 billion annually, with domestic manufacturers leading global production.
  • The Chinese industrial ecosystem linked to energy transition and critical materials represents a strategic system worth over USD 3–4 trillion annually.

China – United States rivalry

The energy transition has become a central axis of strategic competition between both powers. China dominates manufacturing and refining; the United States bets on technological innovation and international alliances.

The Inflation Reduction Act mobilizes enormous resources to strengthen the U.S. energy industry and reduce dependence on supply chains dominated by Asia.

Hard data – Rivalry

  • The United States has committed approximately USD 370 billion through the Inflation Reduction Act to accelerate clean energy, domestic manufacturing, and critical mineral supply chains.
  • China invested more than USD 500 billion in clean energy in 2023, maintaining its position as the world’s largest investor in the energy transition.
  • Global energy transition investment exceeded USD 1.7 trillion in 2023, with China accounting for nearly 40% of total spending.
  • China produces around 75% of global solar panels, while the United States and Europe combined account for less than 10% of manufacturing capacity.
  • The global battery market exceeds USD 120 billion annually, with Asian companies (led by China) controlling more than 70% of production capacity.
  • The United States leads in innovation and R&D, with annual energy and technology research spending exceeding USD 150 billion, compared to rapidly growing Chinese investments.
  • China controls between 60% and 80% of global rare earth processing, while the United States remains dependent on external supply chains for key materials.
  • Strategic competition has triggered more than USD 1 trillion in global subsidies and industrial policies aimed at reshaping supply chains.
  • Supply chain disruptions in critical minerals and energy technologies could impact industries worth more than USD 10 trillion globally, intensifying geopolitical competition.

2030 – 2050: the new energy system

If current trends continue, the global energy system could undergo a profound transformation in the coming decades. Electricity generated from renewable sources, smart grids and large-scale storage could dominate the global energy economy.

Hard data – Projection

  • Renewable energies could generate around 50% of global electricity by 2030, with investments exceeding USD 4 trillion annually.
  • More than 200 million electric vehicles could be in circulation worldwide by 2030, representing a market exceeding USD 2–3 trillion annually.
  • Global demand for critical minerals could multiply between 4 and 6 times by 2040, driven by electrification and digital infrastructure.
  • The global electricity market could exceed USD 5–6 trillion annually by 2050, as electrification expands across transport, industry, and cities.
  • Global electricity consumption could double by 2050, requiring investments of more than USD 20 trillion in grid infrastructure and energy systems.
  • The global battery and energy storage market could surpass USD 400–500 billion annually by 2030, driven by renewables and mobility.
  • Clean energy technologies could represent an economic system exceeding USD 10 trillion annually by mid-century.
  • Investments in transmission, distribution, and smart grids could require more than USD 15–20 trillion globally by 2050.
  • Hydrogen, energy storage, and emerging technologies could generate markets exceeding USD 1–2 trillion annually by 2040.

The relevance of critical minerals

The growing relevance of critical minerals will transform not only the energy system but also the global economic architecture. Future industries will depend on a stable supply of essential materials for mass electrification, from copper to lithium and rare earths.

Unlike oil, many of these resources require complex refining and manufacturing processes, introducing additional vulnerabilities into supply chains. Controlling extraction is not enough. True power lies in mastering the entire value chain.

This dynamic exposes the risk that exporting countries may repeat historical dependency patterns if they do not develop industrial capacities. Critical minerals thus become a central axis of global economic and strategic power.

The new map of power

“Lithium, copper, nickel, graphite, cobalt and rare earths have become material pillars of the energy transition. They are essential for batteries, electrical grids, electric motors, wind turbines and advanced electronic systems. Around them, a new economic and geopolitical competition is beginning to take shape, one that could define the balance of power of the 21st century.”

“The energy transition is not only technological. It is a structural transformation of the global economic system. Oil organized the geopolitics of the 20th century; critical minerals and industrial chains could organize that of the 21st.”

“Economies that combine mineral resources, industrial capacity and technological development will have an advantage in the new global system. China has advanced rapidly in that direction. India is growing demographically and industrially. Countries with abundant mineral resources are gaining increasing relevance.”

“New power will not depend only on territories or armies, but on the control of minerals, technologies and infrastructures that will power the planet’s electric economy.”

“From a Darwinian perspective, nations that best adapt to this changing energy environment will lead the future.”

 Bibliography

. International Energy Agency
Global Critical Minerals Outlook.
A key report on the future demand for lithium, copper, nickel, and rare earths in the energy transition.

  • World Bank

Minerals for Climate Action.
A study on the role of critical minerals in decarbonization and global energy infrastructure.

  • International Renewable Energy Agency

World Energy Transitions Outlook.
A global analysis of the structural shift toward renewable energy and its impact on material demand.

  • U.S. Geological Survey

Mineral Commodity Summaries.
A technical reference on reserves, production, and global distribution of strategic minerals.

  • BloombergNEF

Energy Transition Investment Trends.
An annual report on global investments in batteries, clean energy, and industrial supply chains.

  • International Monetary Fund

The Energy Transition and Critical Minerals.
An economic analysis of how critical minerals are reshaping the global economy.

  • Center for Strategic and International Studies

Critical Minerals and the Future of Global Supply Chains.
A geopolitical study on great-power competition over supply chains.

  • European Commission

Critical Raw Materials Act.
A strategic European framework to secure access to critical minerals.

CHILE – STRATEGIC INSTITUTIONS

  • Comisión Chilena del Cobre

Copper Market Reports and Strategic Outlook.
Chile’s official agency for analyzing global copper markets, production trends, and long-term industry outlook.

  • Ministerio de Minería de Chile

National Lithium Strategy and Critical Minerals Policy.
Government framework for lithium development, resource governance, and integration into global supply chains.

  • Servicio Nacional de Geología y Minería

Geological and Mineral Resources Reports.
Oficial data on Chile’s mineral reserves, including lithium, copper, and rare earth potential.