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Systems in depth

One section per system: its state at evidence close, its exposures and what the operational series will watch.

7 min read0 figures5 tables9 notesNR-STRATEGIC-MINERALS-GLOBAL-2026-BASELINE

Contents
  1. ·Edition home
  2. ·Executive summary
  3. 1Small volumes, large dependence
  4. 2Key findings
  5. 3Systems and sectors at baseline
  6. 4Risks and capability
  7. 5Export-control expansion that overlaps a cobalt quota squeeze
  8. 6Readings from the other desks
  9. 7The 2027 agenda
  10. 8Systems in depth
    1. 8.1 Common causes
    2. 8.2 Domino effects
    3. 8.3 Inter-systemic feedbacks
    4. 8.4 Shared vulnerabilities
    5. 8.5 Thresholds and tipping
  11. AMethodology
  12. BData appendix
  13. CReferences and record
  14. ·Complete edition, for print

8.1Common causes

One cause can strike many minerals at once: an export control, a producer quota, a conflict or a price slump. The shared cause matters more than the mineral.

3x

Chinese tariff codes under export control, against 20232

7heavy rare earths

under licence since April 20255

96,600tonnes

DRC cobalt export cap a year1

Table 8.1Evidence at baseline
InstanceMechanism in actionEvidenceStatus
Export controlsChina licenses seven heavy rare earths; the status of the October 2025 expansion is not bound5Reported
Producer quotasthe DRC caps cobalt exports19Reported
Raw export limitsZimbabwe for lithium and Mozambique for graphite2Reported
Price slumplow cobalt prices led the DRC to ban and then cap exports19Reported

Pathways in this mechanism

  • TRD → MIN controls
  • MIN → FIN quotas
  • ENE → MIN conflict

Evidence to bind in 2027

  • common cause tagging of supply events
  • frequency of overlapping controls and quotas

Related editions

  • GLB Global Systems
  • SR-03 Global Supply Chains, Trade and Chokepoints
  • SR-13 Strategic Technology Infrastructure and Sovereign Readiness
  • SR-14 Global Resilience Investment and National Portfolios
  • GS-02 Energy
  • GS-13 Cyber and Digital Systems

8.2Domino effects

A shortage in one mineral removes an input from the next stage. A magnet licence delay reaches vehicle plants; an acid shortage reaches processing and fertiliser.

7heavy rare earths

under licence from 4 April 20255

≈8%

of world aluminium output from the Middle East2

≈25%

of world sulphur supply from the Middle East2

Table 8.2Evidence at baseline
InstanceMechanism in actionEvidenceStatus
Magnets to vehiclesexport volumes fell sharply in April and May 2025 and some automakers cut output2Reported
Acid to processingsulphur disruption raised acid costs; China halted acid exports from May 20262Reported
Smelters to by-productsweak fees threaten gallium and germanium recovery2Inferred
Minerals to chipsthe gallium export ban to the United States was lifted for one year in November 20251Reported

Pathways in this mechanism

  • TRD → MIN → FIN
  • ENE → MIN → FOO
  • INF → MIN → DAT

Evidence to bind in 2027

  • timing of output loss in downstream plants
  • stock cover by plant

Related editions

  • GLB Global Systems
  • SR-03 Global Supply Chains, Trade and Chokepoints
  • SR-13 Strategic Technology Infrastructure and Sovereign Readiness
  • SR-14 Global Resilience Investment and National Portfolios
  • GS-02 Energy
  • GS-13 Cyber and Digital Systems

8.3Inter-systemic feedbacks

Mineral supply responds to what it enables. Demand from batteries and chips lifts prices, prices draw investment, and investment cycles shape the next shortage.

−9%

critical mineral investment, 20252

>20%

fall in battery metals capital spending, 20252

≈40%

cut in lithium company investment, 20252

Table 8.3Evidence at baseline
InstanceMechanism in actionEvidenceStatus
Price to investmentweak prices in 2024 and early 2025 were followed by lower investment in 202523Reported
Demand to priceslithium prices more than doubled on storage demand and tight supply2Reported
Policy to pricethe DRC quota lifted cobalt prices by around 130%2Reported
Cascade amplificationcobalt risk concentrates at refining and manufacturing bridges23Reported

Pathways in this mechanism

  • FIN → MIN
  • CLI → MIN
  • MIN → FIN

Evidence to bind in 2027

  • investment lags by stage
  • price transmission to end users

Related editions

  • GLB Global Systems
  • SR-03 Global Supply Chains, Trade and Chokepoints
  • SR-13 Strategic Technology Infrastructure and Sovereign Readiness
  • SR-14 Global Resilience Investment and National Portfolios
  • GS-02 Energy
  • GS-13 Cyber and Digital Systems

8.4Shared vulnerabilities

Different minerals share the same weak points: one refining country, by-product recovery at base metal smelters, thin stockpiles and slow magnet capacity.

50%

China share of copper smelting capacity, 20252

<10%

of gallium in mined ores is recovered2

<900USD million

annual net cost of stockpiling 11 high-risk materials outside the dominant supplier2

Table 8.4Evidence at baseline
InstanceMechanism in actionEvidenceStatus
One refining countrythe top refiner averaged 72% excluding rare earths2Reported
By-product recoverygallium, germanium and indium come from base metal processing2Reported
Magnet capacityplanned magnet output in diversified regions is about one third of expected mined supply2Reported
Stock coverstockpiles are an emergency buffer; holdings are not consolidated2Inferred

Pathways in this mechanism

  • MIN → INF
  • INF → MIN
  • FIN → MIN

Evidence to bind in 2027

  • stock holdings by country
  • capacity utilisation outside China

Related editions

  • GLB Global Systems
  • SR-03 Global Supply Chains, Trade and Chokepoints
  • SR-13 Strategic Technology Infrastructure and Sovereign Readiness
  • SR-14 Global Resilience Investment and National Portfolios
  • GS-02 Energy
  • GS-13 Cyber and Digital Systems

8.5Thresholds and tipping

A mineral system can absorb stress until a threshold is crossed. Licence regimes, quotas, refined stocks and recovery capacity are such thresholds.

25%

projected copper supply gap in 20352

≈70%

of recovery in battery chains from cross-tier reallocation24

4×

avalanche network density against the physical cobalt chain23

Table 8.5Evidence at baseline
InstanceMechanism in actionEvidenceStatus
Licence thresholdsthe October 2025 expansion would extend control to foreign-made products5Reported
Quota thresholdsthe DRC can move unused quota to its reserve and has no allocation framework beyond 2027210Reported
Cascade thresholdsshocks can produce abrupt nonlinear failures23Reported
Recovery capacityreallocation across tiers drives most recovery in battery chains24Reported

Pathways in this mechanism

  • TRD → MIN threshold
  • MIN → MIN cascade thresholds
  • FIN → MIN recovery finance

Evidence to bind in 2027

  • cascade thresholds at operating scale
  • stock thresholds by mineral

Related editions

  • GLB Global Systems
  • SR-03 Global Supply Chains, Trade and Chokepoints
  • SR-13 Strategic Technology Infrastructure and Sovereign Readiness
  • SR-14 Global Resilience Investment and National Portfolios
  • GS-02 Energy
  • GS-13 Cyber and Digital Systems

Notes

Numbers are the edition’s reference numbers, so a note reads the same in every chapter. The full list, with every source and its licence, is in Annex C. Annex C, references

  1. 2IEA (ed.), Global Critical Minerals Outlook 2026 (revised version, July 2026). International Energy Agency, Paris. Observation year 2025. Accessed 2026-11-03.back
  2. 5Pillsbury Winthrop Shaw Pittman (eds.), China Suspends Export Controls on Certain Critical Minerals and Related Items (client alert; announcements 55 to 58, 61 and 62 suspended from 7 November 2025 to 10 November 2026; Article 2 of Announcement 46 suspended to 27 November 2026; Announcement 18 of 4 April 2025 remains in force). Pillsbury, Washington. Observation year 2025. Accessed 2026-11-03.back
  3. 1U.S. Geological Survey (ed.), Mineral Commodity Summaries 2026 (version 1.3, May 2026; manuscript dated 6 February 2026). U.S. Geological Survey, Reston. Observation year 2025. Accessed 2026-11-03.back
  4. 9Fastmarkets (ed.), Cobalt export quotas: DRC sets limits to rebalance global supply (ARECOMS announcement of 21 September 2025; 18,125 tonnes to the end of 2025; 87,000 tonnes base plus a 9,600 tonne strategic quota for 2026; effective 16 October 2025). Fastmarkets, London. Observation year 2025. Accessed 2026-11-03.back
  5. 7POST-CLOSE, context only: Law-firm briefing, BIS Suspends Affiliates Rule, China Pauses Rare Earth Export Controls (BIS final rule of 10 November 2025; China suspension from 7 November 2025 to 10 November 2026), read on the Legal 500 intelligence page. Observation year 2025. Accessed 2026-11-03.back
  6. 3IEA (ed.), Global Critical Minerals Outlook 2025. International Energy Agency, Paris, 2025. Observation year 2024. Accessed 2026-11-03.back
  7. 23Ouyang, X., Liu, L., Liu, Q. et al., Systemic risks and cascading dynamics in the global cobalt supply chain, Environmental Science and Ecotechnology, 2026 (trade-linked flows, 1998 to 2019). Observation year 2019. Accessed 2026-11-03.back
  8. 24Liu, X., Huang, H., An, F. et al., Resilience assessment of lithium ion battery supply chains under critical mineral shortages, iScience, 2026 (multi-tier network of nine battery manufacturers). Observation year 2026. Accessed 2026-11-03.back
  9. 10Shanghai Metals Market (ed.), Congo creates strategic cobalt reserve to influence supply and prices, regulator says (news report of 16 April 2026; reserve run by ARECOMS; 10% of national export volumes, 9,600 tonnes in 2026). Observation year 2026. Accessed 2026-11-03.back

Cite this chapter

Valadbaygi, S. (Ed.). (2026). Chapter 8: Systems in depth. In Strategic Systems Report 2026: Critical Minerals and Strategic Materials (Baseline Edition 2026, Report No. NR-STRATEGIC-MINERALS-GLOBAL-2026-BASELINE) [Draft under review]. The Global Centre for Risk and Innovation (GCRI).

Every citation form of the whole report, BibTeX and RIS included, is on the edition home. Cite this report

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