Critical Materials Components
Critical materials components: how refined minerals become magnets, battery cells, and semiconductor devices, and where each material sits in the part.
Related briefings: the critical minerals supply chain, which runs from mine to these parts, and critical mineral feedstock sourcing, which stops at the concentrate the refinery buys.
A Component Is a Specification
Critical materials components are not minerals with a new name. A component is a part with a drawing, a tolerance, and a qualification record: a magnet of a stated grade, a cathode powder of a stated chemistry, a cell of a stated capacity, a gallium nitride device of a stated frequency. The factory that builds a car, a turbine, or a radar set buys the part. It does not buy ore.
Three layers sit between the deposit and that part. The mineral is mined or recovered as a by-product. The material is the refined chemical or alloy, such as a separated rare earth oxide, nickel sulphate, or battery-grade graphite. The component is the engineered object that uses the material. Confusing the layers produces the wrong shortage. A mine disruption, a refinery disruption, and a magnet-plant disruption stop different factories, on different clocks, and they are not solved by the same contract.
The critical minerals supply chain briefing is the map of all three layers and of where processing is concentrated. Critical mineral feedstock sourcing stays on the first layer. This briefing stays on the third: which part uses which material, and what changes when the part's design changes.
Permanent Magnets
The dominant rare earth component is a neodymium-iron-boron magnet. Neodymium, often partly replaced by praseodymium, provides the magnetic strength. Dysprosium or terbium is added to the alloy, or introduced along the grain boundaries, when the magnet must hold that strength at the temperatures inside a traction motor or a generator. Without the heavy rare earth, the magnet demagnetizes as it heats. With it, the magnet becomes a high-temperature component rather than a room-temperature one.
Two machines dominate the tonnage. An electric-vehicle traction motor commonly carries one to two kilograms of rare earth content. A large offshore wind generator, in a direct-drive design that avoids a gearbox, can require up to 600 kilograms of neodymium and dysprosium combined. Those figures are the same order of magnitude used in the supply-chain briefing, and they are why a magnet is an industrial component rather than a specialty one. The heavy rare earths in the high-temperature grades come from a narrower feedstock than the neodymium, which is why a magnet maker can be long light rare earth oxide and short dysprosium at the same time. That split is a feedstock fact, set out in critical mineral feedstock sourcing.
Not every motor uses this magnet. Induction motors and externally excited motors reduce or avoid rare earth content, at a cost in efficiency, mass, or control electronics. They are a real design choice. They are not yet a general substitute in the high-torque, low-mass applications where neodymium-iron-boron remains the working component. A procurement plan that assumes the substitute is already qualified is ahead of the drawing.
Battery Cells, Cathodes, and Anodes
A lithium-ion cell is a set of components stacked and filled, not a single material. The cathode active material, the anode active material, the electrolyte salt, the separator, and the current collectors are bought separately and then assembled. Critical minerals show up in the first three.
Nickel-manganese-cobalt cathodes, and the related nickel-cobalt-aluminum grades, use lithium plus nickel, manganese, and cobalt in proportions the grade name states. Raising the nickel share reduces cobalt per kilowatt-hour. It does not remove nickel, and it raises the purity the nickel sulphate has to meet. Lithium iron phosphate cathodes take a different path. They drop nickel and cobalt. They still require lithium, and they require purified phosphoric acid as well as an iron source.
That second path is no longer a niche. By the IEA's 2025 assessment, lithium iron phosphate batteries covered nearly half of the electric car market, up from less than 10 percent in 2020. The supply chain behind them is tighter, not looser, at the chemical step the chemistry introduced. The IEA finds that China produces 75 percent of the world's purified phosphoric acid. A carmaker that switched cathode chemistry to leave cobalt behind has concentrated a different component.
The anode is mostly graphite, natural or synthetic, spheronized or milled to a battery specification. Silicon is added in some designs to raise capacity. It has not replaced graphite as the anode component. The IEA's 2035 outlook still places China at around 80 percent of battery-grade graphite. An anode powder contract and a flake-graphite contract are not substitutes for each other; the powder is the component input, and the flake is a feedstock to the powder.
Manganese-rich lithium-ion grades and sodium-ion cells are the next designs on the same logic. They change the cathode metals. They do not escape a concentrated midstream. The IEA finds that China produces 95 percent of high-purity manganese sulphate, the specification those manganese-rich and sodium-ion chemistries use. A new cell design is a new component with its own single point of chemical supply, until someone else builds that chemical plant.
The energy pull behind these parts is measurable, and it belongs to the market structure of the chain rather than to any one bill of materials. The IEA reports that lithium demand rose by nearly 30 percent in 2024, and that demand for nickel, cobalt, graphite, and rare earth elements rose by 6 to 8 percent. For lithium, nickel, cobalt, and graphite, the energy sector accounted for 85 percent of demand growth. The cell is where that demand becomes a purchase order. The prices and offtake terms around it are in the supply-chain market section of the critical minerals supply chain briefing.
Semiconductor and Electronics Components
A second family of critical materials components sits in compound semiconductors and specialty electronics, beside the silicon logic chip and easy to omit from an energy-only bill of materials.
Gallium arsenide and gallium nitride are the devices. Gallium arsenide is the older radio-frequency and optoelectronic material, used in high-frequency chips and in LEDs. Gallium nitride handles higher voltages and frequencies in power electronics and in radar. The gallium in both is not mined for its own sake. It is recovered mainly as a by-product of alumina refining, then refined to a purity the crystal grower can use, then grown into a wafer or deposited as a layer. The component maker's input is that wafer or that epitaxial layer, not the bauxite.
Germanium is used in fiber-optic systems, in infrared optics, and in some multijunction solar cells. Like gallium, it arrives as a by-product, in this case mainly of zinc processing, and the component is a crystal, a lens, or a substrate rather than a tonne of metal. Indium tin oxide is a thin conductive coating on flat-panel displays. The indium, again mostly a zinc by-product, is invisible in the finished screen and load-bearing in the production of it.
These parts share a trait with magnets and cathodes. The mineral content per device can be small, and the device can still be unbuildable without it. A sourcing plan written in tonnes will understate a gallium nitride foundry and overstate a wind-turbine magnet, unless the plan is written in the unit the factory buys.
Defense Components Use the Same Materials
Precision-guided munitions, radar, jet engines, and sonar transducers draw on the same magnet and compound-semiconductor components as civilian programmes. The overlap is the strategic fact. A commercial magnet shortage and a defense magnet shortage are not two supply chains. They are two order books at the same plants, with different qualification files and, often, different rights to the output under a priority contract.
That is why a component shortage is less fungible than a commodity shortage. A delayed cathode shipment delays a model of car. A delayed radar device delays a platform that may have no second source qualified. The commercial and defense bills of materials should be read together, because the second source, where it exists, is usually the same short list of qualified plants.
What a Design Change Does
Substitution is real, and it is local to the component. Lithium iron phosphate removes nickel and cobalt from the cathode and leaves lithium, graphite, and phosphoric acid. A motor without a rare earth magnet removes neodymium and dysprosium from that vehicle and adds copper, electronics, or mass somewhere else. Silicon in an anode reduces graphite per cell and does not eliminate it. None of these changes is a general exit from critical materials.
The useful question is which component moved, and which material that component still buys. A programme that tracks only mined cobalt will miss a shift into phosphoric acid. A programme that tracks only neodymium will miss dysprosium inside the same magnet. A programme that tracks only the mine will miss the plant that sinters the magnet, coats the cathode powder, or grows the gallium nitride layer. Those plants are fewer than the mines, they are qualified one customer at a time, and they are the layer at which a critical materials component either exists or does not.
Copper sits under several of these parts without being one of them. It is the winding in the motor, the foil in the cell, and the conductor in the grid that charges the vehicle. The IEA treats copper as a key energy mineral alongside lithium, nickel, cobalt, graphite, and rare earths, and identifies grid build-out as the largest recent driver of its demand. Copper is not a magnet and not a cathode. It is the component that connects them. The upstream ores and concentrates behind all of the above are in critical mineral feedstock sourcing.
Questions this briefing answers
What are critical materials components?
Critical materials components are the parts a factory buys after a mineral has been refined and engineered: permanent magnets, battery cathodes and anodes, cells, and compound-semiconductor devices. The mineral is an input to the material. The material is an input to the component. A shortage at one layer is not automatically a shortage at the others.
Which critical materials go into permanent magnets?
Neodymium-iron-boron magnets use neodymium and often praseodymium as the main rare earths. Dysprosium and terbium are added when the magnet has to keep its strength at high temperature, which is the usual case in an electric-vehicle traction motor and in many wind-turbine generators. A single electric vehicle may carry one to two kilograms of rare earth content. A large offshore direct-drive generator can require up to 600 kilograms of neodymium and dysprosium combined.
Which critical materials go into a battery cell?
A lithium-ion cell uses lithium in the cathode and the electrolyte, graphite in the anode, and, depending on chemistry, nickel, manganese, and cobalt. Nickel-manganese-cobalt cathodes use all three. Lithium iron phosphate cathodes avoid nickel and cobalt and still need lithium, graphite, and purified phosphoric acid. By the IEA's 2025 assessment, lithium iron phosphate covered nearly half of the electric car market, up from less than 10 percent in 2020.
Which critical materials go into semiconductor components?
Gallium is used in gallium arsenide and gallium nitride devices for radio-frequency and power electronics, and in LEDs. Germanium is used in fiber-optic systems, infrared optics, and some multijunction solar cells. Indium, as indium tin oxide, coats flat-panel displays. These are compound-semiconductor and specialty electronic components, not the silicon wafer at the center of most logic chips.
Does a lithium iron phosphate battery remove critical mineral demand?
It removes nickel and cobalt from the cathode. It does not remove lithium, and it does not remove graphite from the anode. The IEA also finds that China produces 75 percent of the world's purified phosphoric acid, which lithium iron phosphate cathodes require, and 95 percent of high-purity manganese sulphate used in manganese-rich chemistries. A chemistry shift changes which component is exposed. It does not exit the supply chain.
Sources
- Global Critical Minerals Outlook 2025 — Executive summary
- Overview of outlook for key minerals
- The Role of Critical Minerals in Clean Energy Transitions
- DOE Critical Minerals and Materials Program
- USGS — Rare earths statistics and information
- USGS — Gallium statistics and information
- USGS — Germanium statistics and information