The global materials economy is undergoing a structural shift in which value is increasingly defined by processing capacity, refining capability, financing access and control over industrial bottlenecks rather than by raw tonnage of extracted commodities.
Industrial economies are moving away from a system measured primarily in tonnes of steel, coal, chemicals and ores toward one defined by battery-grade materials, purification systems, permitted waste streams, processing corridors, sanctions-resistant financing structures and the ability to integrate remote mineral deposits into industrial supply chains.
Europe’s Materials Base Under Pressure
Europe’s chemicals industry generates approximately €635bn in turnover and supports 1.2 million jobs, but its global market share has declined to 13%, while China accounts for 46% of global chemical sales.
EU crude steel production fell to 125.8 million tonnes in 2025, the lowest recorded level, while imports of semi-finished and finished steel products increased by 14%, representing roughly 30% of EU steel consumption. The European steel sector employs about 293,000 people, but faces higher energy costs, lower utilisation rates and weaker domestic demand relative to global competitors.
The EU Critical Raw Materials Act establishes 2030 targets of 10% domestic extraction, 40% processing, and 25% recycling, while limiting reliance on any single third country to 65% of strategic material processing.
Shift Toward High-Purity and Specialty Materials
The global semiconductor materials market reached US$73.2bn in 2025, reflecting rising demand from advanced-node manufacturing, high-performance computing and high-bandwidth memory applications. Europe’s position is concentrated in high-purity inputs such as specialty gases, wafer chemicals, engineered substrates and filtration systems used in semiconductor production.
Regulatory-driven markets are also expanding. From January 2026, EU member states are required to monitor PFAS levels in drinking water under new compliance rules. The Industrial Emissions Directive introduces stricter PFAS monitoring obligations, including reporting requirements for PFOA and PFHxS from 2028.
Battery recycling rules require recovery of 90% of cobalt, copper, lead and nickel by end-2027, rising to 95% by end-2031, while lithium recovery targets increase from 50% to 80% over the same period.
Structural Decline in European Bulk Materials
European plastics production has declined from 22% of global output in 2006 to 12% in 2024, while circular plastics accounted for 15.4% of European production in 2024, highlighting competitive pressures from energy costs and industrial scale disadvantages.
Bulk chemical segments, including petrochemicals, polymers, ammonia, steel and aluminium smelting, are increasingly treated as strategic assets requiring state support, restructuring or policy protection.
Russia’s Sanctions-Driven Mining System
Russia retains major reserves of gold, nickel, palladium, copper, diamonds, coal, iron ore, potash and rare earths, but operates under restricted access to Western capital markets.
Polyus, Russia’s largest gold producer, reported US$8.7bn revenue, US$6.35bn EBITDA and US$6.3bn pre-tax profit in 2025. Its Sukhoi Log project is estimated to require US$6bn, with expected production start in 2029 and potential output reaching 6 million ounces annually by 2030. The Baimskaya copper project in Chukotka is backed by Rbs1.1tn (US$13.4bn) in investment from state development bank VEB, with projected output increases of 25% in copper and 4% in gold once operational.
Nornickel reported US$13.76bn revenue, US$5.67bn EBITDA and US$2.47bn net profit in 2025, but faces pressure from Indonesian nickel supply growth and long-term palladium demand decline linked to internal-combustion vehicle phase-downs. Coal production rose 1.3% to 438 million tonnes, while exports fell nearly 8% to 213 million tonnes following sanctions and logistical constraints. Russia’s capital markets recorded only three IPOs and three SPOs in 2025, while corporate bond issuance reached Rbs11.5tn across 1,224 issues. In Q1 2026, 133 issuers raised Rbs2.8tn via 317 bond issues. The central bank policy rate stood at 14.5% in June 2026.
Africa’s Resource Expansion and Value Capture
Africa hosts major deposits of copper, cobalt, gold, uranium, iron ore, lithium, phosphates, manganese, chrome and platinum-group metals, but remains constrained by infrastructure and capital access. Ghana produced a record 6 million ounces of gold in 2025, while AngloGold Ashanti reported US$2.725bn profit driven by higher output and pricing.
The Lobito Corridor infrastructure programme, supported by a US$491mn grant, aims to connect the Copperbelt to Angola’s Atlantic coast, with financing expected to reach close in late 2027 and completion by 2030. The African Finance Corporation plans financing deployment in Q3 2026. The Simandou iron ore project in Guinea is expected to export up to 120 million tonnes annually once fully operational, with China Baowu controlling operations for Blocks 1 and 2.
Morocco’s COBCO battery project targets 120,000 tonnes of NMC precursors and 60,000 tonnes of LFP cathodes annually, alongside refining and recycling capacity. Botswana’s diamond stockpile has reached approximately 12 million carats, reflecting weak demand and competition from lab-grown diamonds.
Global Capital and Supply Chain Realignment
African listed equity markets include 1,141 companies with US$561bn market capitalisation, representing 0.4% of global equity value, while non-bank domestic capital pools exceed US$2tn, though deployment into infrastructure remains limited.
The International Energy Agency reports lithium demand rose nearly 30% in 2024, while demand for nickel, cobalt, graphite and rare earths increased 6–8%, driven by electrification and energy transition systems. The G7 announced a critical minerals alliance in June 2026 to reduce reliance on China for materials including lithium, nickel and rare earths, coordinating supply-chain diversification and stockpiling strategies.
China’s Central Role in Processing Chains
China remains dominant in refining, separation and battery-material supply chains, shaping global flows of rare earths, lithium, graphite, cathodes and magnets. Its industrial system continues to anchor global processing capacity, while other regions compete to develop alternative refining and conversion infrastructure.
New Structure of the Materials Economy
The global materials system is increasingly divided into three categories: cash-flow commodities such as gold and selected industrial materials; strategic materials including lithium, rare earths and battery recycling inputs; and high-cost or structurally challenged assets such as European bulk chemicals, Russian coal and weak diamond production.
The defining constraint across all regions is no longer resource availability, but access to financing, processing capability, infrastructure corridors and qualified end markets.
The emerging materials cycle is therefore shaped less by extraction volumes and more by control over refining, purification, logistics networks and financial systems that determine whether mineral resources become tradable industrial inputs or stranded assets.
