The chemical processing capabilities of critical materials will be a major strategic issue for global economies in 2026. Located at the heart of mineral supply chains, the midstream segment transforms raw concentrates from mining into highly purified products that are essential to advanced technologies such as batteries, semiconductors, permanent magnets and renewable energy systems.
Chemical processing facilities require significant investment, typically ranging from £300 million to £1.4 billion per site, due to the complexity of the infrastructure and multi-stage processes required for purification. These operations, which combine hydrometallurgy, pyrometallurgy and advanced separation techniques, achieve purity levels of over 99.9%, meeting the strict requirements of cutting-edge industries. They generate substantial margins, often between 300% and 800% between raw concentrates and refined products, while creating a multiplier effect on employment with 5 to 15 indirect jobs per direct job in the supply chain.
However, the geographical concentration of these capabilities represents a critical vulnerability for the economic and national security of many countries. China largely dominates the global landscape, controlling approximately 85–90% of rare earth separation, 60–65% of lithium chemical conversion, 70–75% of cobalt refining, and over 90% of graphite purification. This dominant position confers considerable strategic leverage, accentuated by decades of investment in infrastructure and technical know-how.
Faced with this dependence, international responses are multiplying. In the United States, major initiatives aim to strengthen domestic production and processing, with substantial funding allocated – approximately $3.1 billion through various programmes – and projects such as Project Vault, supported by massive loans from the Export-Import Bank. The European Union, through its Critical Raw Materials Act, has set ambitious autonomy targets for 2030, while Australia is developing hubs to add value to its mineral resources. These efforts are accompanied by the promotion of "friend-shoring", which redistributes capacity among allied countries in order to balance costs and security of supply.
Technological advances are playing a decisive role in this evolution. Automation improves consistency and reduces costs, while innovations in sustainability – such as zero liquid discharge systems or thermal integration to minimise energy consumption – enhance the competitiveness of new facilities. Recycling, or 'urban mining', is emerging as a promising complementary source, particularly for lithium-ion batteries, where growing volumes of waste are expected to unlock significant secondary flows of lithium, nickel, cobalt and graphite in the coming years.
Forecasts for 2026 and beyond indicate an acceleration in the regional diversification of processing capacity. Specialised hubs and industrial clusters are expected to optimise shared infrastructure, while public-private partnerships mitigate financial and technological risks. Return on investment periods remain long – 15 to 25 years for greenfield projects – and require long-term off-take agreements to secure demand.
Against a backdrop of geopolitical tensions and accelerated energy transition, strengthening chemical processing capabilities for critical materials is a strategic priority. Countries that succeed in developing resilient and diversified supply chains will gain a decisive advantage in mastering the technologies of the future.