A joint report by the Organisation for Economic Cooperation and Development (OECD) and International Energy Agency (IEA) says high levels of supply chain concentration and rising trade restrictions are limiting investment and creating real vulnerabilities in critical mineral supplies.

While efforts to diversify sources are gathering pace, investment still falls short of what is needed to keep up with demand, the organisations state.

In parallel, the operational and governance risks that come with mining and processing activities need to be managed more effectively, lest they delay projects, erode trust and cause future disruptions.

OECD and IEA say reliable access to critical minerals has become central to economic security and competitiveness, but market concentration of processing, smelting and refining is acute.

They explain that national and multilateral initiatives to enhance economic security by developing more resilient and diversified critical mineral supply chains will require supply chain transparency to be fully implementable.

Having surveyed 90 companies covering all major critical minerals to compile the 'Enhancing resilience through traceability' report, OECD and IEA determined that responsible business conduct standards, transparency and traceability are important tools to address some of the world's current challenges.

"When applied in a targeted and pragmatic way, traceability can strengthen resilience, derisk investment and support responsible sourcing. By improving visibility across supply chains, traceability helps identify dependencies, verify responsible practices and target interventions where risks persist," the organisations state.

By looking at the lithium and nickel supply chains in Latin America and Southeast Asia, in particular, the report highlights the importance of a tailored approach to traceability. In Latin America's lithium sector, high refining concentration creates opportunities for targeted interventions while Southeast Asia's nickel sector, with its complex ownership structures, is more challenging.

OECD and IEA say reliable supply chain data is at the core of traceability systems and that price floors and similar trade-related measures need verified information on origin and production conditions to direct support toward trusted and responsible producers.

The organisations find, however, that current traceability systems worldwide are fragmented. In practice, a combination of supply chain mapping, mass balance and auditing are often part of wider due diligence efforts, which does support partial visibility but not end-to-end traceability.

OECD and IEA cite the example of Indonesia's Simbara system that can provide a foundation that targeted policy measures could strengthen.

They find that update of traceability by the private sector is uneven and most traceability systems are being developed within individual companies using proprietary tools with limited public disclosure. OECD and IEA find the strongest traceability uptake is among traders and the weakest is among miners.

BARRIERS TO TRACEABILITY

The joint report affirms there are substantial barriers to the uptake of traceability and that more than half of the survey respondents identify costs and lack of interoperability as barriers to setting up traceability systems.

The operation of such systems is further constrained by confidentiality concerns, supplier leverage and data quality concerns.

Half of survey respondents rank regulatory consistency as the top priority for scaling traceability, with a similar share citing shared data infrastructure.

Ownership opacity is also a significant blind spot. Complex and layered corporate structures obscure who ultimately controls key mineral assets, particularly along nickel supply chains. This matters for both responsible sourcing and economic security.

Despite these challenges, industry adoption of traceability is growing at pace. Nearly three-quarters of respondents plan to increase investment in traceability, but most report that it is too early to identify tangible benefits. The absence of price premia, for example, remains a persistent disincentive.

RECOMMENDATIONS

OECD and IEA recommend a targeted approach to traceability, calibrated to the risk profile and strategic sensitivity of each material and its end use.

They suggest that governments can, in the near term, leverage what is already in place. "Trade data and supplier mapping can be used to monitor processing dependencies. Existing audit programmes can strengthen country-of-origin disclosure for smelters and refiners. Bilateral mineral agreements and development financing can embed responsible business conduct standards and transparency."

In the medium term, the organisations suggest that governments should work to close data gaps, which will require deeper engagement with midstream actors such as traders, exchanges and smelters. "They should strengthen beneficial ownership transparency, especially for complex joint ownership structures."

OECD and IEA also proffer that independent mineral testing as part of tracking the physical evolution of minerals and tracking of recycled content should be introduced.

In the longer term, governments should address measures that require international cooperation. Interoperable data platforms will secure traceability data across borders, the organisations state, adding that systems should adopt identity preservation for the most sensitive materials.

Governments should also adopt expanded digital product passports, aligned with international standards, for batteries and high-impact products.