Demystifying definitions in critical mineral supply chains

As countries and industries race to secure the minerals needed for the energy transition, digital infrastructure, and advanced manufacturing, critical mineral supply chains are becoming increasingly complex. From mines and processors to refiners, manufacturers, and end users, these supply chains are vast, constantly evolving, and subject to a growing range of regulations, customer expectations, and due diligence requirements.

If that doesn’t sound complex enough, many of the regulations, standards, and industry terms come with strikingly similar acronyms. RMI can mean the ‘Responsible Minerals Initiative’ or the ‘Responsible Mica Initiative’, while CoC can refer to either ‘Chain of Custody’ or ‘Code of Conduct’. Following industry conversations can sometimes feel like a job for an MI5 codebreaker. This article explains the most common terms and concepts used in critical mineral supply chains and explains what they mean in practice.

Critical minerals vs conflict minerals

While the terms are often used interchangeably, critical minerals and conflict minerals are not the same thing.

Critical minerals are minerals that governments consider essential to their economies, national security and strategic industries, and that may be at risk of supply disruption. Governments develop their own critical mineral lists based on factors such as economic importance and supply risk. For example, the EU’s Critical Raw Materials Act (CRMA) lists 34 minerals, including 17 ‘strategic’ raw materials, while the U.S Critical Minerals list includes 60 minerals.

Conflict minerals, on the other hand, usually refer to minerals whose extraction and trade can finance armed groups. Historically this has focused on tin, tantalum, tungsten and gold (3TG). Section 1502 of the US Dodd-Frank Act requires listed companies to report annually on 3TG sourcing from the Democratic Republic of the Congo (DRC) and neighbouring countries, while the EU Conflict Minerals Regulation has required importers to carry out due diligence on their supply chains since 2021.

Critical minerals are primarily about secure supply, and conflict minerals are about avoiding harm. A mineral may fall into either category, or both.

Upstream vs. Downstream

Using the definition used by the Organization for Economic Co-operation and Development (OECD), upstream runs from the mine to the smelter or refiner, while downstream activities cover everything from the smelter or refiner through to the finished product.

Smelters and refiners are often considered supply chain choke points. Although there are relatively few facilities undertaking these processing steps, they typically source from numerous upstream sites. This is often where audit activities are focused because these facilities can provide maximum visibility into the upstream supply chain.

A few key terms are relevant here:

Due diligence is the umbrella term for identifying, preventing and addressing adverse impacts in a supply chain, with extra scrutiny applied to conflict-affected and high-risk areas (CAHRAs). The OECD Due Diligence Guidance sets out five steps: build management systems, assess risk, respond to risks, carry out independent audits and report publicly.

Transparency means knowing who is in your supply chain and sharing it with relevant stakeholders. Traceability goes further, enabling companies to follow a material’s origin, processing and transformation through the supply chain, often using digital platforms.

Chain of Custody (CoC), as defined in ISO 22095, describes how materials and the claims associated with them, such as a carbon footprint and recycled content, are passed from one owner to the next. To manage these characteristics CoC systems use different models, including product segregation, controlled blending, and mass balance, which determine how the materials and its associated characteristics are accounted for throughout the supply chain.

Under segregation, certified material is kept physically separate. Under controlled blending and mass balance, it can be mixed with other materials, provided any sourcing restrictions or contractual requirements continue to be met. However, companies can only sell or claim as much "certified" output as the amount of certified material they have put in. All three support due diligence; none replaces it.

Supply concentration, risk and resilience

High supply concentration occurs when the production or processing of a mineral is dominated by a few countries; this can create risk if they restrict exports. For example, China, which refines most of the world’s rare earths and graphite, has introduced export controls on certain rare earth and graphite products. Indonesia banned nickel ore exports in 2020, while Zimbabwe suspended raw lithium concentrate exports in 2026 to encourage domestic processing.

Resilience refers to the ability to absorb supply shocks and recover from them. It ca be strengthened through offtake agreements (contracts to buy a mine’s future output), joint ventures, stockpiles, and more diverse suppliers. The CRMA aims to ensure that no more than 65% of any strategic raw material comes from a single non-EU country by 2030.

Regulations vs Frameworks vs Standards

Many responsible sourcing requirements are built around a combination of regulations, frameworks and standards, but they serve different purposes.

A regulation is a legal requirement that is mandatory and enforced by government. A framework sets out good practice but is not legally binding on its own. A standard is a set of requirements against which an organization may be audited. The three often work together.

The EU Battery Regulation, as far as we understand, requires companies in scope to conduct supply chain due diligence in accordance with internationally recognised due diligence instruments, including relevant OECD guidance. Industry standards and assurance schemes, such as IRMA and The Copper Mark, can help companies demonstrate responsible sourcing practices.

An audit checks an organisation against a standard at a specific point in time, while certification is the badge awarded when the requirements of that standard have been met.

Glossary

Beyond the terms and concepts above, critical mineral supply chains are filled with acronyms that frequently appear in regulations, standards, reporting requirements and industry discussions. Some of the most commonly used are listed below:

How SLR can help

While the terminology may sometimes feel like a language of its own, understanding the concepts behind it is important for organisations operating in critical mineral supply chains. As regulations, standards and stakeholder expectations continue to evolve, a common understanding of these terms can help organisations make better-informed decisions, meet responsible sourcing obligations and build more resilient supply chains.

Whether you're looking to better understand your supply chain obligations or prepare for emerging responsible sourcing requirements, SLR's multidisciplinary team can help navigate due diligence, traceability, regulatory compliance and responsible sourcing challenges across the critical minerals value chain.