Most investors hear the words artificial intelligence, electric vehicles or clean energy and immediately think about software, chipmakers, batteries or car companies. Fair enough. They are the visible parts of the story. But there is a less glamorous layer underneath all of it: the metals and minerals needed to build the hardware, the networks and the machines.
That is why critical metals are getting more attention. They sit much closer to the start of the supply chain, but they help make a surprising number of modern industries possible. If you want to understand why investors, governments and fund managers are suddenly talking about rare earths, lithium, nickel and copper in the same breath as AI and defence, it helps to start there.
This is also where products like the Global X Rare Earth and Critical Metals ETF (ASX:GMTL) come into the conversation. But before getting to the ETF itself, it is worth understanding the broader theme. Otherwise it is easy to confuse a good story with a good investment.
What are critical metals?
There is no single perfect definition, but critical metals are generally the minerals and metals considered economically important and strategically hard to replace. They matter because modern industries depend on them, while supply can be concentrated, politically sensitive or difficult to expand quickly.
Rare earths often get the headlines because they are used in high-performance magnets and other advanced applications. But the broader critical-metals universe is much wider than that. Global X says GMTL gives exposure across 10 mineral groups: rare earths, platinum group metals, copper, lithium, cobalt, nickel, manganese, zinc, aluminium and chromium.
That list is useful because it shows this is not just an EV story. Copper matters for electrification and grid investment. Lithium, cobalt, nickel and manganese are tied to battery chemistry. Rare earths are important for magnets used in motors, turbines and defence technologies. Platinum group metals remain relevant in industrial systems. In other words, this theme sits across multiple industries, not just one.
Why demand could keep rising
The simple version is that more advanced technology usually means more specialised materials. As industries move from prototype to mass adoption, demand for inputs can rise very quickly. A single new technology can be interesting; several industries all pulling on the same supply chain at once is where investors start paying serious attention.
That is part of the case laid out by Global X in its GMTL explainer. The firm argues that clean energy, battery storage, robotics, artificial intelligence, hydrogen and defence systems all rely on critical materials. If those industries keep expanding at the same time, producers and processors of these metals may become more important than many investors currently realise.
Global X highlights forecasts compiled from groups including the International Energy Agency, the US Geological Survey and McKinsey suggesting demand across the 10 mineral groups in GMTL could rise by an average of roughly 42% by 2030 and approach 90% by 2040. Within that, lithium demand was singled out as a potential standout, while cobalt and nickel were also highlighted as having strong long-term demand growth.
You do not need to believe every forecast to get the bigger idea. If the world wants more batteries, more grid capacity, more data centres, more robotics and more defence capability, it probably also needs a lot more upstream material. That is the picks-and-shovels argument here.
Why the supply side matters just as much
Demand is only half the story. The other half is supply, and that is where things get more interesting. Unlike many consumer-facing industries, critical metals are not produced and refined evenly around the world. In some cases, supply chains are heavily concentrated among just a few countries.
Global X argues that for every mineral in the GMTL universe, more than 50% of global refined output — and in some cases closer to 100% — can be traced back to just two producer nations. China remains especially important across large parts of the complex. That concentration matters because it creates strategic vulnerability for countries and businesses that depend on reliable access to these materials.
This is why the theme is no longer just about commodity prices. It is also about industrial policy, trade friction, national security and supply-chain resilience. In 2025, China again imposed restrictions on rare earth exports, reinforcing the idea that these materials now sit inside a geopolitical contest as well as an economic one.
Why investors keep hearing the word ‘strategic’
A lot of commodities are cyclical. Critical metals can be cyclical too. But what makes this area different is that governments increasingly view some of these materials as strategically important rather than simply useful. If a country wants to build defence systems, electrify its economy, support domestic manufacturing or reduce reliance on geopolitical rivals, access to these inputs matters.
That can lead to two broad responses. One is stockpiling. The other is investing heavily in domestic or allied supply chains. Both can benefit parts of the critical-metals ecosystem, whether that means established producers, refiners, recyclers or newer projects in jurisdictions seen as politically reliable.
For investors, that creates a theme with more moving parts than a standard resources cycle. You are not just asking whether industrial demand will rise. You are also asking whether governments will keep directing capital, subsidies and policy support toward more secure supply chains. That is a big reason this area has become more interesting.
So where does GMTL fit in?
The Global X Rare Earth and Critical Metals ETF (ASX:GMTL) is one way for investors to get exposure to this theme without trying to pick a single mining company or a single metal price. That is probably the cleanest educational way to think about it. The ETF is not the theme itself. It is a wrapper built around the theme.
That distinction matters. If you buy a thematic ETF, you are still making a portfolio decision, not just agreeing with a macro story. You need to look at the holdings, weightings, countries, fee structure and concentration risk. You should also check whether you already own similar exposure through other mining, resources or thematic funds.
In other words, GMTL may be interesting, but that does not automatically make it suitable for every investor. For many people, it would make more sense as a small satellite position rather than a core holding. The real job is to decide whether this theme adds something useful to a portfolio, not whether the story sounds exciting on LinkedIn.
The Rask takeaway
The easiest mistake in markets is to fall in love with the shiny end of a trend and ignore the less glamorous parts that actually make it work. Critical metals are a good reminder that technological change does not happen in a vacuum. It needs real-world inputs, and those inputs can become incredibly valuable when demand rises and supply stays tight.
That does not mean every rare earth or critical-metals investment will work. Some will be too expensive, too risky or too dependent on perfect execution. But as an educational theme, this is worth understanding because it sits at the intersection of technology, industrial policy and geopolitics. And that is exactly why investors are paying closer attention.
Source material used for this article included Global X ETFs Australia’s “Introducing GMTL: Investing in the Materials Frontier” published on 22 May 2026, alongside the current GMTL fund page. This article is general information only and not a recommendation.
