The transition to a low-carbon economy has intensified global demand for critical minerals, presenting both opportunities and challenges for mineral-rich countries. Expanding beyond raw mineral extraction into mineral processing and component manufacturing, or downstream diversification, has emerged as a potential pathway for economic development, supply chain security, and industrialization. However, this strategy is not universally beneficial and must be carefully evaluated against each country’s comparative advantages, infrastructure, governance capacity, and market conditions. This chapter explores the role of downstream diversification in the energy transition. It highlights the importance of strategic policy design, the risks of unplanned industrialization, and the need for international cooperation. While downstream diversification can enhance value retention and reduce reliance on volatile commodity markets, it is not a guaranteed solution and should be pursued selectively after an evaluation and cost-benefit analysis of other economic development strategies.