The International Energy Agency’s (IEA) new report states that the market for minerals has doubled over five years. Since companies are moving towards clean energy transition to reduce emissions, mineral are a substitute that is offering clean energy. It helps companies’ power electric vehicles, wind turbines, solar panels and other technologies that are crucial for clean energy transition.
The emerging placements or instalments of the clean energy technologies are increasing the demand for minerals such as lithium, cobalt, nickel and copper, says the first annual IEA Critical Minerals Market Review.
IEA, Executive Director, Fatih Birol said, “At a pivotal moment for clean energy transitions worldwide, we are encouraged by the rapid growth in the market for critical minerals, which are crucial for the world to achieve its energy and climate goals.
“Even so, major challenges remain. Much more needs to be done to ensure supply chains for critical minerals are secure and sustainable. The IEA will continue its early leadership in this space with cutting-edge research and analysis – and by bringing together governments, companies and other stakeholders to drive progress, notably at our Critical Minerals and Clean Energy Summit on 28 September.”
Demand and Investment
From 2017 to 2022, the energy sector contributed to a high rise in the demand for certain minerals. The demand for lithium tripled, a 70% jump in demand for cobalt and a 40% rise in demand for nickel. The market for clean energy transition minerals reached USD 320 billion in 2022. Continuous growth in the clean energy market is increasing, moving to capture the centre stage for the global mining industry.
Due to the rise in demand, investment in such mineral development also increased 30% last year, a 20% in 2021. Lithium shows a 50% hike in investment followed by copper and nickel. Recently, companies are spending strongly to develop mineral supplies to reinforce affordability and speed of clean energy transition.
IEA says that the supply is sufficient to fulfill the national climate pledges by the government. It also says any project delays or technological shortfall leave little room for complacency regarding the adequacy of supply.
Diversity of supply
With new projects coming up, the diversity of supply is a concern.
When compared with the past 3 years, the share of the three leading mineral producers was unchanged or had increased, especially for cobalt and nickel.
The environmental, social and governance (ESG) sector is making slow progress in the matter. Still, greenhouse gas emissions remain high, with roughly the same amount emitted per tonne of mineral output every year. Water withdrawals almost doubled from 2018 to 2021.
Accompanying the Critical Minerals Market Review 2023 is the new IEA Critical Minerals Data Explorer. It is an interactive online tool allowing users to easily access and navigate IEA’s data and projections for critical minerals.
Since 2021 and 2022, the Agency has been expanding to work further on the critical minerals to support policy makers in meeting challenges. G7 has asked it to further support in the supply and demand of critical minerals.
The IEA will host an international summit on critical minerals in Paris. The summit will further international dialogue and cooperation in the clean energy transition. It will involve IEA and other countries’ ministers, large mineral producers and consumers, business leaders, investors, heads of international organisations and civil society representatives.
