On August 24, 2022, workers were photographed at a lithium mine in Chile. Lithium is an integral part of electric vehicle batteries.
John Moore | Getty Images News | Getty Images
Demand for key minerals vital to a future centered on low- and zero-emissions technologies is surging, with rising demand from the energy sector seen as a key driver, the IEA said.
exist a new report Between 2017 and 2022, “overall lithium demand tripled, cobalt demand rose 70 percent and nickel demand rose 40 percent,” the Paris-based group said in a report released Tuesday.
The IEA’s Critical Minerals Market Review said the main factor behind the growth was “demand from the energy sector”.
The IEA said investment in key mineral development will increase by 30% by 2022, on top of a 20% rise in 2021.
“Spending by companies specializing in lithium development rose by 50%, followed by companies focused on copper and nickel,” the report added, noting that investment spending by Chinese companies nearly doubled last year.
In December 2022, the International Energy Agency said that by the middle of this decade, renewable energy will overtake coal as the planet’s largest source of electricity generation.
That’s the role critical minerals play in the operation of technologies like wind turbines and electric vehicles, where the stakes are high.
If all projects planned for the critical minerals sector come to fruition, there could be enough supply to meet climate pledges announced by governments, the IEA said.
However, challenges remain ahead, with the risk of project delays and “shortages of specific technologies” leaving “little room for complacency about supply adequacy”.
In a sign of the daunting task facing the planet, the IEA said more projects were still needed to limit global warming to 1.5 degrees Celsius by the end of the decade, a key goal of the agency Paris agreement.
The minerals market, critical to the energy transition, will reach $320 billion by 2022, doubling in size over the past five years. Startups in the critical minerals industry raised a record $1.6 billion last year.
Record deployment of technologies such as batteries Solar Photovoltaic Power Generation This has driven “unprecedented growth in critical minerals markets,” the IEA said.
Given their enormous importance for low- and zero-emission technologies (for example, lithium is an integral part of electric vehicle power batteries), developing sites where critical minerals can be mined and processed is of great geopolitical importance.
For example, China leads in the mining of graphite and rare earths, and in the processing of lithium, according to an analysis by the International Energy Agency.
Still, the world’s second-largest economy remains heavily dependent on cobalt mining in another country, the Democratic Republic of Congo.
Overall, the IEA report said there had been limited progress in diversifying supply sources over the past few years, adding that “in some cases the situation has even worsened”.
Citing its analysis of the project pipeline, the IEA said there were signs of “improvement” in the mining sector, but added that the refining business was not the same.
“Most of the planned projects are developed in existing regions, with China owning half of the planned lithium chemical plants and Indonesia with almost 90% of the planned nickel refining facilities.”
Sustainability credentials across the critical minerals sector also need work. Water withdrawals almost doubled between 2018 and 2021, while greenhouse gas emissions remained high, the IEA said.
“We are encouraged by the rapid growth of markets for key minerals at a critical juncture in the global transition to clean energy, which is critical for the world to meet its energy and climate goals,” said IEA Executive Director Fatih Birol.
“Even so, significant challenges remain,” Birol added. “More needs to be done to ensure that supply chains for critical minerals are safe and sustainable.”
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