The supply of key minerals is important to the energy transition.
The International Energy Agency (IEA) highlighted a large increase in planned clean tech projects in its first annual market evaluation, resulting to a 30% increase in investments focused on mining essential minerals in 2022. And the supply may be sufficient to meet the demand.
According to the survey, the market for minerals used to power electric vehicles, wind turbines, solar panels, and other clean energy transition technologies has more than doubled in the last five years.
The first annual IEA Critical Minerals Market Review, presented in conjunction with a new online data explorer, reveals that unprecedented deployment of sustainable energy technologies is driving massive demand for minerals such as lithium, cobalt, nickel, and copper.
According to the Agency, the energy industry has been the primary driver of a tripling in global demand for lithium, a 70% increase in demand for cobalt, and a 40% increase in demand for nickel during the last five years.
They said that the market for energy transition minerals will reach $320 billion by 2022 and will continue to develop rapidly.
“A secure and affordable clean energy transition will be critically dependent on the availability of critical minerals around the world,” IEA executive director Fatih Birol said at the review’s release.
“The market response, increasing investments, is an important signal that the markets are buying into [the energy transition], that the clean energy transition will be faster in the years to come, and that we will need more critical minerals.”
Birol elaborated on concerns raised in the report, especially diversification, particularly in the refining area, which remains dominated by China, as well as the increasing emission intensity of production.
According to the report, vital mineral development investments increased by 30% last year, following a 20% growth in 2021. Among the various minerals, lithium witnessed the greatest rise in investment, with a 50% increase, followed by copper and nickel.
According to the paper, if all planned essential mineral projects throughout the world are completed, supply might be sufficient to satisfy governments’ national climate targets. The possibility of project delays and technology-specific deficiencies, on the other hand, offers little room for complacency about supply adequacy.
More projects would be required in any event by 2030 if global warming is to be limited to 1.5 degrees Celsius.
Earlier this year the IEA released a report on supply chains, finding diversity of supply as a critical concern – a finding that remains with the market review, which finds many new project announcements coming from already dominant countries.
Compared to three years ago, they stated, the share of the top three critical mineral producers in 2022 either remained unchanged or increased further, especially for nickel and cobalt.
Accompanying the announcement of the review is the new IEA Critical Minerals Data Explorer, an open interactive online tool that allows users to access and navigate the IEA’s data and projections for critical minerals.
In this first version, the tool provides users with access to the IEA’s demand projections under various scenarios and technology trends. Supply-side information will be added in future updates.