Rising demand for clean energy boosts critical minerals market: Report

New Delhi: The market for key minerals needed to power clean energy technologies has shown significant growth over the past five years, doubling in size, the International Energy Agency (IEA) said in a report on Tuesday.

IEA’s inaugural Critical Minerals Market Review, released today with a new online data explorer, highlights growing demand for minerals such as lithium, cobalt, nickel and copper due to increased deployment of clean energy technologies such as electric vehicles, wind turbines Has gone. and solar panels.

The report shows that the energy sector played a key role in tripling overall lithium demand from 2017 to 2022, while cobalt saw a 70% increase in demand and nickel saw a 40% increase. As a result, the market for energy transition minerals will reach an impressive $320 billion in 2022 and is projected to see further rapid growth, making it a focal point for the global mining industry.

In response to this surge in demand, investment in critical mineral development saw a significant increase of 30% last year, followed by a 20% increase in 2021. Among these minerals, lithium saw the sharpest increase in investment with a remarkable jump of 50%. After this copper and nickel come. The substantial increase in corporate spending on mineral supplies reinforces the affordability and momentum of the clean energy transition, underscoring the importance of availability of critical minerals.

IEA Executive Director Fatih Birol said, “At a critical moment in the worldwide clean energy transition, we are encouraged by the rapid growth of markets for critical minerals, which are vital for the world to achieve its energy and climate goals ” However, Birol acknowledged the existence of major challenges and stressed the need to secure and maintain supply chains for critical minerals.

The IEA aims to lead in this field by conducting cutting edge research, analysis and promoting collaboration between governments, companies and other stakeholders. The agency plans a Critical Minerals and Clean Energy Summit on September 28, where progress in this important area will be discussed.

The IEA’s analysis shows that if all planned significant mineral projects around the world materialize, supply could exceed national climate promises announced by governments. Nevertheless, concerns remain over potential project delays and technology-specific shortages, leaving little room for complacency in ensuring adequate supplies. Even more projects will be needed to meet the goal of limiting global warming to 1.5°C by 2030.

The report also raises concerns about supply diversification, as many new project announcements are coming from countries that already dominate the vital minerals market. In 2022, the shares of the top three important mineral producers will either remain unchanged or increase further, especially in the case of nickel and cobalt.

The report also highlights mixed progress in environmental, social and governance (ESG) practices. While companies have made progress in community investment, labor protection and gender balance, greenhouse gas emissions associated with mineral production remain high, with consistent annual emissions per ton of mineral production. Additionally, water withdrawals are slated to nearly double between 2018 and 2021.

In conjunction with the Critical Minerals Market Review 2023, the IEA has introduced the Critical Minerals Data Explorer, an interactive online tool that provides easy access to the Agency’s data and projections for critical minerals. The initial version of the tool enables users to explore demand projections under a variety of scenarios and technology trends, with plans to include supply-side information in future updates.

Since the publication of the IEA’s influential analysis on the role of critical minerals in the clean energy transition in 2021, the agency has expanded its work on critical minerals to help policymakers address emerging challenges. In addition, the IEA has been requested by the G7 to provide assistance in various aspects of supply and demand for critical minerals.

To promote international dialogue and cooperation on this matter, the IEA is set to host the world’s first international summit on critical minerals and their role in the clean energy transition in Paris on 28 September. The summit will bring together ministers from IEA member states, as well as major mineral producers and consumers, business leaders, investors, heads of international organizations and civil society representatives.

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UPDATE: July 11, 2023, 02:13 PM IST