Share of top three producing countries in production of selected minerals and fossil fuels, 2019
The developing countries are making a concerted effort to reach the goals of the Paris Agreement (climate stabilization at “well below 2°C global temperature rise”). This would mean a quadrupling of demand of minerals required for clean energy technologies by 2040. For an even faster transition, to hit net-zero globally by 2050, it would require six times more mineral inputs in 2040 than today.
Clean energy technologies are set to become the fastest-growing segment of demand for most minerals. Their share of total demand edges up to over 40% for copper and rare earth elements or REEs. 60-70% for nickel & cobalt and almost 90% for lithium by 2040 in the SDS. Half of the growth in clean energy mineral demand comes from EVs and battery storage. Both require huge amounts of graphite, copper, nickel, and lithium that are in short supply for years now.
Today’s supply and investment plans are not yet ready for accelerated energy transitions. In response, the nations need investment in additional mines and mining equipment, as well as research into new technologies for the discovery of similar materials or compounds. Projects are hosted at different stages of development, but there are many weaknesses that can increase the possibility of market tightness and high price volatility, like, high geographical concentration of production, long project development lead times, declining resource quality, growing scrutiny of environmental and social performance, higher exposure to climate risks. These risks are manageable to meet the mineral supply.
Some of the observations made by IEA are as under
- The rapid deployment of clean energy technologies as part of energy transitions implies a
significant increase in demand for minerals
- The energy sector becomes a leading consumer of minerals as energy transitions accelerate
- Today’s mineral supply and investment plans fall short of what is needed to transform the
energy sector, raising the risk of delayed or more expensive energy transitions
- Production of many energy transition minerals today is more geographically concentrated than that of oil or natural gas
Lastly IEA has shared their six recommendations that would help in accelerating the entire process –
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