Minerals Market Doubles as Clean Energy Transition Accelerates

Critical Minerals Market Doubles in Size as Clean Energy Transition Accelerates

The market for critical minerals, crucial for clean energy technologies, has doubled in size over the past five years, according to the International Energy Agency (IEA),

In its first annual IEA Critical Minerals Market Review, released on July 11, the IEA highlights the surging demand for minerals like lithium, cobalt, nickel, and copper, driven by the record deployment of clean energy technologies.


From 2017 to 2022, the energy sector played a pivotal role in tripling the demand for lithium, witnessing a 70% jump in demand for cobalt, and a 40% rise in demand for nickel. The energy transition minerals market reached a value of USD 320 billion in 2022 and is poised for further rapid growth, elevating its significance in the global mining industry.

Consequently, investment in critical mineral development surged by 30% last year, following a 20% increase in 2021. Notably, lithium experienced the most substantial increase in investment, rising by 50%, followed by copper and nickel. This growth in mineral supply development funding supports the affordability and speed of clean energy transitions, which heavily rely on the availability of critical minerals.

IEA Executive Director FatihBirol emphasizes the importance of the market’s rapid expansion, stating, “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.” However, significant challenges persist. Ensuring secure and sustainable supply chains for critical minerals requires additional efforts. The IEA remains at the forefront, conducting cutting-edge research and analysis, while bringing together governments, companies, and stakeholders to drive progress. The agency will host the Critical Minerals and Clean Energy Summit on September 28 to facilitate collaboration and advance the discussion.


The IEA’s analysis suggests that if all planned critical mineral projects worldwide come to fruition, the supply would be sufficient to support the national climate pledges made by governments. Nevertheless, the risk of project delays and technology-specific shortages leaves little room for complacency regarding supply adequacy. Furthermore, additional projects will be necessary by 2030, particularly in a scenario that limits global warming to 1.5°C.


The report also raises concerns about the diversity of supply, with many new project announcements originating from countries that already dominate critical mineral production. Compared to three years ago, the market share of the top three critical mineral producers either remained unchanged or increased further, particularly for nickel and cobalt. Environmental, social, and governance (ESG) practices exhibit mixed progress. While companies are making strides in community investment, worker safety, and gender balance, greenhouse gas emissions remain high, with consistent emissions per tonne of mineral output. Water withdrawals have nearly doubled from 2018 to 2021.


The report briefly mentions environmental concerns related to greenhouse gas emissions and water withdrawals but does not delve deeper into the environmental impacts associated with mining and processing critical minerals. Considering the potential ecological consequences of increased mining activities, a more comprehensive analysis of the environmental footprint of critical mineral extraction would provide a more balanced view.

The report briefly touches on the concentration of critical mineral production in a few dominant countries. However, it does not thoroughly explore the geopolitical implications of such concentration, including the potential risks of supply disruptions, trade conflicts, or increased dependence on specific countries. While the report mentions progress in areas such as community investment, worker safety, and gender balance, it does not provide detailed information on the social and labor practices in critical mineral extraction.


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