The market for minerals—key to the clean energy transition—has doubled in size over the past five years, said International Energy Agency (IEA).
According to the first annual critical minerals market review by IEA, minerals that help power electric vehicles, wind turbines, solar panels and other technologies key to the clean energy transition has doubled in size over the past five years.
IEA, however, also found that more work is needed to ensure diversified and sustainable mineral supplies to support energy transitions.
“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,” said IEA Executive Director Fatih Birol.
“Even so, major challenges remain. Much more needs to be done to ensure supply chains for critical minerals are secure and sustainable,” he added.
IEA report shows that record deployment of clean energy technologies is propelling huge demand for minerals such as lithium, cobalt, nickel and copper.
From 2017 to 2022, the energy sector was the main factor behind a tripling in overall demand for lithium, a 70 percent jump in demand for cobalt, and a 40 percent rise in demand for nickel. The market for energy transition minerals reached $320 billion in 2022 and is set for continued rapid growth, moving it increasingly to centre stage for the global mining industry, said IEA in the market review.
According to IEA’s analysis, if all planned critical mineral projects worldwide are realised, supply could be sufficient to support the national climate pledges announced by governments. However, IEA added that the risk of project delays and technology-specific shortfalls leave little room for complacency about the adequacy of supply.
Diversity of supply also remains a concern, with many new project announcements coming from already dominant countries, the report pointed out. Compared with three years ago, the share of the top three critical mineral producers in 2022 either remained unchanged or increased further, especially for nickel and cobalt, said IEA.
The report by IEA comes after Chinese government on July 3 imposed restrictions on exports of two metals, gallium and germanium, along with their chemical compounds starting August 1.
The restrictions are significant because China produces around 60 percent of the global germanium output and around 80 percent of gallium, according to the European industry association Critical Raw Materials Alliance (CRMA).
The restrictions on the export of the metals—which are primarily used in semiconductors—come amid a technological war between China, the US and Europe.
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