Energy sector driving demand for lithium, other critical minerals: IEA

According to the International Energy Agency, the ever-growing needs of the energy industry are seen as a key driver, fueling demand for key minerals that are key to the future, especially in low- and zero-emission technologies.

of new report The Paris-based group announced on Tuesday that between 2017 and 2022, “overall demand for lithium has tripled, demand for cobalt surged by 70%, and demand for nickel increased by 40%.” said.

The IEA’s Critical Minerals Market Review said the main driver of the increase was “demand from the energy sector”.

According to the IEA, investment in the development of critical minerals will increase by 30% in 2022, following a 20% increase in 2021.

“Firms specializing in lithium development recorded a 50% increase in spending, followed by firms focused on copper and nickel,” the report added, adding that Chinese firms nearly doubled their investment spending last year. pointed out that the increase

In December 2022, IEA announces renewables are on track overtake coal And by the mid-decade, it will be the largest source of electricity on Earth.

The stakes are high for such a big role for critical minerals in the operation of technologies such as wind turbines and electric vehicles.

The IEA said all planned projects in the critical minerals sector could provide enough supply to meet the climate commitments announced by governments.

However, the risk of project delays and “technology-specific shortages” pose challenges ahead, with “little room for complacency in terms of adequacy of supply.”

In a sign of the enormous challenges facing the planet, the IEA said many more projects are needed by the end of the decade to keep global warming below 1.5 degrees Celsius. Paris Agreement.

The market for minerals essential to the energy transition will reach $320 billion in 2022, doubling in the last five years. Critical minerals startups raised a record $1.6 billion last year.

A record introduction of technology such as batteries and batteries Solar power The IEA said this has facilitated “unprecedented growth in a critical minerals market”.

Given the great importance of low- and zero-emission technologies (lithium is essential in the batteries that power EVs, for example), the development of sites capable of mining and processing important minerals has significant geopolitical implications. There is a side.

China, for example, is leading the way in graphite and rare earth extraction and lithium processing, according to IEA analysis.

Nevertheless, the world’s second largest economy still relies heavily on another country, the Democratic Republic of the Congo, for mined cobalt.

Overall, the IEA report said limited progress had been made on diversifying supply sources over the past few years, adding that “in some cases things have gotten worse.”

Citing an analysis of the project pipeline, the IEA said there were signs of “some improvement” on mining, but added that refinery operations were a different story.

“Most of the planned projects are being developed in existing areas, half of the planned lithium chemical plants are owned by China, and almost 90% of the planned nickel refining facilities are in Indonesia. ing.”

Proving the sustainability of the entire critical minerals industry also needs work. The IEA said water withdrawals nearly doubled from 2018 to 2021, while greenhouse gas emissions remain high.

Fatih Birol, Executive Director of the IEA, said: “We are at a critical time for the clean energy transition around the world, and we are encouraged by the rapid growth of markets for critical minerals that are essential for the world to meet its energy and climate goals.” said.

“Still, big challenges remain,” Birol added. “More needs to be done to ensure that supply chains for critical minerals are safe and sustainable.”