Energy sector drives demand for lithium, other key minerals: IEA

According to the International Energy Agency, demand for key minerals, key to a future focused on low- and zero-emission technologies, is growing, with growing demand from the energy industry. Quantity is considered the main driving force.

IN a new report announced Tuesday, the Paris-based organization said the period from 2017 to 2022 saw “general demand for lithium triple, demand for cobalt increased by 70% and demand for nickel increased by 40%.”

The IEA’s Critical Minerals Market Assessment said the key factor behind the increase was “demand from the energy sector.”

The IEA says investment in development of key minerals has grown by 30% in 2022, building on a 20% increase in 2021.

“Companies specializing in lithium development recorded a 50% increase in spending, followed by those focusing on copper and nickel,” it added, noting that companies in China have increased by nearly 50 percent. doubled investment spending last year.

In December 2022, IEA says renewable energy is on track beyond coal and become the largest source of electricity generation on the planet by the middle of this decade.

Such is the role of minerals that are vital to the operation of technologies including wind turbines and electric vehicles, that the risk is very high.

If all the projects planned for the key minerals sector come to fruition, there could be enough supply to meet the climate commitments announced by governments, the IEA said.

However, there are challenges ahead with the risk of delays to projects as well as “specific technology shortages” creating “very little room for complacency about the adequacy of supply.”

In a sign that the planet is facing a huge task, the IEA says more projects will still be needed by the end of the decade to limit global warming to 1.5 degrees Celsius, a the main objective of the IEA. Paris Agreement.

The size of the mineral market critical to the energy transition will reach $320 billion by 2022, doubling over the past five years. Startups in the key minerals sector raised $1.6 billion last year, a record.

Record-breaking deployments of technologies such as batteries and solar power The IEA said it has driven “unprecedented growth in key mineral markets.”

Because of their great importance for low- and zero-emission technologies — lithium, for example, indispensable for batteries that power electric vehicles — the development of mineable sites and processing of important minerals has important geopolitical implications.

For example, China leads in graphite mining, rare earths and lithium processing, according to the IEA analysis.

Even so, the world’s second-largest economy is still heavily dependent on another country, the Democratic Republic of Congo, for mined cobalt.

Overall, the IEA report said there had been limited progress in diversifying supply over the past few years, adding that “the situation has gotten even worse in some cases. ”

Citing its analysis of the project’s pipelines, the IEA said there are signs of a “somewhat improved picture” for mining, but added that refining operations are a statement. another matter.

“The majority of the planned projects are developed in the incumbent regions, with China holding half of the planned lithium chemical plants and Indonesia accounting for almost 90% of the planned nickel refining facilities. .”

The sustainability certification of the entire key minerals industry also needs to be improved. The IEA says water withdrawals have nearly doubled between 2018 and 2021, while greenhouse gas emissions remain high.

Fatih Birol, executive director of the IEA, said: “At a pivotal time for the worldwide clean energy transition, we are encouraged by the rapid growth of the vital minerals market. critical for the world to meet its energy and climate goals”.

“Even so, major challenges remain,” added Birol. “Much more needs to be done to ensure that critical mineral supply chains are safe and sustainable.”