Energy sector driving demand for lithium and other critical metals: International Energy Agency

Demand for minerals critical to a future centered around low-emission and zero-emission technologies is growing, according to the International Energy Agency, as the growing needs of the energy industry are seen as a key driver.

in New report The Paris-based organization, published on Tuesday, said that between 2017 and 2022 there was a “triple in total demand for lithium, a 70% increase in cobalt demand and a 40% increase in nickel demand”.

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

The International Energy Agency said investment in critical mineral development increased 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 focused on copper and nickel,” she added, noting that companies in China doubled their investment spending last year.

in December. In 2022, the International Energy Agency said renewables are on track to overtake coal and become the planet’s largest source of electricity generation by the middle of this decade.

This is the role critical minerals play in powering technologies including wind turbines and electric vehicles, and the stakes are high.

The International Energy Agency said that if all planned projects for the vital minerals sector come to fruition, there may be enough supplies to meet the climate pledges announced by governments.

However, there are challenges ahead, with the risk of project delays as well as “technology deficiencies” providing “little room for complacency about the adequacy of supply”.

Noting the huge task facing the planet, the International Energy Agency said more projects will still be required by the end of this decade in order to limit global warming to 1.5°C, a key EU target. Paris agreement.

The market size for minerals essential to the energy transition will reach $320 billion in 2022, which is double over the past five years. Startups in the important metals sector raised $1.6 billion last year, which was a record.

Standard deployment of technologies such as batteries and Photovoltaic solar energy It is driving “unprecedented growth in critical mineral markets,” the IEA said.

Because it is so important to low and zero-emission technologies — lithium, for example, is an integral part of the batteries that power electric vehicles — developing sites that can mine and process critical minerals has an important geopolitical aspect.

China, for example, leads the extraction of graphite and rare earths and lithium processing, according to an IEA analysis.

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

Overall, the IEA report said there has been limited progress when it comes to diversifying sources of supply in the past few years, adding that “the situation has worsened in some cases.”

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

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

The entire biominerals industry’s sustainability credentials need to work, too. Water withdrawals nearly doubled between 2018 and 2021, the International Energy Agency said, while greenhouse gas emissions were stubbornly high.

“At a pivotal moment for clean energy transitions around the world, we are encouraged by the rapid growth in the market for critical minerals, which are essential for the world to achieve its energy and climate goals,” said Fatih Birol, Executive Director of the International Energy Agency.

“However, significant challenges remain,” Birol added. “Much more needs to be done to ensure the integrity and sustainability of supply chains for vital minerals.”