Released July 12, 2023 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Global decarbonization of energy, chiefly through renewable electric generation and electric vehicles, has pushed up demand for critical minerals, such as copper, lithium, nickel and cobalt. In a new report, the International Energy Agency (IEA) (Paris, France) details recent demand, supply and price trends for the minerals that are the foundation of a clean-energy economy.
To accompany this report, its first annual analysis of critical minerals, the agency also plans to launch an interactive Critical Minerals Data Explorer that can be used to access the IEA's demand projections for critical minerals under various scenarios and technology trends. Supply-side information will be added in future updates.
The new IEA report, Critical Minerals Market Review 2023, was released July 11. It is a lead-up to the agency's first international summit on critical minerals, which will be held September 28 in Paris.
Around the world, deployment of solar photovoltaic (PV) electric generation rose about 35% in 2022, and about 300 gigawatts (GW) is projected to be added this year, the IEA said. After declining additions in 2021 and 2022, wind generation is expected to grow nearly 70% in 2023. And electric vehicles, which grew about 60% last year, is poised for an additional 30% gain in 2023, to about 13 million new vehicles sold. These clean-energy technologies depend on critical minerals, the IEA noted.
Click on the image at right to see recent global growth trends for solar PV, wind power and electric vehicles.
"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," IEA Executive Director Fatih Birol said in releasing the report July 11. "Even so, major challenges remain. Much more needs to be done to ensure supply chains for critical minerals are secure and sustainable."
Between 2017 and 2022, worldwide demand for lithium, nickel, cobalt and neodymium rose by varying amounts. Not all those minerals are used exclusively for the clean-energy transition: About 56% of mined lithium and 40% of extracted cobalt find their way into clean-energy uses, with lesser percentages of nickel and neodymium ending up in clean energy technologies, the IEA report said. From 2017 to 2022, demand from the energy sector was the main factor behind a tripling in overall demand for lithium, a 70% jump in demand for cobalt and a 40% rise in demand for nickel, the agency added.
Click on the image at right to see recent demand trends for four critical minerals and the percentages of each that are used in clean-energy technologies.
Driven by rising demand and high prices, the energy agency estimated the worldwide market size of key energy transition minerals doubled from 2017 to 2022, reaching $320 billion last year. This contrasts with the modest growth of bulk materials like zinc and lead. As a result, energy transition minerals, which used to be a small segment of the market, are now moving to center stage in the mining and metals industry. The IEA said this expanding market brings new revenue opportunities for the industry, creates jobs for the society and in some cases helps diversify coal-dependent economies.
Click on the image at right to see the IEA's estimate of the growth in global market size for four critical minerals and rare earth minerals.
Strong demand and relatively limited supply pushed up prices for lithium, nickel, cobalt and copper in 2021, but prices diverged in 2022, with lithium continuing to rise and nickel, cobalt and copper falling. Through mid-year 2023, prices have fallen sharply for all four minerals, though three--lithium, nickel and copper--remain above their historical averages through June, according to Critical Minerals Market Review 2023.
Click on the image at right to see recent price trends for four critical minerals.
Strong demand, uncertain supply and generally strong pricing--despite the recent decline--have triggered a surge in capital expenditures by the Metals & Minerals Industry. The IEA report estimated that global investment in critical minerals development surged 30% in 2022, to slightly more than $40 billion, following a 20% gain in 2021.
"Our detailed analysis of the investment levels of 20 large mining companies with a significant presence in developing energy-transition minerals shows a strong rise in capital expenditure on critical minerals, spurred by the robust momentum behind clean-energy deployment," the report said. "Companies specializing in lithium development recorded a 50% increase in spending, followed by those focusing on copper and nickel. Companies based in the People's Republic of China nearly doubled their investment spending in 2022."
Click on the image at right to see a chart of capital expenditures on nonferrous metal production by major mining companies since 2010.
The report also noted changing investment patterns in some minerals: "In a bid to secure mineral supplies, automakers, battery cell makers and equipment manufacturers are increasingly getting involved in the critical minerals value chain. Long-term offtake agreements have become the norm in the industry's procurement strategies, but companies are taking extra steps to invest directly in the critical minerals value chain, such as mining, refining and precursor materials."
There is a hot debate among experts as to whether the future supply of critical minerals will catch up with projected demand. Some, including Enverus, are relatively sanguine about electric-vehicle supply chains. For more on that, see May 30, 2023, article - Enverus Analyst Debunks Three Popular Misconceptions About EVs.
But others, including the IEA, are less certain. "Demand for critical minerals for clean-energy technologies is set to increase rapidly in all IEA scenarios," said Critical Minerals Market Review 2023. "In the IEA's Announced Pledges Scenario (APS), demand more than doubles by 2030. In the Net Zero Emissions by 2050 (NZE) scenario, demand for critical minerals grows by three and a half times to 2030, reaching over 30 million tonnes. EVs and battery storage are the main drivers of demand growth, but there are also major contributions from low-emissions power generation and electricity networks."
For more on the assumptions of the three IEA climate change scenarios, see June 26, 2023, article - New Report Urges Surge in Clean Energy Investments in Emerging Economies.
The energy agency points to three supply-side challenges that need to be remedied to ensure the realization of the world's rapid transition to a lower-carbon future. They are:
"While encouraging," the IEA continued, "practical challenges persist. Risks of schedule delays and cost overruns, which have been prevalent in the past, cannot be ignored. There is also an important distinction between technology-grade products and battery-grade products, with the latter generally requiring higher-quality inputs. This means that even with an overall balance of supply and demand, the supply of battery-grade products may still be constrained. Moreover, new mining plays often come with higher production costs, which could push up marginal costs and prices."
Policy-wise, the agency recognized the efforts of many governments around the world to stimulate mining and refining of critical minerals: "Countries are seeking to diversify mineral supplies with a wave of new policies. There is growing recognition that policy interventions are needed to ensure adequate and sustainable mineral supplies and the proliferation of such initiatives includes the European Union's Critical Raw Materials (CRM) Act, the United States' Inflation Reduction Act, Australia's Critical Minerals Strategy and Canada's Critical Minerals Strategy, among others."
The agency said it has identified nearly 200 policies and regulations across the globe, with more than 100 of these enacted in the past few years. Many of these interventions have implications for trade and investment, and some have included restrictions on import or export.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
To accompany this report, its first annual analysis of critical minerals, the agency also plans to launch an interactive Critical Minerals Data Explorer that can be used to access the IEA's demand projections for critical minerals under various scenarios and technology trends. Supply-side information will be added in future updates.
The new IEA report, Critical Minerals Market Review 2023, was released July 11. It is a lead-up to the agency's first international summit on critical minerals, which will be held September 28 in Paris.
Around the world, deployment of solar photovoltaic (PV) electric generation rose about 35% in 2022, and about 300 gigawatts (GW) is projected to be added this year, the IEA said. After declining additions in 2021 and 2022, wind generation is expected to grow nearly 70% in 2023. And electric vehicles, which grew about 60% last year, is poised for an additional 30% gain in 2023, to about 13 million new vehicles sold. These clean-energy technologies depend on critical minerals, the IEA noted.
Click on the image at right to see recent global growth trends for solar PV, wind power and electric vehicles."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," IEA Executive Director Fatih Birol said in releasing the report July 11. "Even so, major challenges remain. Much more needs to be done to ensure supply chains for critical minerals are secure and sustainable."
Between 2017 and 2022, worldwide demand for lithium, nickel, cobalt and neodymium rose by varying amounts. Not all those minerals are used exclusively for the clean-energy transition: About 56% of mined lithium and 40% of extracted cobalt find their way into clean-energy uses, with lesser percentages of nickel and neodymium ending up in clean energy technologies, the IEA report said. From 2017 to 2022, demand from the energy sector was the main factor behind a tripling in overall demand for lithium, a 70% jump in demand for cobalt and a 40% rise in demand for nickel, the agency added.
Click on the image at right to see recent demand trends for four critical minerals and the percentages of each that are used in clean-energy technologies.Driven by rising demand and high prices, the energy agency estimated the worldwide market size of key energy transition minerals doubled from 2017 to 2022, reaching $320 billion last year. This contrasts with the modest growth of bulk materials like zinc and lead. As a result, energy transition minerals, which used to be a small segment of the market, are now moving to center stage in the mining and metals industry. The IEA said this expanding market brings new revenue opportunities for the industry, creates jobs for the society and in some cases helps diversify coal-dependent economies.
Click on the image at right to see the IEA's estimate of the growth in global market size for four critical minerals and rare earth minerals.Strong demand and relatively limited supply pushed up prices for lithium, nickel, cobalt and copper in 2021, but prices diverged in 2022, with lithium continuing to rise and nickel, cobalt and copper falling. Through mid-year 2023, prices have fallen sharply for all four minerals, though three--lithium, nickel and copper--remain above their historical averages through June, according to Critical Minerals Market Review 2023.
Click on the image at right to see recent price trends for four critical minerals.Strong demand, uncertain supply and generally strong pricing--despite the recent decline--have triggered a surge in capital expenditures by the Metals & Minerals Industry. The IEA report estimated that global investment in critical minerals development surged 30% in 2022, to slightly more than $40 billion, following a 20% gain in 2021.
"Our detailed analysis of the investment levels of 20 large mining companies with a significant presence in developing energy-transition minerals shows a strong rise in capital expenditure on critical minerals, spurred by the robust momentum behind clean-energy deployment," the report said. "Companies specializing in lithium development recorded a 50% increase in spending, followed by those focusing on copper and nickel. Companies based in the People's Republic of China nearly doubled their investment spending in 2022."
Click on the image at right to see a chart of capital expenditures on nonferrous metal production by major mining companies since 2010.The report also noted changing investment patterns in some minerals: "In a bid to secure mineral supplies, automakers, battery cell makers and equipment manufacturers are increasingly getting involved in the critical minerals value chain. Long-term offtake agreements have become the norm in the industry's procurement strategies, but companies are taking extra steps to invest directly in the critical minerals value chain, such as mining, refining and precursor materials."
There is a hot debate among experts as to whether the future supply of critical minerals will catch up with projected demand. Some, including Enverus, are relatively sanguine about electric-vehicle supply chains. For more on that, see May 30, 2023, article - Enverus Analyst Debunks Three Popular Misconceptions About EVs.
But others, including the IEA, are less certain. "Demand for critical minerals for clean-energy technologies is set to increase rapidly in all IEA scenarios," said Critical Minerals Market Review 2023. "In the IEA's Announced Pledges Scenario (APS), demand more than doubles by 2030. In the Net Zero Emissions by 2050 (NZE) scenario, demand for critical minerals grows by three and a half times to 2030, reaching over 30 million tonnes. EVs and battery storage are the main drivers of demand growth, but there are also major contributions from low-emissions power generation and electricity networks."
For more on the assumptions of the three IEA climate change scenarios, see June 26, 2023, article - New Report Urges Surge in Clean Energy Investments in Emerging Economies.
The energy agency points to three supply-side challenges that need to be remedied to ensure the realization of the world's rapid transition to a lower-carbon future. They are:
- Whether future supplies can keep up with the rapid pace of demand growth in climate-driven scenarios
- Whether those supplies can come from diversified sources
- Whether those volumes can be supplied from clean and responsible sources
"While encouraging," the IEA continued, "practical challenges persist. Risks of schedule delays and cost overruns, which have been prevalent in the past, cannot be ignored. There is also an important distinction between technology-grade products and battery-grade products, with the latter generally requiring higher-quality inputs. This means that even with an overall balance of supply and demand, the supply of battery-grade products may still be constrained. Moreover, new mining plays often come with higher production costs, which could push up marginal costs and prices."
Policy-wise, the agency recognized the efforts of many governments around the world to stimulate mining and refining of critical minerals: "Countries are seeking to diversify mineral supplies with a wave of new policies. There is growing recognition that policy interventions are needed to ensure adequate and sustainable mineral supplies and the proliferation of such initiatives includes the European Union's Critical Raw Materials (CRM) Act, the United States' Inflation Reduction Act, Australia's Critical Minerals Strategy and Canada's Critical Minerals Strategy, among others."
The agency said it has identified nearly 200 policies and regulations across the globe, with more than 100 of these enacted in the past few years. Many of these interventions have implications for trade and investment, and some have included restrictions on import or export.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
