BAKU, Azerbaijan, May 19. The global shift to clean energy will drive the demand for critical minerals for renewable energy production the lack of which might slow down the green transition, Trend report via the World Energy Outlook Special Report from the International Energy Agency (IEA).
According to the research, such minerals as lithium, graphite, cobalt, nickel, and other rare earths are crucial for solar panels, wind turbines and electric vehicles (EVs) production.
As the IEA research said, today’s supply of those necessary minerals already falls behind. The issue is that many of those come from a small number of producers (for example, compared to oil and gas producers). In case of lithium, cobalt, and rare earths, the world’s top three producers control well over three-quarters of global output.
Among other possible risk of minerals lack is long time for project development. According to the IEA estimates, it takes about 16 years from the discovery to the first production.
“If companies wait for deficits to emerge before committing to new projects, this could lead to prolonged period of market tightness and price volatility,” the report noted.
The quality of resources decline remains a concern, as well as the growing scrutiny for environmental performance.
“Without broad and sustained efforts to improve environmental and social performance, it may be challenging for consumers to exclude minerals produced with poor standards as higher-performing supply chains may not be sufficient to meet demand,” the report added.
The IEA research also noted that minerals industry is highly vulnerable to climate risks. For example, today over 50 percent of global lithium and copper production accounts for water exposed regions. Major producing regions, such as Africa, Australia, and China are inflicted to extreme heat and floods, which is extremely dangerous for those minerals.
Thus, “these risks to the reliability, affordability and sustainability of mineral supply are manageable, but they are real. How policy makers and companies respond will determine whether critical minerals are a vital enabler for clean energy transitions, or a bottleneck in the process,” the IEA research said.
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