Critical minerals supply could pull close to demand by 2030, says IEA

Clean tech minerals market surges to $320 billion in 2022

In a significant breakthrough for energy transition, the supply of critical minerals is poised to meet the levels necessary to support the ambitious climate pledge by 2030, the International Energy Agency (IEA) said on Tuesday.

Driven by rising demand and high prices, the market size of key energy transition minerals doubled over the past five years, touching $320 billion in 2022.

Investment in critical minerals development recorded a sharp uptick by 30 per cent in 2022. This is following a 20 per cent increase in 2021, IEA said in its Critical Minerals Market Review 2023 report.

“Rapid growth in demand is providing new opportunities for the industry, but a combination of volatile price movements, supply chain bottlenecks and geopolitical concerns has created a potent mix of risks for secure and rapid energy transitions,” IEA said.

The IEA’s analysis suggests that if all planned critical mineral projects worldwide materialise, the supply could meet the national climate pledges announced by governments.

Nevertheless, concerns remain due to potential project delays and technology-specific shortages, leaving little room for complacency in ensuring adequate supply.

Meeting the target of limiting global warming to 1.5 °C by 2030 would require even more projects to be undertaken.

The substantial growth in corporate spending on mineral supplies reinforces the affordability and pace of clean energy transitions. This underscores the significance of the availability of critical minerals.

With record deployment of clean technologies, such as solar panels and electric car batteries, the market for minerals such as lithium tripled while cobalt and nickel demand increased by 70 and 40 per cent, respectively, between 2017 and 2022.

Exploration spending also rose by 20 per cent in 2022, driven by record growth in lithium exploration.

Critical mineral start-up firms also raised a record $1.6 billion in 2022, up 160 per cent from the previous year.

While the supply is improving, IEA warned that delays and cost overruns for projects posed a risk to the upbeat scenario.

Alongside the Critical Minerals Market Review 2023, the IEA has introduced the Critical Minerals Data Explorer, an interactive online tool. It provides easy access to the agency’s data and projections for critical minerals.

To foster international dialogue and cooperation, the IEA is set to host the world’s first international summit on critical minerals in Paris on September 28.