The International Energy Agency’s (IEA) Global Critical Minerals Outlook 2024 report has highlighted a need for greater and more diversified investment in order to meet the world’s energy and climate goals.
Following the IEA’s inaugural review of the market last year, the report offers medium and long-term outlooks for the demand and supply of key energy transition minerals, based on the latest technology and policy trends.
After two years of “dramatic” increases, prices of critical minerals fell sharply to pre-pandemic levels in 2023, the report found. Materials used to make batteries saw the biggest declines, with lithium dropping by 75%. Nickel, cobalt and graphite, meanwhile, all dropped between 30% and 45%.
Although the lower prices have been welcome news for consumers, it’s been a headwind for investment. Investment in critical minerals rose 10% in 2023 while exploration spending increased 15% — still strong, the report noted, but slower than in 2022.
IEA Executive Director Fatih Birol says access to critical minerals is essential for smooth and affordable clean energy transitions.
“The world’s appetite for technologies such as solar panels, electric cars, and batteries is growing fast — but we cannot satisfy it without reliable and expanding supplies of critical minerals,” he says.
Birol adds that he is “encouraged” by the recent critical minerals investment boom, as the world is in a better position than it was a few years ago.
“But this new IEA analysis highlights that there is still much to do to ensure resilient and diversified supply.”
The IEA estimates that US$590 billion ($880.49 billion) in new capital investments will be required between now and 2040 under the Announced Pledges Scenario (APS).
The total capital requirements are about 30% higher at nearly US$800 billion over the same period, as the net zero emissions scenario sees faster implementations of clean energy technologies.
The IEA says that the industry is making progress on workplace safety, gender diversity and balance, community investment, and using renewables for mineral production.
However, there remain shortcomings in reducing waste generation, greenhouse gas emissions, and water consumption.
The IEA says there is a need to step-up efforts on recycling, innovating, and encouraging behavioural change to ease potential strains on supply.
According to the IEA, without the strong uptake of recycling and reusing, mining capital requirements would need to be one-third higher.
Write to Aaliyah Rogan at Mining.com.au
Images: IEA Executive Director Fatih Birol (via Reuters)
