The International Energy Agency (IEA) is concerned about “tensions” over global supply of critical minerals and metals essential for the energy transition, urging increased investment in mining projects so that the world can limit its warming to 1.5 degrees by the end of the century.
“The drop in prices of critical minerals and metals such as copper, lithium, or nickel used for conducting electricity or in batteries for electric vehicles, wind turbines, or solar panels masks the risk of tensions arising over supply,” the agency said in its second annual report on these metals released today.
The agency estimates total global investment needs of $800 billion by 2040 for the planet to meet the goal set by the Paris Climate Agreement of 2015 to limit temperature rise to 1.5 degrees compared to the pre-industrial era.
Last year’s 75% drop in lithium prices and a 30% to 45% drop in cobalt, nickel, and graphite prices led to a 14% reduction in battery prices on average, but also to the risk of drastically reduced investments in the mining sector compared to previous years.
Two metals at the greatest risk are lithium and copper, where there is a significant gap between production and consumption prospects, the report shows. The demand for these metals is increasing, for example, in 2023, electric vehicle sales increased by 35%, and the installation of solar panels and wind energy increased by 75%.
Devices for electrolysis that produce green hydrogen needed for decarbonizing heavy industry or transportation require metals such as nickel, platinum, and zirconium. Their installation increased by 360% in 2023, according to the report.
The IEA also emphasizes the need to diversify supply to counter Chinese hegemony, particularly in the production of two key components for car batteries: anodes, of which 98% come from China, and cathodes, of which 90% come from that country.
“More than half of the lithium and cobalt production processes occur in China. The country dominates the entire graphite production chain in battery manufacturing and in the nuclear industry,” the report says.
Source : Foorbes