According to a new report from the International Energy Agency (IEA), the market for critical minerals essential to clean energy technologies has doubled in size over the past five years.

The IEA's first annual Critical Minerals Market Review reveals that the increasing deployment of clean energy technologies is driving significant demand for minerals like lithium, cobalt, nickel, and copper.

From 2017 to 2022, the energy sector played a major role in tripling the demand for lithium, witnessing a 70% surge in cobalt demand and a 40% rise in nickel demand. The market for energy transition minerals reached USD 320 billion in 2022, indicating its rapid growth and growing importance in the global mining industry.

In response to this surge in demand, investment in critical mineral development rose by 30% in the previous year, following a 20% increase in 2021. Lithium experienced the most significant rise in investment, with a jump of 50%, closely followed by copper and nickel. This increased investment in mineral supplies is crucial for ensuring the affordability and speed of clean energy transitions, which heavily rely on the availability of critical minerals.

IEA Executive Director Fatih Birol acknowledges the critical role of these minerals in achieving energy and climate goals but highlights the need for secure and sustainable supply chains.

To address these challenges, the IEA aims to lead with cutting-edge research, analysis, and collaboration among governments, companies, and stakeholders. The upcoming Critical Minerals and Clean Energy Summit, scheduled for September 28, will further drive progress in this area.

While the IEA's analysis suggests that the supply from planned critical mineral projects worldwide could support national climate pledges, there are concerns about potential delays and technology-specific shortages that need to be addressed.

Furthermore, diversifying the supply of critical minerals remains a priority, as many new project announcements come from already dominant countries. The report also highlights mixed progress in environmental, social, and governance (ESG) practices, with companies making strides in areas such as community investment, worker safety, and gender balance, while greenhouse gas emissions and water withdrawals present ongoing challenges.

Accompanying the Critical Minerals Market Review 2023 is the new IEA Critical Minerals Data Explorer, an interactive online tool that provides access to the IEA's data and projections for critical minerals. This tool allows users to explore demand projections under various scenarios and technology trends, with plans to include supply-side information in future updates.

Since its previous analysis on the Role of Critical Minerals in Clean Energy Transitions in 2021, the IEA has expanded its work on critical minerals to address emerging challenges and has received ministerial mandates from its member governments. The Agency was also asked by the G7 to provide support on critical minerals supply and demand.

To facilitate international dialogue and cooperation, the IEA will organise the world's first international summit on critical minerals and their role in clean energy transitions on September 28 in Paris.

The summit will bring together ministers from IEA Family countries, major mineral producers, consumers, business leaders, investors, heads of international organisations, and representatives of civil society to discuss and address critical mineral challenges.

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Source: IEA