Did you know that the market size of key energy transition minerals is predicted to skyrocket to a staggering $770 billion by 2040? That’s according to the International Energy Agency’s (IEA) latest report, which envisions achieving net zero emissions by 2050. The report, released in May, provides valuable insights. It covers the future supply and demand of minerals like lithium, copper, nickel, cobalt, graphite, and rare earth elements.
However, the report also highlights the urgent need for substantial investments to fulfill the world’s energy and climate objectives. In 2023, the prices of crucial energy transition minerals experienced a significant downfall. Lithium plunged by 75% and cobalt, nickel, and graphite witnessed drops between 30% and 45%. This decline was largely due to a substantial increase in global supply, serving as a counterbalance to the steep price surges observed in 2021 and 2022.
Consequently, the International Energy Forum (IEF) stresses the need for an exceptional acceleration in copper mining to achieve universal adoption of electric vehicles (EVs) by 2035. According to the IEF, electrifying the global vehicle fleet is no easy feat. It would necessitate the opening of 55% more new copper mines within the next decade and a half. Hence, the world needs to mine a large amount of copper to meet the ambitious goal of vehicle electrification. This amount is staggering and exceeds the total amount mined throughout human history by 115%.
Furthermore, the report sheds light on the limited progress made in diversifying energy transition minerals supply. Currently, refined material production remains heavily concentrated in a handful of countries, with China accounting for nearly 95% of growth. Consequently, this concentration of supply poses a significant risk to the pace of energy transitions. It leaves supply chains and routes vulnerable to disruption.
