Provides of minerals important for clear power applied sciences are more and more concentrated in a handful of nations, leaving the world weak to produce shocks and value volatility, the Worldwide Power Company has warned.
Demand for crucial minerals has surged lately as a result of fast enlargement of electrical autos, battery storage, renewable power, and grid infrastructure.
The IEA’s International Essential Minerals Outlook 2024, launched on Wednesday, notes that whereas investments in and manufacturing of key minerals resembling lithium, nickel, cobalt, copper and uncommon earths have grown quickly lately, the tempo continues to be slower than is required to fulfill local weather targets.
“Even in a well-supplied market, crucial mineral provide chains could be extremely weak to produce shocks, be they from excessive climate, a technical failure or commerce disruptions,” stated IEA govt director Fatih Birol.
“The influence of a provide shock could be far-reaching, bringing greater costs for customers and decreasing industrial competitiveness.”
The report notes that the share of the highest three mineral producers in complete provide rose from 63 per cent in 2020 to 68 per cent in 2023, whereas in processing the highest three international locations accounted for 90 per cent of world capability.
China alone controls over half of the world’s refining capability for lithium, cobalt and uncommon earths – a robust grip that has raised geopolitical considerations, particularly after Beijing introduced import restrictions in response to US President Donald Trump’s tariffs.
“Low range in crucial mineral markets may harm trade resilience and make provide chains extra weak to disruption,” the IEA report says.
“Immediately’s provide and funding developments are usually not adequate to assist the accelerated power transitions required to fulfill worldwide local weather targets.”
The focus of provide is especially excessive in mineral refining, with China dominating the midstream stage of manufacturing.
The IEA report comes as governments within the US, EU and different main economies push to diversify provide chains for clear power elements, cut back dependency on China, and safe various sources.
Almost all progress in lithium refining capability between 2022 and 2023 occurred in China. Tasks in different areas, particularly Africa and Latin America, have been gradual to advance, typically because of a scarcity of infrastructure, financing, or regulatory assist.
Latest Chinese language export curbs on graphite, gallium, and germanium – supplies utilized in semiconductors and electrical autos – have heightened considerations about future bottlenecks. These actions have triggered renewed requires strategic stockpiles and stronger home funding in crucial mineral extraction and processing.
The report estimates that demand for copper, important for energy grids and electrical autos, may outstrip provide by 7 million tonnes by 2035 if new tasks don’t come on-line rapidly. This might turn out to be a serious constraint on efforts to scale up clear power infrastructure worldwide.
Regardless of the challenges, the IEA report factors to some optimistic developments.
International funding in crucial minerals growth grew by 10 per cent in 2023, and clear power demand is now a serious driver for markets that had been as soon as led primarily by electronics and defence sectors.
Nonetheless, the company emphasises the necessity for stronger worldwide cooperation, clear provide chains, and assist for mineral-rich creating international locations. It additionally calls on governments to enhance environmental and labour requirements in mining and to align extraction with neighborhood growth targets.
“Guaranteeing dependable, sustainable provides of crucial minerals is important for an orderly power transition,” the report says.
The report provides stress on world leaders forward of Cop30, to be hosted by Brazil in 2025, to show present pledges into motion, not simply on emissions, however on securing the supplies wanted to construct a cleaner international financial system.
