By Duygu Alhan
ANKARA (AA) - The market for critical minerals used for the energy transition reached $320 billion last year, according to a Critical Minerals Market Review report released by the International Energy Agency (IEA) on Tuesday.
Copper led the way with $200 million in investments, followed by lithium with $40 million and nickel with $60 million.
The market for minerals to help power electric vehicles, wind turbines, solar panels, and other technologies that are key to the clean energy transition has doubled in size over the past five years, according to the IEA.
The report, released with a new online data explorer, shows that record growth in clean energy technologies is propelling huge demand for minerals such as lithium, cobalt, nickel and copper.
From 2017 to 2022, overall demand for lithium tripled, while demand for cobalt jumped 70% and nickel by 40%.
Even though investments in critical mineral development rose 30% last year, surpassing $40 billion, the IEA found that more investments are needed to meet demand by 2030.
Among the numerous minerals, lithium saw the sharpest increase in investment, with a jump of 50%, followed by copper and nickel.
- Critical minerals crucial to reaching climate goals
Critical minerals are important for the world to meet its energy and climate goals at a time when sustainable energy transitions are becoming increasingly important globally, according to IEA Executive Director Fatih Birol.
However, although demand and investment are increasing, supply diversification in critical minerals remains a cause for concern. Despite progress over the past three years, China still leads the way in supplying critical minerals.
According to the IEA's announced policy scenarios, in line with the scenario accounting for the projected pace of the clean energy transition, demand for critical minerals is projected to more than double by 2030 and rise 3.5-fold by 2050.
However, in line with the IEA's net zero emissions scenario, demand for critical minerals is projected to grow 3.5-fold by 2030.
The IEA estimates that if its planned projects are realized, the supply of critical minerals will be sufficient to meet demand. However, the risk of project delays and technology-specific shortfalls leaves little room for complacency about the adequacy of supply. Thus, more projects would, in any case, be needed by 2030 in a scenario that limits global warming to 1.5 °C.
Although there are major challenges, much more needs to be done to ensure supply chains for critical minerals are secure and sustainable, Birol said.
"The IEA will continue its early leadership in this space with cutting-edge research and analysis and by bringing together governments, companies, and other stakeholders to drive progress, notably at our Critical Minerals and Clean Energy Summit on 28 September," he concluded.