Mineral surge needed to meet green goals: IEA
Demand for critical minerals could increase by as much as six times by 2040, the IEA says.
Supply of critical minerals including copper, lithium and nickel from countries including Australia will need to surge over the next few decades to help industry meet the world’s climate goals amid a push for net zero emissions, the International Energy Agency said.
Demand for critical minerals could increase by as much as six times by 2040 depending on how rapidly governments act on climate goals, with revenue from the raw materials to surpass coal by the same time frame under several scenarios. That would mark a sharp turnaround from today, where income from coal production is ten times the size of the energy transition minerals.
Australia’s reserves of cobalt, lithium, tungsten and titanium are in the top two in the world. The nation is the largest producer of lithium and rutile, and the second largest producer of rare earths.
A global shift to renewables has accelerated demand for the commodities with the average amount of minerals needed for a new unit of power generation capacity increasing by 50 per cent in the last decade as the share of renewables has risen.
“Building solar plants and wind farms and electric vehicles generally requires more minerals than their fossil fuel based counterparts. A typical electric car requires six times the mineral inputs of a conventional car, and an onshore wind plant requires nine times more mineral resources than a gas-fired power plant,” the IEA notes.
Lithium, nickel cobalt, manganese and graphite are needed for batteries while rare earth elements are integral for magnets used in wind turbines and electric vehicle motors. Electricity networks need copper and aluminium.
“Today, the data shows a looming mismatch between the world’s strengthened climate ambitions and the availability of critical minerals that are essential to realising those ambitions,” IEA executive director Fatih Birol said. “The challenges are not insurmountable, but governments must give clear signals about how they plan to turn their climate pledges into action. By acting now and acting together, they can significantly reduce the risks of price volatility and supply disruptions.”
To meet Paris agreement climate goals, the share of total demand from clean energy leaps out through 2040 to over 40 per cent for copper and rare earth elements, 60 to 70 per cent for nickel and cobalt, and almost 90 per cent for lithium.
Scott Morrison released a 10-year plan in March aimed at dramatically upscaling Australia’s critical mineral and resources sector, amid a global push to create new tech manufacturing supply chains away from China.
The funding support will be targeted at helping manufacturers scale up production, commercialise products and assist Australian businesses in tapping global supply chains.
China has traditionally dominated tech manufacturing, which requires critical minerals and rare earths.
With the US, Japan, Britain, Korea, India and other nations moving towards expanding their sovereign production capacity of electric vehicles, mobile phones and renewable energy systems, Australia is seen as well positioned.
The IEA called for governments to lay out their long-term emissions goals, promote technological advances, boost recycling to ease strain on primary supplies and bolster international collaboration between producers and consumers.