IEA Critical Minerals Market Review 2023

The first IEA Critical Minerals and Clean Energy Summit, held in Paris on September 28, 2023, brought together global stakeholders to discuss the growing demand for minerals essential for clean energy technologies. With a focus on solar and electric vehicles, the summit highlighted the challenges and opportunities in ensuring a sustainable, ethical, and long-term supply chain for critical minerals.

Rapid Growth in Critical Minerals Market

According to the IEA Critical Minerals Market Review 2023, the market for critical minerals has experienced remarkable growth, doubling in size over the past five years to reach $320 billion in 2022. Key critical minerals, such as copper, lithium, nickel, and cobalt, are vital components in clean energy technologies, driving this market expansion.

Key Actions Agreed Upon

Ministers, industry leaders, investors, international organizations, and civil societies from 50 countries convened at the summit and agreed on six main actions to ensure the sustainability of critical mineral supply chains:

1. Diversified Mineral Supplies: Emphasizing the importance of diversified and sustainable supplies to support Net Zero emissions goals.
2. Technology and Recycling: Maximizing technology and recycling potential to reduce supply constraints.
3. Market Transparency: Enhancing transparency in pricing across critical mineral markets to boost new investments.
4. Accessibility of Trustworthy Information: Providing accessible and reliable information on critical minerals.
5. Incentives for Sustainable Production: Establishing incentives for responsible and sustainable production of critical minerals.
6. International Cooperation: Strengthening international cooperation efforts in addressing critical mineral supply challenges.

Increasing Demand for Critical Minerals

The IEA estimates a significant increase in demand for critical minerals, including a tripling of lithium demand and substantial growth in cobalt and nickel demand, driven by the energy sector between 2017 and 2022. This demand momentum is expected to continue beyond 2023.

Net Zero Emissions Scenario

In a Net Zero emissions scenario by 2050, the demand for critical minerals is projected to reach 30 million tonnes. Meeting this demand requires comprehensive strategies encompassing investment, innovation, recycling, sustainability standards, and safety measures.

Accelerating Progress

Delegates at the summit emphasized the need to accelerate progress toward diversified and sustainable critical mineral supplies. Recycling and advanced technologies were identified as key tools to reduce supply constraints.

Transparency and Market Monitoring

To address the lack of transparency in pricing across mineral markets, the IEA committed to strengthening its market monitoring capabilities, including supply and demand projections, in line with the G7 Five-Point Plan for Critical Minerals Security.

Incentivizing Responsible Production

Incentivizing sustainable and responsible production of critical minerals, including environmental, social, and governance efforts, was recognized as essential for ethical supply chains.

Global Cooperation

The summit participants acknowledged that addressing the growing demand for critical minerals is a collective effort that requires international cooperation, with no single nation or company capable of addressing the challenge alone.

Future Ministerial Meeting

The IEA will host a Ministerial Meeting in February 2024, providing nations with an opportunity to evaluate the evolving role of critical minerals in global cooperation on energy security and climate change.

Month: Current Affairs - October, 2023