Global investment in critical minerals surged by 30% last year, following a 20% jump in 2021, as the market for minerals key to the energy transition doubled in size in five years, the International Energy Agency (IEA) said in a new report on Tuesday.
The size of the market for critical minerals for EVs, wind, solar, and other clean technologies hit $320 billion in 2022, and is set to further grow rapidly and move to the center stage of the mining industry, according to the agency.
As many new projects are being announced, supply has started to catch up with expected demand in 2030, the IEA said. However, concerns about the Chinese dominance in raw and processed materials and battery production capacity could continue to be a challenge to diversifying the supply chains of the clean energy technologies.
Last year, investment in critical minerals development jumped by 30%, as the investment levels of 20 large mining companies with a significant presence in energy transition minerals hiked capital expenditure on critical minerals, spurred by the robust momentum behind clean energy deployment. Companies based in China nearly doubled their investment spending in 2022, the agency noted.
Investment in lithium development soared by 50% in 2022, followed by copper and nickel, the IEA said. Exploration spending jumped by 20%, led by record growth in lithium exploration, especially in hard-rock lithium plays in Canada and Australia.
“A host of newly announced projects indicate that supply is catching up with countries’ clean energy ambitions, but the adequacy of future supply is far from assured,” the IEA said in the report.
“This has reduced the potential mismatch between demand and anticipated supply in 2030, although meeting the requirements in the NZE Scenario still requires further projects to come through,” the agency added.
Despite the surge in investments, concerns remain about the low levels of diversification of supply, with only a few countries dominating some key metals industries. Sustainability of supply is another major concern in minerals mining—emissions remain high while water withdrawals almost doubled from 2018 to 2021, the IEA said.
By Tsvetana Paraskova for Oilprice.com