The Elements of Innovation Discovered
The Elements of Innovation Discovered
Metal Tech News - October 4, 2023
Electric vehicles and the growing quantities of low-carbon renewable energy to charge them are powering huge demand for critical minerals such as cobalt, copper, lithium, and nickel.
International Energy Agency Executive Director Fatih Birol (second from left) with government and industry delegates at the IEA Critical Minerals and Clean Energy Summit in Paris.
The rapid transition away from the fossil fuels that powered the world through the 20th century and toward lower-carbon sources such as wind and solar is creating enormous new demands for critical minerals and metals like cobalt, copper, lithium, and nickel. This interdependency was highlighted during the first-ever International Energy Agency Critical Minerals and Clean Energy Summit held last week in Paris.
"Locking in secure and sustainable supplies of critical minerals for the clean energy transition has quickly become a top priority for governments, companies and investors around the world," said International Energy Agency Executive Director Fatih Birol.
This priority was evidenced by the government leaders and clean energy supply chain executives from nearly 50 countries that convened at the IEA headquarters in Paris to develop strategies for ensuring secure, sustainable, and reliable supplies of the critical minerals required for a clean energy future.
Aside from the sheer volume of critical minerals and metals needed for clean energy and zero-emissions transportation, IEA is concerned that the supply of these materials is becoming overly concentrated in countries that already dominate production.
"Compared with three years ago, the share of the top three critical mineral producers in 2022 either remained unchanged or increased further, especially for nickel and cobalt," the energy agency penned in its inaugural Critical Minerals Market Review published in July. "Our analysis of project pipelines indicates a somewhat improved picture for mining, but not for refining operations where today's geographical concentration is greater."
China, for example, accounted for roughly 75% of global cobalt refining last year and is expected to increase capacity this year. The country also continues to hold a dominant 90% position when it comes to the production of magnet rare earths needed for EVs and wind turbines.
"The level of over-concentration that we see in critical minerals markets today is unlike that for any other major commodity we have come to rely on in the modern world," said Birol. "History has shown us that failing to properly diversify supplies and trade routes of essential resources comes with profound risks."
China's curbs on exports of gallium and germanium, a pair of metals critical to the manufacturing of computer chips, underscores the risks associated with being overly dependent on one source for critical minerals.
The government delegates and industry executives gathered for the IEA Critical Minerals and Clean Energy Summit agreed to six actions to strengthen critical mineral supply chains.
• Accelerate progress towards diversified minerals supplies: To support countries' climate and clean energy ambitions, it will be necessary to significantly increase supplies of many minerals and metals. Delegates agreed on the need to accelerate progress towards diversified and sustainable supplies of critical minerals.
• Unlock the power of technology and recycling: Participants underscored the importance of tapping the full potential of technology and recycling to alleviate potential strains on supply. New technology can reduce energy and water requirements in extraction and processing and optimize extraction methods, product design, and end-of-life processes to improve resource efficiency.
• Promote transparency in markets: Some critical minerals markets are characterized by limited price transparency that can introduce volatility and hinder new investments. There are also increasing calls from consumers for more information about the risks throughout the supply chain. The participants emphasized the need to promote transparent markets that facilitate new investments by reinforcing due diligence and traceability practices.
• Enhance the availability of reliable information: Data is vital to ensuring a well-functioning market and to allow companies and policymakers to set priorities and address potential chokepoints.
• Create incentives for sustainable and responsible practices: Summit participants highlighted the importance of incentivizing sustainable and responsible production of critical minerals such as rewarding environmental, social, and governance (ESG) efforts, as well as speeding up approvals of new facilities without loosening legal and regulatory protections.
• Foster international collaboration: A recurring theme throughout the summit was that demand growth for critical minerals cannot be solved by any one country or company. Strengthening efforts on international collaboration among governments, industry, stakeholders, and international organizations is crucial to meet critical minerals challenges. One specific area is to enhance security of supply by exploring mechanisms that include voluntary stockpiling alongside other measures to help enhance the resilience of supply chains.
"Fostering inclusive dialogue must be at the forefront of the critical minerals agenda as we navigate this complex and multifaceted issue within the clean energy transition," Birol added.
IEA, which has been a leader in global clean energy metal issues since publishing "The Role of Critical Minerals in Clean Energy Transitions" report in 2021, will spearhead the initiatives agreed upon at the summit.
"With many stakeholders now asking how well prepared they are for this new reality, the IEA is expanding and deepening our work to help countries around the world develop robust and resilient clean energy supply chains," said Birol.
This includes the creation of a new Energy Security and Critical Minerals Division within its secretariat dedicated to these issues.
Looking ahead, the IEA is holding a ministerial meeting in February that will offer countries an opportunity to assess what critical minerals mean for the changing landscape of international cooperation on energy security and climate change.
During the ministerial meeting, IEA will announce the next phase of its "Voluntary Critical Mineral Security Programme," which will include options for stockpiling and other measures designed to ensure transparent and resilient supply chains based on shared experience and information.
"Through its analysis and data, it is the IEA's mission to ensure that critical minerals become a symbol of international cooperation rather than resource anxiety," said Birol.
With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.
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