Reports demonstrate how growing demand, international cooperation, and social change are shaping the mining sector for the better.

The continuing surge in critical minerals demand, anticipated to easily double by 2040, has significantly impacted the global mining sector while several world powers struggle to slip out from under geopolitical pressures on the battery industry and develop domestic supply chains.

Propelled by technological expansion, the rate of demand growth for critical minerals remained robust in 2023, with lithium rising by 30% and cobalt, graphite, and nickel up by an average of just under 10%. Clean energy applications were one of the primary contributors to this demand growth.

Global demand for critical minerals increased overall by 30% in 2023, driven primarily by ongoing electric vehicle manufacture and deployment, which is still enjoying a positive growth rate, if slightly reduced so far this year.

Beyond the surge in EV manufacturing, key battery minerals include lithium, cobalt, manganese, nickel and graphite, while green tech minerals include rare earth elements and steel alloys of chromium, manganese, and zinc, which go heavily into defense.

The combined market value of copper, cobalt, graphite, lithium, nickel, and rare earths is anticipated to more than double to just short of $800 billion by 2040. Copper, a fundamental component in electrical systems and a commodity otherwise immune to price fluctuations inherent in critical battery metals, is now expected to see the most significant increase in terms of total market value.

According to the International Energy Agency (IEA), the demand for copper and rare earth metals is predicted to grow by 40%. The demand for nickel, cobalt and lithium for clean energy technologies alone is also expected to grow by 60%, 70% and 90%, respectively.

Cross-border investments and diversification

Shaking off China and Russia's grip on critical mineral extraction and processing, Japan and the UK have partnered up to make joint investments in Africa's critical minerals to stabilize existing supply chains, develop mines and infrastructure across the continent, and establish a framework for economic and energy security between the countries and their allies.

The African continent is estimated to host roughly two-thirds of global cobalt reserves, 30% lithium, 20% graphite, and over 30% manganese.

As nations make strategic partnerships to secure robust critical minerals supply chains, the IEA reported last month that in 2023, "investment in critical minerals mining grew by 10% and exploration spending rose by 15% – still healthy, but slower than in 2022."

Following those global energy and climate trends, the sector will require an estimated $800 billion by 2040. Meanwhile, deep-sea nodule mining may be the dark horse the world didn't know it needed.

According to a study published in the Journal of Cleaner Production, producing battery metals from deep-sea nodules could reduce carbon dioxide emissions by 70-75%, cut land use by 94%, and eliminate 100% of solid waste.

However, according to another report, glaringly titled "How to lose half a trillion" by non-profit Planet Tracker, high operating expenditures in extracting metals from the seafloor could mean negative returns for investors, even before factoring in environmental impacts.

Efforts to diversify the supply of critical minerals are gaining momentum, especially in Europe and the U.S., which aim to mitigate risks of unfair price manipulation and supply chain disruptions.

ESG and DEI

Echoing public opinion, an increase in investor and shareholder activism has defined the space through what projects are getting greenlit.

Environmental, social, and governance (ESG) reporting and compliance have taken on a stronger role, positively influencing the entire mining industry. Diversity, equity, and inclusion initiatives have also seen successful implementation throughout.

Standardization of ESG reporting through the widespread adoption of the International Financial Reporting Standards Foundation's new disclosure standards will allow investors to make informed, pro-sustainability decisions.

"The industry is making progress on worker safety, gender balance, community investment and renewable energy uses, but the same cannot be said for waste generation, emissions and water consumption and discharge, suggesting ample scope for improvement," the IEA reported.

There is room for improvement, from tailings management to consistency across global sustainability regulations, but momentum is building, and the sweeping promises and overly ambitious net-zero targets are gaining in substance.