Global Energy Goals Threatened by Critical Mineral Shortages

November 22, 2024 06:07 PM AEDT | By Team Kalkine Media

Global Energy Goals Threatened by Critical Mineral Shortages — Image source: Shutterstock

Critical Minerals and Rising Demand

A surge in demand for renewable technologies and energy solutions like hydrogen and carbon capture is driving the need for critical minerals. However, the depletion of high-grade ores and geographic concentration of mineral reserves have created significant obstacles. For instance, much of the world’s lithium is mined in South America and Australia (ASX:MIN), while cobalt production is heavily dependent on the Democratic Republic of Congo. Nickel mining is dominated by Indonesia, further highlighting the regional disparities in mineral supply.

Challenges in Mineral Extraction

Industry reports indicate that lower-grade ores make extraction less efficient, particularly in the copper sector. Moreover, environmental, social, and governance (ESG) considerations, alongside geopolitical tensions, add layers of complexity to the mineral supply chain. Countries like China, which currently dominate the critical mineral market, have intensified competition with regions like the US and the EU, further complicating global supply security.

IEA’s Perspective on Critical Minerals

The International Energy Agency (IEA) underscores the urgency of addressing these supply challenges. According to the agency, while there was some relief in critical mineral markets in 2023 and 2024 due to increased production, long-term supply issues remain unresolved. Falling mineral prices have reduced investment in new mining operations, raising concerns about future shortages. The IEA points out that maintaining reliable and affordable access to materials such as graphite, lithium, and nickel is essential for achieving energy transition goals.

The Role of Recycling in Mitigating Shortages

Recycling and reusing critical minerals offer a promising avenue for mitigating future supply issues. The IEA estimates that recycling could significantly reduce the need for mining by mid-century, with projected reductions of 40% for copper and cobalt and around 25% for lithium and nickel. This highlights the importance of integrating circular economy practices into clean energy strategies.

Efforts to address critical mineral shortages will require global cooperation, increased investment in mining and recycling, and sustainable practices to ensure the continued progress of the clean energy transition.

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