A new report from the International Energy Agency (IEA) predicts that demand for critical minerals will rise rapidly as countries pursue their net zero goals. The IEA says clean energy technologies like electric vehicles and wind turbines will require large supplies of these rare materials if they want to meet climate targets by 2035, but there is a risk supply could tighten in response to increased consumption over time.
A new report from the International Energy Agency says that a rising demand for materials such as lithium, copper and nickel, colbat and other rare earth elements will be needed to meet our clean energy goals of going net zero.
The report calls on the government to take action to ensure there are enough critical minerals like cobalt and lithium, which are used in batteries for electric vehicles. The world is running out of these rare metals as mining firms tap into new deposits around the globe.
The reports call on governments across Europe that have long encouraged consumers to buy battery-powered cars with subsidies or tax breaks incentives should now intervene because production has become so costly due low inventories at mines and tight credit markets where banks demand high rates from potential borrowers who need more capital upfront than they previously needed when it was less expensive.
The EEA report states that clean energy technologies need much more minerals than fossil fuel. For example, an electric vehicle requires six times the rare earth minerals of a conventional car and onshore wind plants require nine times as many resources per unit area when compared with similarly sized gas power plants; it reveals that the energy sector is facing an enormous shortage of critical minerals that could have serious consequences if they are not addressed. The world’s demand for these resources will increase six times by 2040, and the targets set in Paris may become even more difficult to achieve.
Mining companies are experiencing a boom of activity as they try to keep up with the increased demand for metals. The world is in need of more and more minerals, but it’s unsure whether there will be enough to meet expectations by 2040. The rapid growth of demand coupled with vulnerability has led investors around the world to take notice and invest accordingly, tailoring strategies according specifically what type of mineral will be needed most (electricity or transportation).
Unlike oil – a commodity produced around the world and traded in liquid markets – production and processing of many minerals are highly concentrated in a handful of countries with just three top producers accounting for more than 75% supplies. With high demands on both sides though from drivers who want cleaner transportation options while also still supporting their dependence on resource extraction industries like mining or drilling companies which is expected to lead further depletion worldwide resources it’s not hard to see why prices have increased substantially over recent years according one commodities analyst at Bloomberg New Energy Finance (BEF). Despite this, complex and sometimes opaque supply chains also increase the risks that could arise from physical disruptions, trade restrictions or other developments in major producing countries.
Furthermore, as demand for gold continues to grow, experts and producers alike are finding that they have depleted most of their resources. New deposits take time to find and extract – meaning we’re likely facing a shortage in just decades if not sooner…