🌱 What key environmental issues persist in mining?
The IEA report highlights that little progress is being made on improving sustainability in the production of critical minerals. According to the IEA, there was no meaningful decrease in the production of emissions by 20 major companies in the sector between 2018 and 2021. Within this timeframe, the withdrawal of water also nearly doubled at critical mineral production sites. In line with these findings, the report has called on buyers to demand higher production standards from producers.
🌱 How is the market expected to grow?
The IEA expects the market growth for all critical minerals to remain strong – and for it to continue to be exceptionally strong for lithium. Notably, the demand for lithium increased to nearly the sevenfold between 2017 and 2022. According to the IEA, to reach net zero emissions by 2050, the demand for lithium will rise another seven times from 2021 levels by 2030.
🌱 What mineral dependencies are there?
The report highlights that there is an “extreme concentration of mining and refining of many critical minerals in a handful of countries”. Notably, more than 70% of the global supplies of cobalt originates from the Congo and over two-thirds of the global extraction of rare earth metals is carried out in China. Yet, according to the report, there are signs of increasing diversification in the extraction. What remains an area of concern, however, is the processing. Currently, most critical minerals – such as cobalt, copper, and lithium – are processed in China. Going forward, half of the planned global lithium chemical plants will be located in China and 90% of all planned nickel refining capacity will be in Indonesia.
🌱 Can net zero targets be met with the planned projects?
The report held that if all the mining and processing projects that are currently planned globally are carried out, this “[c]ould provide two-thirds of all the critical minerals needed for the world to meet its net zero targets”. The planned projects could bring us onto a solid trajectory until 2030, so long as “approval delays and cost overruns” do not occur. After 2030, additional projects would be needed to sustain development aligned with net zero targets.
🌱 Are critical mineral start-ups getting funding?
While venture capital investments declined significantly last year, start-ups in the critical minerals space still managed to raise $1.6bn in total. This accounted for merely 4% of last year’s venture capital funding into clean energy. Yet, the investments for critical mineral start-ups did increase by 160% from 2021, and investments have continued to be strong in the first quarter of this year.