Clean Energy Mineral Market up by $320bn – IEA

According to the International Energy Agency (IEA), the market for minerals essential to the clean energy transition reached $320 billion in 2022. However, despite this significant growth, the industry still faces various challenges such as fluctuating prices, supply chain issues, and geopolitical tensions.

Minerals like lithium, cobalt, nickel, and copper have experienced a surge in demand due to the increased deployment of clean technologies like solar panels and electric vehicle batteries. These minerals play a vital role in battery performance, longevity, and energy density. Copper is also essential for all electricity-related technologies.

As the world transitions towards clean energy, there is a greater need for minerals to build solar plants, wind farms, and electric vehicles compared to their fossil fuel counterparts. This surge in demand has created new opportunities for the industry, but it also comes with risks.

The IEA’s first annual Critical Minerals Market Review highlights the challenges faced by the industry. Volatile price movements, supply chain bottlenecks, and geopolitical concerns pose risks to secure and rapid energy transitions. The availability of critical mineral supplies will play a crucial role in the affordability and speed of these energy transitions.

Prices of critical minerals rose in 2021 and early 2022 due to supply chain disruptions caused by the COVID-19 pandemic and geopolitical events such as Russia’s invasion of Ukraine. While prices have stabilised in the latter half of 2022 and into 2023, they remain significantly higher than historical averages.

The IEA emphasises that 2023 will be a crucial year for clean energy technology prices. The trajectory of these prices will depend on the speed of innovation and the stability of mineral markets, which experienced significant volatility in 2022 due to pandemic-related disruptions and global geopolitical uncertainty.