Critical Mineral Supply

In the era of emerging green technology such as electric vehicles, wind turbines, and solar panels, significant challenges arise—the potential shortage of critical minerals essential for these technologies. A recent report from the International Energy Agency (IEA) highlights the urgent need for long-term investment to secure a stable supply of minerals, which is crucial for the clean energy transition.

Discrepancy Between Increasing Demand and Supply

The IEA report reveals an important issue: demand for critical metals such as lithium, cobalt, nickel, and copper will soon exceed supply if significant steps are not taken immediately. Although metal prices have declined in 2023, easing market pressures, this short-term decline obscures the long-term challenges ahead. For example, the projected global lithium supply will only meet half of the demand by 2035, with copper faring slightly better, meeting just over two-thirds of the demand.

The Role of Investment and Innovation

To address this challenge, the IEA estimates that around $800 billion in mining investment will be needed by 2040. This investment will support the extraction and processing of these critical minerals, ensuring they can meet the increasing demand from the clean energy sector. Additionally, the report emphasizes the important role of recycling in reducing the need for raw mineral extraction. Enhanced recycling technologies and practices could reduce the need for new supply by up to 30% by 2040.

The Need for Recycling and Behavioral Change

"While traditional base metals like aluminum have established recycling processes, the recycling of newly demanded minerals such as lithium and nickel is still insufficient. These materials are crucial for battery storage and clean energy applications but are currently under-recycled. Encouraging behavioral change and innovative recycling technologies will be essential in addressing this shortfall."

Conclusion

As we move closer to a future of cleaner energy, the need for a strong and reliable supply chain for critical minerals becomes increasingly clear. Although the recent decline in metal prices has provided a temporary drought for consumers and lowered costs in industries such as battery manufacturing, it also poses risks to mineral supply in the long term. Investment strategies and a strong focus on innovation in mining and recycling are essential to ensure that the clean energy transition can be achieved and sustained.

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Source : Peterson Indonesia