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Critical Minerals

Why is this important?

Critical minerals such as copper, lithium, nickel, cobalt and rare earth elements are essential components in many of today’s rapidly growing clean energy technologies – from wind turbines and electricity networks to electric vehicles. Demand for these minerals is growing quickly as clean energy transitions gather pace.

What is the role of critical minerals in clean energy transitions?

The types of mineral resources used vary by technology. Lithium, nickel, cobalt, manganese and graphite are crucial to battery performance. Rare earth elements are essential for permanent magnets used in wind turbines and EV motors. Electricity networks need a huge amount of aluminium and copper, the latter of which is the cornerstone of all electricity-related technologies.

Why does this matter to energy security?

As countries accelerate efforts to reduce emissions, they also need to ensure energy systems remain resilient and secure. The rising importance of critical minerals in a decarbonising energy system requires energy policy makers to expand their horizons and consider potential new vulnerabilities. Concerns about price volatility, security of supply, and the shifting sands of geopolitics do not disappear in an electrified, renewables-rich energy system.

Critical minerals such as copper, lithium, nickel, cobalt and rare earth elements are essential components in many of today’s rapidly growing clean energy technologies – from wind turbines and electricity networks to electric vehicles. Demand for these minerals is growing quickly as clean energy transitions gather pace.

The types of mineral resources used vary by technology. Lithium, nickel, cobalt, manganese and graphite are crucial to battery performance. Rare earth elements are essential for permanent magnets used in wind turbines and EV motors. Electricity networks need a huge amount of aluminium and copper, the latter of which is the cornerstone of all electricity-related technologies.

As countries accelerate efforts to reduce emissions, they also need to ensure energy systems remain resilient and secure. The rising importance of critical minerals in a decarbonising energy system requires energy policy makers to expand their horizons and consider potential new vulnerabilities. Concerns about price volatility, security of supply, and the shifting sands of geopolitics do not disappear in an electrified, renewables-rich energy system.

Latest findings

Clean energy transitions are driving a significant increase in mineral demand

Demand for critical minerals experienced strong growth in 2023, with lithium demand rising by 30%, while demand for nickel, cobalt, graphite and rare earth elements all saw increases ranging from 8% to 15%. Clean energy applications have become the main driver of demand growth for a range of critical minerals. At around USD 325 billion, today’s aggregate market value of key energy transition minerals aligns broadly with that of iron ore. The combined market value of key energy transition minerals – copper, lithium, nickel, cobalt, graphite and rare earth elements – more than doubles to reach USD 770 billion by 2040 in the NZE Scenario.

Just as clean energy deployment expands, so too does demand for critical minerals. Mineral demand for clean energy technologies almost triples by 2030 and quadruples by 2040 in the NZE Scenario, reaching nearly 40 Mt. Given this trajectory, the development of diverse, resilient and sustainable clean energy supply chains for critical minerals is an essential task.

Critical Minerals Data Explorer

Market value of key energy transition minerals in the Announced Pledges Scenario and the Net Zero Scenario, 2023-2040

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Investments in new mineral supply still growing, despite recent fall

Increases in 2023 were smaller than those seen in 2022, but investment in critical mining nonetheless grew by 10%. Investment by lithium specialist saw a sharp rise of 60% despite weak process. Exploration spending also rose by 15%, driven by Canada and Australia.

Venture capital spending increased by 30%, with significant growth in battery recycling offsetting reducing investment in mining and refining start-ups. China's spending on and acquisition of overseas mines has grown significantly in the past ten years reaching record levels of USD 10 billion in the first half of 2023 with a particular focus on battery metals such as lithium, nickel and cobalt.

Global Critical Minerals Outlook 2024: Market review

Capital expenditure on nonferrous metal production by 25 major mining companies, 2011-2023

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Lithium and graphite show the highest risk scores, though areas of exposure vary by mineral

Lithium and copper are more exposed to supply and volume risks whereas graphite, cobalt, rare earths and nickel face more substantial geopolitical risks. On the other hand, graphite, rare earth elements and lithium have relatively little ability to respond to potential supply disruptions.

Most minerals are exposed to high environmental risks and have particularly high ratings for environmental performance for the refining segment in large part because today’s refining operations occur in places with higher carbon intensity of the grid, mostly in regions relying on coal-based electricity. Mining assets are also exposed to growing water stress and earthquake risks, with around 10% of global copper production facing supply risks related to droughts.

Global Critical Minerals Outlook 2024: Outlook for key minerals

Clean energy transition risk score for key energy transition minerals

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Global Critical Minerals Outlook 2024

The Global Critical Minerals Outlook 2024 follows the IEA’s inaugural review of the market last year. It provides a snapshot of industry developments in 2023 and early 2024 and offers medium- and long-term outlooks for the demand and supply of key energy transition minerals based on the latest technology and policy trends.

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Global Critical Minerals Outlook 2024

Technology report — May 2024