International Energy Agency: Over The Past Five Years, Global Lithium Demand Has Tripled And Lithium Mine Investment Has Grown Rapidly

The IEA said that between 2017 and 2022, the market for key mineral resources needed for clean energy technologies such as electric vehicles, wind power and photovoltaics doubled in five years to reach $320 billion in 2022.

According to the "Critical Minerals Market Review 2023" report recently released by the International Energy Agency (IEA), the expanding energy industry has driven global demand for critical minerals, including lithium.

The IEA said that between 2017 and 2022, the market for key mineral resources needed for clean energy technologies such as electric vehicles, wind power and photovoltaics doubled in five years to reach $320 billion in 2022. While nowhere near the $2 trillion oil and gas market, growth is still enormous.

Among them, in the past five years, the total global demand for lithium has tripled, the total demand for cobalt has increased by 70%, and the total demand for nickel has increased by 40%.

In this regard, the International Energy Agency pointed out that this growth was mainly due to the sales of electric vehicles, which increased by 60% in 2022 and exceeded 10 million units last year. Energy storage systems grew even faster, with capacity doubling in 2022.

In addition, from 2021 to early 2022, the prices of various key minerals fluctuated sharply, and the prices of lithium and nickel increased significantly. Although prices for most minerals have declined starting in 2023, they remain above historical averages.

Stimulated by demand and prices, global investment in key minerals such as copper, nickel, cobalt, and lithium exceeded $40 billion in 2022, a year-on-year increase of 30%. Among them, the growth rate of investment in lithium mines was the highest, reaching 50%.

The IEA said that the development of the new energy industry, especially the massive promotion of electric vehicle batteries, has driven the key minerals market to achieve "unprecedented growth". Among them, the development of lithium, which is regarded by the United Nations as the "pillar of a fossil fuel-free economy", has increased by 90%, and it is expected to become the main way of clean energy storage in the future.

The IEA predicts that under a net-zero emissions scenario, global demand for critical minerals will grow 3.5 times by 2030.

On lithium, the IEA forecasts supply to reach 420,000 mt by 2030, just shy of the roughly 443,000 mt needed to meet government pledges, but well below the 702,000 mt needed for net-zero emissions.

If all planned critical mineral projects around the world come to fruition, there will be enough supply to support national climate commitments announced by governments, the IEA analyzed.

But while the supply situation is improving, the IEA believes that project delays and cost overruns will pose risks to the optimistic outlook, and more investment in mining projects will still be needed to achieve the global 2050 "carbon neutral" goal.

The IEA also mentioned that it is necessary to diversify supply sources and get rid of the current concentration of a few countries. Congo occupies a dominant position in cobalt supply. Half of the (global) planned lithium chemical plants are in China. Nearly 90% of the planned nickel smelting factories are in Indonesia.