Critical Minerals Market Review 2023

This report analyses the critical minerals market's impact on clean energy technologies and the need for secure and sustainable supplies. It covers rising demand, policy interventions, investment trends, and challenges in diversifying supply sources. An international summit on critical minerals is announced to promote collaboration in securing these essential resources.
The energy sector has been a key driver behind the soaring demand for critical minerals. Between 2017 and 2022, demand for lithium tripled, cobalt saw a 70% jump in demand, and nickel experienced a 40% rise. Notably, in 2022, clean energy applications accounted for 56% of total demand for lithium, 40% for cobalt, and 16% for nickel, compared to much lower shares five years ago.

Line graphs show price trends for Lithium, Nickel, Cobalt, and Copper from 2016 to 2023. After sharp rises in 2021-2022, prices decreased in 2023 but remain above historical averages. Data ranges are shaded, with lines for 2021 (purple), 2022 (orange), and 2023 (yellow).
Critical Minerals Market Review 2023 | The IEA

Mineral supplies impact the affordability of energy transitions

The market size of energy transition minerals has doubled in the past five years, reaching USD 320 billion in 2022. This expansion brings forth new revenue opportunities and job creation, while also aiding in the diversification of coal-dependent economies.

However, the affordability and pace of energy transitions are being significantly influenced by the availability and price volatility of critical minerals. Prices of many critical minerals surged in 2021 and early 2022. Although prices began to stabilize in the latter half of 2022 and into 2023, they remain well above historical averages. Such price dynamics underscore the importance of material costs in transforming energy systems.

A bar chart displaying capital expenditure on nonferrous metal production by major mining companies from 2010 to 2022. The chart is categorized by three groups: Lithium specialists, Focused players, and Diversified majors. Each group is color-coded.
Critical Minerals Market Review 2023 | The IEA

Securing sustainable mineral supplies

To ensure secure and sustainable mineral supplies, many countries are implementing policies and initiatives to diversify their sources. The IEA Critical Minerals Policy Tracker identifies nearly 200 policies and regulations globally, with over 100 enacted in recent years. However, some interventions have included restrictions on import or export, leading to a fivefold increase in export restrictions on critical raw materials since 2009.

Meeting demand

To meet the surging demand, investment in critical minerals development has significantly increased. Mining companies specializing in lithium, copper, and nickel recorded notable growth in capital expenditure, with Chinese companies doubling their investment spending in 2022.

In the venture capital sector, critical minerals start-ups raised a record USD 1.6 billion in 2022, reflecting a 160% year-on-year increase. Battery recycling, lithium extraction, and refining technologies attracted the largest share of VC funding, with companies based in the United States leading the way.

A changing battery sector

The battery sector is experiencing transformative changes with new technology options emerging. Global battery demand for clean energy applications surged by two-thirds in 2022, with energy storage becoming an increasingly significant portion of the total demand. Demand for batteries in vehicles outpaced the growth rate of electric car sales as average battery sizes for EVs increased in major markets.

To secure mineral supplies, automakers, battery cell makers, and equipment manufacturers are directly investing in the critical minerals value chain. Long-term offtake agreements and direct investments in mining, refining, and precursor materials have become common practices.

A chart shows global battery demand for clean energy applications from 2016 to 2022. Two bar graphs depict this data by segment (LDVs, buses, other transport, energy storage) and by region. Demand increases notably in 2022, driven by transport and energy storage.
Critical Minerals Market Review 2023 | The IEA

Navigating the complexities of the critical minerals landscape

In conclusion, the rapid growth of clean energy technologies has fueled unprecedented demand for critical minerals, with the energy sector being a major driver. Ensuring a secure and sustainable supply of critical minerals necessitates addressing supply-side challenges, promoting investment and responsible practices, and fostering international collaboration. By working together, countries and stakeholders can successfully navigate the complexities of the critical minerals landscape and enable a smooth and sustainable energy transition.

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Published by: IEA | June 11, 2022