The Role of Critical
Minerals in Clean Energy
Transitions

World Energy Outlook Special ReportINTERNATIONAL ENERGY AGENCY
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corrections

Foreword

The Role of Critical Minerals in Clean Energy Transitions

ForewordEver since the International Energy Agency (IEA) was founded in1974 in the wake of severe disruptions to global oil markets thatshook the world economy, its core mission has been to foster secureworld to anticipate and navigate possible disruptions and avoid
damaging outcomes for our economies and our planet.
This special report is the most comprehensive global study of thissubject to date, underscoring the IEA’s commitment to ensuring
energy systems remain as resilient, secure and sustainable aspossible. Building on the IEA’s detailed, technology-rich energy
modelling tools, we have established a unique and extensive
database that underpins our projections of the world’s future mineral
requirements under different climate and technology scenarios.

and affordable energy supplies.
Today, the global energy system is in the midst of a major transition
to clean energy. The efforts of an ever-expanding number ofcountries and companies to reduce their greenhouse gas emissions
to net zero call for the massive deployment of a wide range of clean
energy technologies, many of which in turn rely on critical mineralssuch as copper, lithium, nickel, cobalt and rare earth elements.

This is what energy security looks like in the 21st century. We must
pay close attention to all potential vulnerabilities, as the IEA did in ourrecent series on electricity security for power systems, which covered

An evolving energy system calls for an evolving approach to energy
security. As clean energy transitions accelerate globally and solar
panels, wind turbines and electric cars are deployed on a growing
scale, these rapidly growing markets for key minerals could be
subject to price volatility, geopolitical influence and even disruptions

challenges such as growing shares of variable renewables, climate
resilience and cyber security.

This World Energy Outlook special report on The Role of Critical
Minerals in Clean Energy Transitions identifies risks to key minerals

Today’s supply and investment plans for many critical minerals fall
well short of what is needed to support an accelerated deployment ofsolar panels, wind turbines and electric vehicles. Many minerals
come from a small number of producers. For example, in the cases

and metals that – left unaddressed – could make global progress
towards a clean energy future slower or more costly, and therefore
hamper international efforts to tackle climate change. The IEA isdetermined to play a leading role in enabling governments around theof lithium, cobalt and rare earth elements, the world’s top three
producers control well over three-quarters of global output. This highgeographical concentration, the long lead times to bring new mineralproduction on stream, the declining resource quality in some areas,

to supply.

PAGE | 1

Foreword

The Role of Critical Minerals in Clean Energy Transitionsand various environmental and social impacts all raise concerns
around reliable and sustainable supplies of minerals to support theenergy transition.

There is no shortage of resources worldwide, and there are sizeable
opportunities for those who can produce minerals in a sustainable
and responsible manner. Because no single country will be able tosolve these issues alone, strengthened international cooperation isessential. Leveraging the IEA’s long-standing leadership in
safeguarding energy security, we remain committed to helping
governments, producers and consumers tackle these criticalchallenges.

These hazards are real, but they are surmountable. The response
from policy makers and companies will determine whether criticalminerals remain a vital enabler for clean energy transitions or
become a bottleneck in the process.
Based on this special report, we identify the IEA’s six key
recommendations to ensure mineral security. An essential step is forpolicy makers to provide clear signals about their climate ambitions
and how their targets will be turned into action. Long-term visibility isessential to provide the confidence investors need to commit to new
projects. Efforts to scale up investment should go hand-in-hand witha broad strategy that encompasses technology innovation, recycling,
supply chain resilience and sustainability standards.

Finally, I would like to thank the excellent team behind this groundbreaking report, led by Tae-Yoon Kim under the direction of
Tim Gould, for their work in producing analysis of such high quality,
and many other colleagues from across the Agency who brought theirexpertise to bear on this crucial topic.
Dr. Fatih Birol
Executive Director
International Energy Agency

PAGE | 2

Table of Contents

The Role of Critical Minerals in Clean Energy Transitions

Table of Contents
Executive summary ........................................................................................ 4
Introduction................................................................................................... 19
The state of play ........................................................................................... 23
Mineral requirements for clean energy transitions ....................................... 42
Low-carbon power generation .................................................................. 54
Electricity networks ................................................................................... 75
Electric vehicles and battery storage ....................................................... 83
Hydrogen ................................................................................................ 109
Reliable supply of minerals ........................................................................ 116
Supply prospects for the focus minerals ................................................ 132
Approaches to ensure reliable mineral supply ....................................... 157
Focus on recycling ................................................................................. 175
Sustainable and responsible development of minerals ............................. 191
Mineral development and climate change .............................................. 193
Sustainable minerals development ........................................................ 208
Responsible minerals development ....................................................... 225
International co-ordination ...................................................................... 239
Annexes ..................................................................................................... 246

PAGE | 3

Executive summary

The Role of Critical Minerals in Clean Energy Transitions

Executive summary

PAGE | 4

Executive summary

The Role of Critical Minerals in Clean Energy Transitions

In the transition to clean energy, critical minerals bring new challenges to energy security
An energy system powered by clean energy technologies differs
profoundly from one fuelled by traditional hydrocarbon resources.
Building solar photovoltaic (PV) plants, wind farms and electricvehicles (EVs) generally requires more minerals than their fossil fuelbased counterparts. A typical electric car requires six times themineral inputs of a conventional car, and an onshore wind plantrequires nine times more mineral resources than a gas-fired power
plant. Since 2010, the average amount of minerals needed for a newunit of power generation capacity has increased by 50% as the shareof renewables has risen.

In a scenario that meets the Paris Agreement goals, clean energy
technologies’ share of total demand rises significantly over the next
two decades to over 40% for copper and rare earth elements, 6070% for nickel and cobalt, and almost 90% for lithium. EVs andbattery storage have already displaced consumer electronics tobecome the largest consumer of lithium and are set to take over fromstainless steel as the largest end user of nickel by 2040.
As countries accelerate their efforts to reduce emissions, they alsoneed to make sure their energy systems remain resilient and secure.
Today’s international energy security mechanisms are designed toprovide insurance against the risks of disruptions or price spikes insupplies of hydrocarbons, particularly oil. Minerals offer a different
and distinct set of challenges, but their rising importance in a

The types of mineral resources used vary by technology. Lithium,nickel, cobalt, manganese and graphite are crucial to battery
performance, longevity and energy density. Rare earth elements are
essential for permanent magnets that are vital for wind turbines and
EV motors. Electricity networks need a huge amount of copper andaluminium, with copper being a cornerstone for all electricity-related
technologies.

decarbonising energy system requires energy policy makers to
expand their horizons and consider potential new vulnerabilities.
Concerns about price volatility and security of supply do notdisappear in an electrified, renewables-rich energy system.

The shift to a clean energy system is set to drive a huge increase in
the requirements for these minerals, meaning that the energy
sector is emerging as a major force in mineral markets. Until themid-2010s, the energy sector represented a small part of total
demand for most minerals. However, as energy transitions gather
pace, clean energy technologies are becoming the fastest-growing
segment of demand.

This is why the IEA is paying close attention to the issue of criticalminerals and their role in clean energy transitions. This report reflects
the IEA’s determination to stay ahead of the curve on all aspects ofenergy security in a fast-evolving energy world.

PAGE | 5

Executive summary

The Role of Critical Minerals in Clean Energy Transitions

The rapid deployment of clean energy technologies as part of energy transitions implies asignificant increase in demand for minerals
Minerals used in selected clean energy technologies
CopperTransport (kg/vehicle)

Lithium

Electric car

NickelConventional car
50

100

150

200

250

Power generation (kg/MW)

Manganese
CobaltGraphite

Offshore wind

ChromiumOnshore wind

Molybdenum

Solar PV

Zinc

NuclearRare earths

Coal

SiliconNatural gas

Others
4 000

8 000

12 000

16 000

20 000
IEA. All rights reserved.

Notes: kg = kilogramme; MW = megawatt. Steel and aluminium not included. See Chapter 1 and Annex for details on the assumptions and methodologies.

PAGE | 6

Executive summary

The Role of Critical Minerals in Clean Energy Transitions

The energy sector becomes a leading consumer of minerals as energy transitions accelerate
Share of clean energy technologies in total demand for selected minerals
100%

80%

60%

40%

20%

2010 2020 2040 2040 2010 2020 2040 2040 2010 2020 2040 2040 2010 2020 2040 2040 2010 2020 2040 2040
STEPS SDS
Lithium

STEPS SDS
CobaltSTEPS SDS
NickelSTEPS SDS
CopperSTEPS SDS
Rare earth elements
IEA. All rights reserved.

Notes: Demand from other sectors was assessed using historical consumption, relevant activity drivers and the derived material intensity. Neodymium demand isused as indicative for rare earth elements. STEPS = Stated Policies Scenario, an indication of where the energy system is heading based on a sector-by-sector
analysis of today’s policies and policy announcements; SDS = Sustainable Development Scenario, indicating what would be required in a trajectory consistent withmeeting the Paris Agreement goals.

PAGE | 7

Executive summary

The Role of Critical Minerals in Clean Energy Transitions

Clean energy transitions will have far-reaching consequences for metals and mining
Our bottom-up assessment suggests that a concerted effort to reachthe goals of the Paris Agreement (climate stabilisation at “well below
2°C global temperature rise”, as in the IEA Sustainable Development
Scenario [SDS]) would mean a quadrupling of mineral requirements
for clean energy technologies by 2040. An even faster transition, to
hit net-zero globally by 2050, would require six times more mineral

growth in demand for nickel and zirconium for electrolysers, and forplatinum-group metals for fuel cells.
Demand trajectories are subject to large technology and policy
uncertainties. We analysed 11 alternative cases to understand theimpacts. For example, cobalt demand could be anything from 6 to 30
times higher than today’s levels depending on assumptions about theevolution of battery chemistry and climate policies. Likewise rareearth elements may see three to seven times higher demand in 2040
than today, depending on the choice of wind turbines and the strength

inputs in 2040 than today.
Which sectors do these increases come from? In climate-driven
scenarios, mineral demand for use in EVs and battery storage is amajor force, growing at least thirty times to 2040. Lithium sees thefastest growth, with demand growing by over 40 times in the SDS by
2040, followed by graphite, cobalt and nickel (around 20-25 times).
The expansion of electricity networks means that copper demand forof policy support. The largest source of demand variability comesfrom uncertainty around the stringency of climate policies. The big
question for suppliers is whether the world is really heading for a
scenario consistent with the Paris Agreement. Policy makers have a
crucial role in narrowing this uncertainty by making clear theirambitions and turning targets into actions. This will be vital to reduceinvestment risks and ensure adequate flow of capital to new projects.

power lines more than doubles over the same period.
The rise of low-carbon power generation to meet climate goals alsomeans a tripling of mineral demand from this sector by 2040. Windtakes the lead, bolstered by material-intensive offshore wind. Solar
PV follows closely, due to the sheer volume of capacity that is added.
Hydropower, biomass and nuclear make only minor contributions
given their comparatively low mineral requirements. In other sectors,
the rapid growth of hydrogen as an energy carrier underpins major

Clean energy transitions offer opportunities and challenges forcompanies that produce minerals. Today revenue from coalproduction is ten times larger than those from energy transition
minerals. However, there is a rapid reversal of fortunes in a climatedriven scenario, as the combined revenues from energy transition
minerals overtake those from coal well before 2040.

PAGE | 8

Executive summary

The Role of Critical Minerals in Clean Energy Transitions

Mineral demand for clean energy technologies would rise by at least four times by 2040 to meetclimate goals, with particularly high growth for EV-related minerals
Mineral demand for clean energy technologies by scenario
Growth of selected minerals in the SDS, 2040 relative to 2020

50

Hydrogen

6x
40Electricity networks

30

Index (2020 = 1)

Mt

Growth to 2040 by sector

EVs and battery
storage

4x

42
40

30
25

Other low-carbon
power generation

20

50

21
20

19

Wind

10

10

7

Solar PV
2020

SDS

Net-zeroby 2050
scenario

Lithium

Graphite

CobaltNickelRare earths

IEA. All rights reserved.
Notes: Mt = million tonnes. Includes all minerals in the scope of this report, but does not include steel and aluminium. See Annex for a full list of minerals.

PAGE | 9

Executive summary

The Role of Critical Minerals in Clean Energy Transitions

Changing fortunes: Coal vs energy transition minerals

USD billion (2019)

Revenue from production of coal and selected energy transition minerals in the SDS
500

Rare earths
Silicon400

Manganese
300

Graphite
Cobalt200

Nickel100

Lithium
CopperCoal

Energy transition
minerals
2020

Coal

Energy transition
minerals
2030

Coal

Energy transition
minerals
2040
IEA. All rights reserved.

Notes: Revenue for energy transition minerals includes only the volume required in clean energy technologies, not total demand. Future prices for coal are projectedequilibrium prices in WEO 2020 SDS. Prices for energy transition minerals are based on conservative assumptions about future price trends (moderate growth ofaround 10-20% from today’s levels).

PAGE | 10

Executive summary

The Role of Critical Minerals in Clean Energy Transitions

Today’s mineral supply and investment plans fall short of what is needed to transform theenergy sector, raising the risk of delayed or more expensive energy transitions
The prospect of a rapid increase in demand for critical minerals – well
above anything seen previously in most cases – raises hugequestions about the availability and reliability of supply. In the past,strains on the supply-demand balance for different minerals haveprompted additional investment and measures to moderate or
substitute demand. But these responses have come with time lags

total grid investment costs. Higher prices as a result of tight supply
could have a major impact on the level of grid investment.
Our analysis of the near-term outlook for supply presents a mixed
picture. Some minerals such as mined lithium and cobalt are
expected to be in surplus in the near term, while lithium chemical
products, battery-grade nickel and key rare earth elements (e.g.
neodymium and dysprosium) might face tight supply in the years
ahead. However, looking further ahead in a scenario consistent withclimate goals, expected supply from existing mines and projects
under construction is estimated to meet only half of projected lithiumand cobalt requirements and 80% of copper needs by 2030.

and have been accompanied by considerable price volatility. Similar
episodes in the future could delay clean energy transitions and push
up their cost. Given the urgency of reducing emissions, this is apossibility that the world can ill afford.
Raw materials are a significant element in the cost structure of manytechnologies required in energy transitions. In the case of lithium-ion
batteries, technology learning and economies of scale have pushed
down overall costs by 90% over the past decade. However, this alsomeans that raw material costs now loom larger, accounting for some
50-70% of total battery costs, up from 40-50% five years ago. Higher
mineral prices could therefore have a significant effect: a doubling oflithium or nickel prices would induce a 6% increase in battery costs.
If both lithium and nickel prices were to double at the same time, thiswould offset all the anticipated unit cost reductions associated with adoubling of battery production capacity. In the case of electricity
networks, copper and aluminium currently represent around 20% ofToday’s supply and investment plans are geared to a world of more
gradual, insufficient action on climate change (the STEPS trajectory).
They are not ready to support accelerated energy transitions. While
there are a host of projects at varying stages of development, there
are many vulnerabilities that may increase the possibility ofmarket tightness and greater price volatility:•

PAGE | 11

High geographical concentration of production: Production ofmany energy transition minerals is more concentrated than thatof oil or natural gas. For lithium, cobalt and rare earth elements,
the world’s top three producing nations control well over three-Executive summary

The Role of Critical Minerals in Clean Energy Transitions

quarters of global output. In some cases, a single country is
responsible for around half of worldwide production. The
Democratic Republic of the Congo (DRC) and People’s
Republic of China (China) were responsible for some 70% and
60% of global production of cobalt and rare earth elements
respectively in 2019. The level of concentration is even higher
for processing operations, where China has a strong presence
across the board. China’s share of refining is around 35% for
nickel, 50-70% for lithium and cobalt, and nearly 90% for rare earth
elements. Chinese companies have also made substantial
investment in overseas assets in Australia, Chile, the DRC andIndonesia. High levels of concentration, compounded bycomplex supply chains, increase the risks that could arise fromphysical disruption, trade restrictions or other developments inmajor producing countries.
•

15 years. Extracting metal content from lower-grade ores requires
more energy, exerting upward pressure on production costs,
greenhouse gas emissions and waste volumes.
•

variety of environmental and social issues that, if poorly managed,
can harm local communities and disrupt supply. Consumers andinvestors are increasingly calling for companies to sourceminerals that are sustainably and responsibly produced. Without
broad and sustained efforts to improve environmental and social
performance, it may be challenging for consumers to exclude
minerals produced with poor standards as higher-performing
supply chains may not be sufficient to meet demand.
•

Long project development lead times: Our analysis suggeststhat it has taken on average over 16 years to move mining
projects from discovery to first production. These long lead times
raise questions about the ability of suppliers to ramp up output if
demand were to pick up rapidly. If companies wait for deficits toemerge before committing to new projects, this could lead to a
prolonged period of market tightness and price volatility.

•

Growing scrutiny of environmental and social performance:
Production and processing of mineral resources gives rise to a

Higher exposure to climate risks: Mining assets are exposed
to growing climate risks. Copper and lithium are particularly
vulnerable to water stress given their high water requirements.
Over 50% of today’s lithium and copper production isconcentrated in areas with high water stress levels. Several major
producing regions such as Australia, China, and Africa are also
subject to extreme heat or flooding, which pose greater
challenges in ensuring reliable and sustainable supplies.

Declining resource quality: Concerns about resources relate toquality rather than quantity. In recent years, ore quality has
continued to fall across a range of commodities. For example, theaverage copper ore grade in Chile declined by 30% over the past

These risks to the reliability, affordability and sustainability of mineral
supply are manageable, but they are real. How policy makers andcompanies respond will determine whether critical minerals are a vital
enabler for clean energy transitions, or a bottleneck in the process.
PAGE | 12

Executive summary

The Role of Critical Minerals in Clean Energy Transitions

Production of many energy transition minerals today is more geographically concentrated thanthat of oil or natural gas
Share of top three producing countries in production of selected minerals and fossil fuels, 2019

US

Natural gas

USFossil fuels

Oil

Processing
Oil refiningUS

LNG export

Qatar

CopperChile

CopperChina

NickelIndonesia

NickelChina

CobaltDRC

Rare earths
Lithium
0%

Minerals

Minerals

Fossil fuels

Extraction

Cobalt

China

China

Lithium

China

Australia

Rare earths

20%

40%

60%

80%

100%

0%

China

20%

40%

60%

80%

100%

Qatar
Indonesia
DRC
Philippines
China
US
Saudi Arabia
RussiaIranAustralia
Chile
Japan
Myanmar
Peru
Finland
Belgium
Argentina
Malaysia
Estonia
IEA. All rights reserved.

Notes: LNG = liquefied natural gas; US = United States. The values for copper processing are for refining operations.
Sources: IEA (2020a); USGS (2021), World Bureau of Metal Statistics (2020); Adamas Intelligence (2020).

PAGE | 13

Executive summary

The Role of Critical Minerals in Clean Energy Transitions

New and more diversified supply sources will be vital to pave the way to a clean energy future
As energy transitions gather pace, security of mineral supply is
gaining prominence in the energy security debate, a realm where oil
has traditionally occupied a central role.

projects: the most important is to provide clear and strong signals
about energy transitions. If companies do not have confidence incountries’ energy and climate policies, they are likely to makeinvestment decisions based on much more conservative
expectations. Given the long lead times for new project
developments, this could create bottlenecks when deployment ofclean energy technologies starts to grow rapidly. Diversification of

There are significant differences between oil security and mineralsecurity, notably in the impacts that any disruption may have. In theevent of an oil supply crisis, all consumers driving gasoline cars ordiesel trucks are affected by higher prices. By contrast, a shortage or
spike in the price of a mineral affects only the supply of new EVs or
solar plants. Consumers driving existing EVs or using solar-powered

supply is also crucial; resource-owning governments can support
new project development by reinforcing national geological surveys,
streamlining permitting procedures to shorten lead times, providing
financing support to de-risk projects, and raising public awareness ofthe contribution that such projects play in the transformation of theenergy sector.

electricity are not affected. In addition, the combustion of oil meansthat new supply is essential to the continuous operation of oil-using
assets. However, minerals are a component of infrastructure, with thepotential to be recovered and recycled.

Reducing material intensity and encouraging material substitution via
technology innovation can also play major roles in alleviating strains
on supply, while also reducing costs. For example, 40-50%
reductions in the use of silver and silicon in solar cells over the past
decade have enabled a spectacular rise in solar PV deployment.
Innovation in production technologies can also unlock sizeable new
supplies. Emerging technologies, such as direct lithium extraction orenhanced metal recovery from waste streams or low-grade ores,

Nonetheless, experience from oil markets may offer some valuablelessons for an approach to mineral security, in particular tounderscore that supply-side measures need to be accompanied bywide-ranging efforts encompassing demand, technology, supply
chain resilience and sustainability.
Rapid, orderly energy transitions require strong growth in investment
in mineral supplies to keep up with the pace of demand growth. Policy
makers can take a variety of actions to encourage new supply

offer the potential for a step change in future supply volumes.

PAGE | 14

Executive summary

The Role of Critical Minerals in Clean Energy Transitions

A strong focus on recycling, supply chain resilience and sustainability will be essential
Establishing reliable price benchmarks will be a crucial step towards
enhancing transparency and supporting market development.

Recycling relieves the pressure on primary supply. For bulk metals,
recycling practices are well established, but this is not yet the casefor many energy transition metals such as lithium and rare earth
elements. Emerging waste streams from clean energy technologies(e.g. batteries and wind turbines) can change this picture. The
amount of spent EV batteries reaching the end of their first life isexpected to surge after 2030, at a time when mineral demand is set
to still be growing rapidly. Recycling would not eliminate the need forcontinued investment in new supplies. But we estimate that by 2040,
recycled quantities of copper, lithium, nickel and cobalt from spentbatteries could reduce combined primary supply requirements forthese minerals by around 10%. The security benefits of recycling can
be far greater for regions with wider deployment of clean energy
technologies due to greater economies of scale.

Tackling the environmental and social impacts of mineraldevelopments will be essential, including the emissions associatedwith mining and processing, risks arising from inadequate waste andwater management, and impacts from inadequate worker safety,
human rights abuses (such as child labour) and corruption. Ensuringthat mineral wealth brings real gains to local communities is a broad
and multi-faceted challenge, particularly in countries where artisanaland small-scale mines are common. Supply chain due diligence, witheffective regulatory enforcement, can be a critical tool to identify,
assess and mitigate risks, increasing traceability and transparency.
Emissions along the mineral supply chain do not negate the clear
climate advantages of clean energy technologies. Total lifecycle
greenhouse gas emissions of EVs are around half those of internal
combustion engine cars on average, with the potential for a further
25% reduction with low-carbon electricity. While energy transition
minerals have relatively high emission intensities, a large variation in
the emissions footprint of different producers suggests that there areways to minimise these emissions through fuel switching, low-carbon
electricity and efficiency improvements. Integrating environmental
concerns in the early stages of project planning can help ensuresustainable practices throughout the project life cycle.

Regular market assessments and periodic stress tests, coupled withemergency response exercises (along the lines of the IEA’s existing
emergency response programmes), can help policy makers identify
possible weak points, evaluate potential impacts and devise
necessary actions. Voluntary strategic stockpiling can in some cases
help countries weather short-term supply disruptions. Suchprogrammes need to be carefully designed, and based on a detailed
review of potential vulnerabilities. Some minerals with smallermarkets have low pricing transparency and liquidity, making it difficult
to manage price risks and affecting investment decisions.
PAGE | 15

Executive summary

The Role of Critical Minerals in Clean Energy Transitions

The projected surge in spent battery volumes suggests immense scope for recycling
Amount of spent lithium-ion batteries from EVs and storage and recycled and reused minerals from batteries in the SDS
Recycled and reused volume

1 500

kt

GWh

Amount of spent batteries
1 500

15%
CobaltEnergy storage
1 200

1 200

12%

900

9%

Electric trucks
900

Electric buses

NickelLithium
Copper

600

300

2020

2025

2030

2035

Electric two- andthree-wheelers

600

Electric cars

300

6%

3%

2030

2040

Share oftotal demand(right axis)

2040
IEA. All rights reserved.

Note: GWh = gigawatt hour.

PAGE | 16

Executive summary

The Role of Critical Minerals in Clean Energy Transitions

Stronger actions are required to counter the upward pressure on emissions from mineralproduction, but the climate advantages of clean energy technologies remain clear
Life-cycle GHG emissions of a BEV and ICE vehicle

20
Processing

tCO₂-eq per vehicle lifetime

tCO₂-eq per tonne of metal

Average GHG emissions intensity for productionof selected commodities
Mining15

10

5

Iron and
steel

Zinc

Refined Lithium Class 1 Aluminium Cobalt
copper carbonate nickel
sulfate50

Fuel cycle(well-to-wheel)

40

Electricity

30

Batteries - minerals

20

Batteries - assemblyand other

10

Vehiclemanufacturing

Base

High-GHG
minerals
BEV

ICE

IEA. All rights reserved.
Notes: BEV = battery electric vehicle; ICE = internal combustion engine. The “High-GHG minerals” case assumes double the GHG emissions intensity for battery
minerals. Includes both Scope 1 and 2 emissions of all GHG from primary production. See Chapter 4 for more detailed assumptions.
Source: IEA analysis based on IEA (2020a); IEA (2020b); Kelly et al. (2020); Argonne National Laboratory (2020); Argonne National Laboratory (2019); Rio Tinto(2020); S&P Global (2021); Skarn Associates (2021); Marx et al. (2018).

PAGE | 17

Executive summary

The Role of Critical Minerals in Clean Energy Transitions

IEA’s six key recommendations for a new, comprehensive approach to mineral security
1. Ensure adequate investment in diversified sources of new
supply. Strong signals from policy makers about the speed ofenergy transitions and the growth trajectories of key clean energy
technologies are critical to bring forward timely investment in new
supply. Governments can play a major role in creating conditions
conducive to diversified investment in the mineral supply chain.

market transparency. Measures can include regular market
assessments and stress tests, as well as voluntary strategic
stockpiles in some instances.
5. Mainstream higher environmental, social and governancestandards. Efforts to incentivise higher environmental and social

2. Promote technology innovation at all points along the value
chain. Stepping up R&D efforts for technology innovation on both
the demand and production sides can enable more efficient use
of materials, allow material substitution and unlock sizeable new
supplies, thereby bringing substantial environmental and security
benefits.
3. Scale up recycling. Policies can play a pivotal role in preparing
for rapid growth of waste volumes by incentivising recycling for
products reaching the end of their operating lives, supporting
efficient collection and sorting activities and funding R&D into newrecycling technologies.

performance can increase sustainably and responsibly produced
volumes and lower the cost of sourcing them. If industry playerswith strong environmental and social standards are rewarded in
the marketplace, this can also bring new suppliers to a morediversified market.
6. Strengthen international collaboration between producers
and consumers. An overarching international framework for
dialogue and policy co-ordination among producers andconsumers can play a vital role, an area where the IEA’s energy
security framework could usefully be leveraged. Such an initiative
could include actions to (i) provide reliable and transparent data;(ii) conduct regular assessments of potential vulnerabilities ofsupply chains and potential collective responses; (iii) promoteknowledge transfer and capacity building to spread sustainable
and responsible development practices; and (iv) strengthen
environmental and social performance standards to ensure alevel playing field.

4. Enhance supply chain resilience and market transparency.
Policy makers need to explore a range of measures to improve
the resilience of supply chains for different minerals, develop
response capabilities to potential supply disruptions and enhance

PAGE | 18

Introduction

The Role of Critical Minerals in Clean Energy Transitions

Introduction

PAGE | 19

Introduction

The Role of Critical Minerals in Clean Energy Transitions

Introduction
Clean energy transitions gained momentum in 2020, despite themajor economic and social disruptions caused by the pandemic.
Renewable electricity defied the Covid-19 crisis with record growth,and capacity additions are on course to reach fresh heights in the
coming years (IEA, 2020). Electric car sales also charged ahead, witha remarkable 40% increase in 2020 amid a sluggish global market(IEA, 2021). Dozens of countries and many leading companies haveannounced plans to bring their emissions down to net zero by aroundthe middle of this century.

minerals; assess the mineral requirements under varying energy andtechnology scenarios; and identify the security, environmental andsocial implications of minerals supply for the energy transition. The
report reflects the IEA’s determination to ensure it stays ahead of thecurve on all aspects of energy security in a decarbonising world.

The growing momentum behind clean energy transitions focuses
attention on the importance of clean energy supply chains, and theadequate supply of minerals in particular. Minerals have played a vitalrole in the rise of many of the clean energy technologies that are
widely used today – from solar panels and wind turbines to electricity
networks and electric vehicles. But ensuring that these and othertechnologies can continue to draw on sufficient mineral supplies, andtherefore support the acceleration of energy transitions, is a major

access to modern energy. The SDS relies on countries andcompanies hitting their announced net-zero emissions targets(mostly by 2050) on time and in full, which spurs the world as a whole
to reach it before 2070. The range of technologies that are requiredin the SDS provides an essential benchmark for our discussion
throughout the report. Reaching net-zero emissions globally by 2050
would demand a dramatic extra push for the deployment of various
clean energy technologies.

Our analysis is based on two main IEA scenarios, drawn from WEO2020. The Sustainable Development Scenario (SDS) charts apathway that meets in full the world’s goals to tackle climate change
in line with the Paris Agreement, improve air quality and provide

challenge. Debates around energy security have traditionally been
associated with oil and natural gas supplies, and more recently alsowith electricity, but as energy transitions gather pace policy makers
need to expand their horizons to include new potential hazards.

The other scenario we refer to in the analysis is the Stated Policies
Scenario (STEPS), which provides an indication of where today’s
policy measures and plans might lead the energy sector. These
outcomes fall far short of the world’s shared sustainability goals.
Comparison between the outcomes in these two scenarios provides
an indication of the range of possible futures.

With this World Energy Outlook (WEO) special report, we aim to:
explain the complex links between clean energy technologies and
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Introduction

The Role of Critical Minerals in Clean Energy Transitions

Scope
This report assesses the mineral requirements for a range of clean
energy technologies, including renewable power (solar photovoltaic[PV], onshore and offshore wind, concentrating solar power, hydro,
geothermal and biomass), nuclear power, electricity networks(transmission and distribution), electric vehicles, battery storage andhydrogen (electrolysers and fuel cells). Although this is not an
exhaustive list of clean energy technologies, the technologies wecover represent the majority deployed in the SDS. We plan to expand
the analysis to other technologies in future publications.

temperatures. Catalytic converters use platinum or palladium to help
reduce harmful emissions from engines using petroleum. However,here we focus specifically on the use of minerals in clean energy
technologies, given that they generally require considerably moreminerals than fossil fuel counterparts. Our analysis also focuses on
the requirements for building a plant (or making equipment) and noton operational requirements (e.g. uranium consumption in nuclear
plants).
Our report considers a wide range of minerals used in clean energy
technologies, as indicated in the Annex. They include chromium,copper, major battery metals (lithium, nickel, cobalt, manganese andgraphite), molybdenum, platinum group metals, zinc, rare earth
elements and others. Steel is widely used across a broad range oftechnologies, but we have excluded it from the scope given that it
does not have substantial security implications and the energy sector
is not a major driver of growth in steel demand.

All these technologies require metals and alloys, which are produced
by processing mineral-containing ores. Ores – the raw, economically
viable rocks that are mined – are beneficiated to liberate andconcentrate the minerals of interest. Those minerals are further
processed to extract the metals or alloys of interest. Processed
metals and alloys are then used in end-use applications. While thisreport covers the entire mineral and metal value chain from mining toprocessing operations, we use “minerals” as a representative term

Aluminium also plays a crucial role in clean energy transitions, being
widely used in applications such as solar cells, wind turbines andvehicle lightweighting. We have excluded it from demand projections
as it is regularly assessed as part of the WEO and Energy
Technology Perspectives series. However, we have assessed its use
in electricity networks as the outlook for copper is inherently linked
with aluminium use in grid lines.

for the sake of simplicity.
Minerals are not only used in the clean energy sector, but are also
used widely across the entire energy system, in technologies that
improve efficiency and reduce emissions. For example, the mostefficient coal-fired power plants require a lot more nickel than theleast efficient ones in order to allow for higher combustion
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Introduction

The Role of Critical Minerals in Clean Energy Transitions

Structureshed light on specific vulnerabilities that could create pressures on

We have structured this report in four chapters, as follows:

future supply.

In Chapter 1 (The State of Play) we set out the linkages between
critical minerals and energy transitions, and the reasons why they arerising up the policy agenda. We provide an overview of today’s supply
chains and examines their geographical concentration and otherpotential bottlenecks. We also describe the industry landscape, andIn this chapter we also discuss the potential contribution of secondary
supply, especially via recycling. We assess how recycling could
contribute to reducing requirements for primary supply, taking into
account both conventional sources and emerging waste streams

recent investment and price dynamics.

such as spent batteries from electric vehicles.

In Chapter 2 (Mineral Requirements for Clean Energy
Technologies) we analyse a range of possible trajectories formineral requirements in various clean energy technologies. They
include low-carbon power generation, batteries for electric vehicles
and grid storage, electricity networks and hydrogen. We conducted
the assessments using the detailed technology projections in IEA
scenarios. We also address how and to what extent demand
trajectories could evolve in different directions under a number ofUsing our analysis and lessons from historical episodes of disruption,
we identify policy approaches to ensure reliable supply of minerals inan evolving market environment.
In Chapter 4 (Sustainable and Responsible Development ofMinerals) we examine the environmental, social and governanceimplications of minerals development which, if improperly managed,
could offset or negate their positive contributions to clean energy
technologies. We assess potential hazards, spanning from emissions
during production and processing, to inadequate waste and water
management and extending to local community impacts such as
corruption, human rights abuses and worker safety. We finallyalternative technology evolution pathways.
In Chapter 3 (Reliable Supply of Minerals) we assess theprospects for supply of the main focus minerals – copper, lithium,nickel, cobalt and rare earth elements – that play a particularly
important role in many clean energy technologies. We examine thecontributions from existing mines and those under construction, anddiscuss potential policy approaches to mitigate these risks.

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The state of play

The Role of Critical Minerals in Clean Energy Transitions

The state of play

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The state of play

The Role of Critical Minerals in Clean Energy Transitions

Clean energy technologies defied the Covid-19 crisis with strong growth, making 2020 a pivotal
year for clean energy transitions
Change in energy demand and car sales by type in 2020 relative to 2019
Energy demand

Car sales

5%

50%

0%

25%

-5%

0%

-10%

Total

Oil

Coal

Gas

NuclearModernrenewables-25%

Total cars

Electric cars
IEA. All rights reserved.

Sources: IEA (2020a) for energy demand; IEA (2021a) for car sales.

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The state of play

The Role of Critical Minerals in Clean Energy Transitions

But achieving climate goals requires a further rapid acceleration in clean energy deployment

3x

300

7 000
3x

6 000

250

5 000

200

4 000
3 000

100

2 000

50

1 000

Solar PV

2019

25x

70

50
40

150

2040
2040
(STEPS) (SDS)

80

60

3x

2019

Million350

Kilometres

GW

Annual deployment of clean energy technologies by scenario

2040
2040
(STEPS) (SDS)

30
20
10
2020

Wind

2040
2040
(STEPS) (SDS)Electricity networks

2020

2040
2040
(STEPS) (SDS)Electric car sales
IEA. All rights reserved.

Notes: PV = Photovoltaic; STEPS = Stated Policies Scenario; SDS = Sustainable Development Scenario.
Sources: IEA (2021a); IEA (2020a).

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The state of play

The Role of Critical Minerals in Clean Energy Transitions

The rapid deployment of these technologies as part of energy transitions implies a significant
increase in demand for minerals
Minerals used in selected clean energy technologies
CopperTransport (kg/vehicle)

Lithium

Electric car

NickelConventional car
50

100

150

200

250

Power generation (kg/MW)

Manganese
CobaltGraphite

Offshore wind

ChromiumOnshore wind

Molybdenum

Solar PV

Zinc

NuclearRare earths

Coal

SiliconNatural gas

Others
4 000

8 000

12 000

16 000

20 000
IEA. All rights reserved.

Notes: kg = kilogramme; MW = megawatt. The values for vehicles are for the entire vehicle including batteries, motors and glider. The intensities for an electric car
are based on a 75 kWh NMC (nickel manganese cobalt) 622 cathode and graphite-based anode. The values for offshore wind and onshore wind are based on the
direct-drive permanent magnet synchronous generator system (including array cables) and the doubly-fed induction generator system respectively. The values forcoal and natural gas are based on ultra-supercritical plants and combined-cycle gas turbines. Actual consumption can vary by project depending on technology
choice, project size and installation environment.
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The state of play

The Role of Critical Minerals in Clean Energy Transitions

The mineral requirement for new power generation capacity has increased by 50% since 2010
as low-carbon technologies take a growing share of investment

kg/MW

Average mineral intensity of new power generation capacity
8 000

80%

Average mineral intensity (left axis)
Others

6 000

60%

Rare earth elements
Manganese
Nickel4 000

40%

Chromium
Silicon

2 000

20%

Zinc
CopperShare of low-carbon in new power
generation capacity (right axis)

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019
IEA. All rights reserved.

Note: Low-carbon technologies include renewables and nuclear.

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The state of play

The Role of Critical Minerals in Clean Energy Transitions

The shift from a fuel-intensive to a material-intensive energy system
The Covid-19 pandemic and resulting economic crisis have had an
impact on almost every aspect of the global energy system. However,while fossil fuel consumption was hit hard in 2020, clean energy
technologies – most notably renewables and electric vehicles (EVs)– remained relatively resilient. As a result, our latest estimatessuggest that global energy-related CO2 emissions fell by 6% in 2020,
more than the 4% fall in energy demand (IEA, 2021b).

they generally require more materials than fossil fuel-based
counterparts for construction. Minerals are a case in point. A typicalelectric car requires six times the mineral inputs of a conventional car
and an onshore wind plant requires nine times more mineral
resources than a gas-fired plant of the same capacity. Since 2010 theaverage amount of minerals needed for a new unit of power
generation capacity has increased by 50% as renewables increase
their share of total capacity additions. The transition to clean energymeans a shift from a fuel-intensive to a material-intensive system.

Nonetheless, as things stand, the world is far from seeing a decisive
downturn in emissions – CO2 emissions in December 2020 werealready higher than their pre-crisis level one year earlier. Putting
emissions on a trajectory consistent with the Paris Agreement, as
analysed in the World Energy Outlook Sustainable Development
Scenario (SDS), requires a significant scale-up of clean energy
deployment across the board. In the SDS, the annual installation ofsolar PV cells, wind turbines and electricity networks needs to expand
threefold by 2040 from today’s levels, and sales of electric cars needto grow 25-fold over the same period. Reaching net-zero emissions
globally by 2050 would demand an even more dramatic increase in
the deployment of clean energy technologies over the same

The types of mineral resources used vary by technology. Lithium,cobalt and nickel play a central role in giving batteries greater
performance, longevity and higher energy density. Rare earth
elements are used to make powerful magnets that are vital for windturbines and EVs. Electricity networks need a huge amount of copperand aluminium. Hydrogen electrolysers and fuel cells require nickel
or platinum group metals depending on the technology type. Copper
is an essential element for almost all electricity-related technologies.
These characteristics of a clean energy system imply a significant
increase in demand for minerals as more batteries, solar panels, windturbines and networks are deployed. It also means that the energy
sector is set to emerge as a major force in driving demand growth formany minerals, highlighting the strengthening linkages between
minerals and clean energy technologies.

timeframe.
An energy system powered by clean energy technologies differs
profoundly from one fuelled by traditional hydrocarbon resources.
While solar PV plants and wind farms do not require fuels to operate,
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The state of play

The Role of Critical Minerals in Clean Energy Transitions

The transition to a clean energy system brings new energy trade patterns, countries andgeopolitical considerations into play
Indicative supply chains of oil and gas and selected clean energy technologies

IEA. All rights reserved.
Notes: DRC = Democratic Republic of the Congo; EU = European Union; US = United States; Russia = Russian Federation; China = People’s Republic of China.
Largest producers and consumers are noted in each case to provide an indication, rather than a complete account.

PAGE | 29.

The state of play

The Role of Critical Minerals in Clean Energy Transitions

Current production of many energy transition minerals is more geographically concentrated
than that of oil or natural gas

Fossil fuels

Share of top three producing countries in total production for selected minerals and fossil fuels, 2019
Oil

United States

Saudi Arabia

RussiaNatural gas

United States

RussiaIran

Copper

Chile

Peru

China

NickelIndonesia

Philippines

Minerals

CobaltDRC

Graphite

RussiaChina

Rare earths

United States

Australia

Platinum

Chile
South Africa

20%

Australia

Mozambique Brazil

China

Lithium

0%

RussiaMyanmar
China
Russia

40%

60%

80%

Zimbabwe
100%
IEA. All rights reserved.

Sources: IEA (2020b); USGS (2021).

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The state of play

The Role of Critical Minerals in Clean Energy Transitions

The level of concentration is similarly high for processing operations, with China’s significant
presence across the board
Share of processing volume by country for selected minerals, 2019

CopperChina

Lithium

NickelRest of world

Japan

China

China

CobaltChile

Indonesia

Argentina

Rest of world

Japan

China

Rare earth
elements0%

Chile

Finland

Belgium

China
20%

40%

Rest of world

Malaysia
60%

80%

100%
IEA. All rights reserved.

Note: The values for copper are for refining operations.
Sources: World Bureau of Metal Statistics (2020); Adamas Intelligence (2020) for rare earth elements.

PAGE | 31

The state of play

The Role of Critical Minerals in Clean Energy Transitions

Robust and resilient clean energy supply chains are essential, especially for critical minerals
Today’s international energy security mechanisms are designed toprovide some insurance against the risks of disruption, price spikes
and geopolitical events in the supply of hydrocarbons, oil in particular.
These concerns do not disappear during energy transitions as more
solar panels, wind turbines and electric cars are deployed. However,alongside the many benefits of clean energy transitions, they also
raise additional questions about the security and resilience of clean

2010s). The picture for copper and nickel is slightly more diverse, but
still around half of global supply is concentrated in the top three
producing countries.
The level of concentration is even higher for processing and refining
operations. China has gained a strong presence across the board.
China’s share of refining is around 35% for nickel (the figure becomes
higher when including the involvement of Chinese companies inIndonesian operations), 50-70% for lithium and cobalt, and as highas 90% for REE processing that converts mined output into oxides,

energy supply chains, which policy makers need to address.
Compared with fossil fuel supply, the supply chains for clean energy
technologies can be even more complex (and in many instances, lesstransparent). In addition, the supply chain for many clean energy
technologies and their raw materials is more geographicallyconcentrated than that of oil or natural gas. This is especially the casefor many of the minerals that are central to manufacturing clean
energy technology equipment and infrastructure.

metals and magnets.
This creates sources of concern for companies that produce solar
panels, wind turbines, electric motors and batteries using imported
minerals, as their supply chains can quickly be affected by regulatorychanges, trade restrictions or political instability in a small number ofcountries. The Covid-19 pandemic already demonstrated the ripple
effects that disruptions in one part of the supply chain can have on

For lithium, cobalt and rare earth elements (REEs), the top three
producing nations control well over three-quarters of global output. In
some cases, a single country is responsible for around half ofworldwide production. South Africa and the Democratic Republic of
the Congo are responsible for some 70% of global production ofplatinum and cobalt respectively, and China accounted for 60% of
global REE production in 2019 (albeit down from over 80% in the mid-

the supply of components and the completion of projects.
The implications of any potential supply disruptions are not as
widespread as those for oil and gas (see Box 1.1). Nonetheless, tradepatterns, producer country policies and geopolitical considerations
remain crucial even in an electrified, renewables-rich energy system.

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The state of play

The Role of Critical Minerals in Clean Energy Transitions

Box 1.1. Oil security vs mineral security
Minerals are increasingly recognised as essential to the goodfunctioning of an evolving energy system, moving into a realm
where oil has traditionally occupied a central role. There aresimilarities, in that threats to reliable supply can have far-reachingconsequences throughout the energy system. So traditional
concerns over oil security (e.g. unplanned supply disruption or pricespikes) are relevant for minerals as well.
However, fundamental differences exist in the impacts that
disruption may have. An oil supply crisis, when it happens, has
broad repercussions for all vehicles that run on it. Consumers
driving gasoline cars or diesel trucks are immediately affected byhigher prices.
By contrast, a shortage or spike in the price of a mineral requiredfor producing batteries and solar panels affects only the supply of
new EVs or solar plants. Consumers driving existing EVs or using
solar-powered electricity are not affected. The main threats fromsupply disruptions are delayed and more expensive energy
transitions, rather than disturbed daily lives.
Notably, oil burns up when it is used, requiring continuous inputs to
run assets. However, minerals are a component of infrastructure,with the potential to be recovered and recycled at the end of theinfrastructure lifetime (Hastings-Simon and Bazilian, 2020).

Moreover, while oil is a single commodity with a large, liquid global
market, there are multiple minerals now in play for the energy
sector, each with its own complexities and supply dynamics.
Individual countries may have very different positions in the value
chain for each of the minerals that are now rising in prominence inthe global energy debate.
Despite these differences, the experience of oil markets may offer anumber of lessons for an approach to mineral security. The
approach to safeguarding oil security tended to focus on supply-side
measures. Strategic stockholding has long been at the centre of the
IEA’s efforts to ensure oil market security. However, the frameworkfor oil security has evolved over time to encompass demand andresilience aspects, including efforts to identify immediate areas ofdemand restraint, improve fuel efficiency and review countries’
preparedness against potential disruption.
This range of responses and measures provides valuable context
for the discussion on minerals security. While supply-side measures(e.g. ensuring adequate investment in production) remain crucial,these need to be accompanied by efforts to promote more efficientuse of minerals, assess the resilience of supply chains, andencourage wider use of recycled materials, to be more effective.

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The state of play

The Role of Critical Minerals in Clean Energy Transitions

Today’s recycling rates vary by metal depending on the ease of collection, price levels andmarket maturity
End-of-life recycling rates for selected metals
100%

80%

60%

40%

20%
Less than < 1%Gold

Platinum/
Palladium

NickelSilverCopperAluminium Chromium

Precious metals

Zinc

CobaltLithium

REEs

Base metals
IEA. All rights reserved.

Sources: Henckens (2021); UNEP (2011) for aluminium; Sverdrup and Ragnarsdottir (2016) for platinum and palladium; OECD (2019) for nickel and cobalt.

PAGE | 34

The state of play

The Role of Critical Minerals in Clean Energy Transitions

Scaling up recycling can bring significant security benefits, although the need for continued
investment in primary supply remains
One of the major differences between oil and minerals lies in the waythat they are used and recovered in the energy system. Unlike oil,which is combusted on an ongoing basis, minerals and metals arepermanent materials that can be reused and recycled continuouslywith the right infrastructure and technologies in place. Compared withoil, this offers an additional lever to ensure reliable supplies ofmetals, as opposed to 18% in the rest of the world (Eurometaux,2019).
Recycling does not eliminate the need for continued investment inprimary supply of minerals. A World Bank study suggests that newinvestment in primary supply will still be needed even in the case thatEOL recycling rates were to reach 100% by 2050. (World Bank,
2020). However, recycling can play an important role in relieving theburden on primary supply from virgin materials at a time when
demand starts to surge. For example, the amount of spent EV
batteries reaching the end of their first life is expected to growexponentially after 2030 in the SDS, offering the potential to reduce
the pressure on investment for primary supply (see Chapter 3).

minerals by keeping them in circulation as long as possible.
The level of recycling is typically measured by two indicators. End-oflife (EOL) recycling rates measure the share of material in waste
flows that is actually recycled. Recycling input rates (also calledrecycled content rates) assess the share of secondary sources intotal supply. EOL recycling rates differ substantially by metal. Base
metals used in large volumes such as copper, nickel and aluminium
have achieved high EOL recycling rates (Henckens, 2021). Precious
metals such as platinum, palladium and gold have also achieved
higher rates of recycling due to very high global prices encouraging
both collection and product recycling. Lithium, however, has almost
no global recycling capabilities due in part to limited collection andtechnical constraints (e.g. lithium reactivity in thermodynamic andmetallurgic recycling), with a similar picture for REEs. There are also
regional variances: around 50% of total base metal production in theEuropean Union is supplied via secondary production, using recycled

Although various commercial and environmental challenges exist, thecompetitiveness of the recycling industry is set to improve over timewith economies of scale and technology improvement as more
players enter the field. Their relative advantages are likely to befurther supported by potential upward pressure on production costs
for virgin resources. Also, regions with greater deployment of clean
energy technology stand to benefit from far greater economies ofscale. This highlights the sizeable security benefit that recycling canbring to importing regions and underscores the need to incorporate acircular approach in the mineral security framework.
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The state of play

The Role of Critical Minerals in Clean Energy Transitions

Companies that mine and process minerals have a major role to play in clean energy
transitions
Major mining companies that produce selected energy transition minerals, 2019
CopperFreeportCodelco
8% BHP McMoRan
6%
6%

Others70%

Lithium

NickelGlencore
5%Southern
Copper Corp.
5%

2019 production: 20.8 Mt

Vale
8%

Norilsk
Nickel7%
Glencore Jinchuan
4%
Group
3%

BHP
2%
Others76%

CobaltAlbemarle
24%
Others44%

Others
39%
SQM
12%

Mineral Resources
8%
Galaxy Resources
6%

Tianqi
Lithium
11%

2019 production: 0.50 Mt

2019 production: 2.5 Mt

Glencore
27%
ShalinaResources
10%

EurasianGroup
4%
Gécamines
6%

China
Molybdenum
9%2019 production: 0.15 Mt

IEA. All rights reserved.
Notes: Mt = million tonnes. Glencore’s cobalt production volume includes output from Katanga Mining Ltd. Shalina Resources’ cobalt production volume includes
output of Chemaf. Lithium production volumes are denoted on a lithium carbonate-equivalent basis.
Source: S&P Global (2021).
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The state of play

The Role of Critical Minerals in Clean Energy Transitions

Some mining majors have reduced coal exposure in recent years, although a decisive shift
towards the minerals required for energy transitions is not yet visible

Anglo
American Glencore Rio Tinto

BHP

Vale

Production portfolio value of selected diversified major mining companies, 2014 and 2019
2014

Coal

2019
Iron ore

2014
2019
2014

Energy transition
minerals

2019

Others

2014
2019
2014
2019
0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%
IEA. All rights reserved.

Notes: Energy transition minerals include copper, lithium, nickel, cobalt, manganese, molybdenum and platinum-group metals. The value of the 2014 production
portfolio was estimated using 2019 prices to remove price effects.
Source: IEA analysis based on companies’ annual reports and S&P Global (2021).
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The state of play

The Role of Critical Minerals in Clean Energy Transitions

Investment in new mineral supply projects has been on an upward path…

Billion dollars (2020)

Announced capital cost for greenfield projects for selected minerals
30

CobaltLithium
20

NickelCopper
10

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020
IEA. All rights reserved.

Notes: Capital cost for cobalt includes only those projects whose primary commodity is cobalt. The figures do not include sustaining capital expenditure.
Source: S&P Global (2021).

PAGE | 38

The state of play

The Role of Critical Minerals in Clean Energy Transitions…but continued investment is needed to manage new price cycles and volatility
Price movement and volatility of selected minerals

Index (2015 Jan = 100)

Price movement

Price volatility

500

Palladium
Lithium

400

Cobalt300

OilNatural gas

200

Nickel100

Coal

Lithium

CopperCobaltNickelJan-21

Oct-20Jul-20

Apr-20Jan-20

Oct-19Jul-19Apr-19Jan-19Oct-18

Jul-18Apr-18Jan-18Oct-17

Jul-17

Apr-17Jan-17Oct-16

Jul-16

Apr-16

Jan-16Oct-15

Jul-15

Apr-15Jan-15

CopperMinerals
Fossil fuels

Aluminium
50
100
150
Monthly standard deviation (Jan-2010 - Feb-2021)
IEA. All rights reserved.

Notes: Assessment based on Lithium Carbonate CIF Asia, LME Copper Grade A Cash, LME Cobalt Cash and LME Nickel Cash prices.
Source: IEA (2020a), S&P Global (2021).

PAGE | 39

The state of play

The Role of Critical Minerals in Clean Energy Transitions

Exploitation of mineral resources gives rise to a variety of environmental and social
implications that must be carefully managed to ensure reliable supplies
Selected environmental and social challenges related to energy transition minerals
Areas of risks
ClimatechangeLand use
Environment

SocialDescription• With higher greenhouse gas emission intensities than bulk metals, production of energy transition minerals
can be a significant source of emissions as demand rises• Changing patterns of demand and types of resource targeted for development pose upward pressure• Mining brings major changes in land cover that can have adverse impacts on biodiversity• Changes in land use can result in the displacement of communities and the loss of habitats that are hometo endangered species

Watermanagement• Mining and mineral processing require large volumes of water for their operations and pose contamination
risks through acid mine drainage, wastewater discharge and the disposal of tailings• Water scarcity is a major barrier to the development of mineral resources: around half of global lithium andcopper production are concentrated in areas of high water stress

Waste• Declining ore quality can lead to a major increase in mining waste (e.g. tailings, waste rocks); tailings dam
failure can cause large-scale environmental disasters (e.g. Brumadinho dam collapse in Brazil)• Mining and mineral processing generate hazardous waste (e.g. heavy metals, radioactive material)

Governance• Mineral revenues in resource-rich countries have not always been used to support economic and industrial
growth and are often diverted to finance armed conflict or for private gain
• Corruption and bribery pose major liability risks for companies

Health andsafety• Workers face poor working conditions and workplace hazards (e.g. accidents, exposure to toxic
chemicals)• Workers at artisanal and small-scale mine (ASM) sites often work in unstable underground mines without
access to safety equipment

Human rights• Mineral exploitation may lead to adverse impacts on the local population such as child or forced labour(e.g. children have been found to be present at about 30% of cobalt ASM sites in the DRC)

• Changes in the community associated with mining may also have an unequal impact on women
PAGE | 40

The state of play

The Role of Critical Minerals in Clean Energy Transitions

Clean energy transitions offer opportunities and challenges for companies
As the world moves from fuel-intensive systems to more materialintensive systems, companies that produce minerals and metals
provide an essential bridge between resources in the ground and theenergy technologies that consumers need. As such, there is large
scope for mining and refining companies to contribute to orderly clean
energy transitions by ensuring adequate supply of minerals. These
projects will inevitably be subject to strong scrutiny of their social andreal commitment of countries to their climate ambitions) as well as
the complexities involved in developing high-quality projects.
The picture is starting to change, as countries have sent stronger
signals about their net-zero ambitions, and price signals for someminerals in 2017-2018 offered greater encouragement. Investment in
new projects picked up in the latter part of the 2010s (although there
was a Covid-induced fall in 2020). This trend would need to besustained in order to support ample supply, although the risk of boom
and bust cycles is ever-present for commodities that feature longenvironmental performance.
Many of the large mining companies are already involved in theenergy sector, as producers of coal. Energy transitions therefore
present a challenge, as well as an opportunity, as companies
respond to rising stakeholder pressure to clarify the implications ofenergy transitions for their operations and business models. Some ofthese companies are already moving away from coal. Rio Tinto
entirely exited the coal business in recent years and other companies
are heading in a similar direction, largely through reducing thermal
coal production. Although there has been growing participation inlead-times from project planning to production (see Chapter 3).
Prices for minerals tend to be volatile, often more so than fortraditional hydrocarbons, due to the mismatch between the pace ofchanges in demand patterns and that of new project development,
and also to the opacity of supply chains. In the late 2010s, prices forminerals with relatively smaller markets – such as lithium and cobalt– recorded a dramatic increase in a short time as the adoption of EVs
started to grow in earnest. Although prices have since dropped, as
higher prices triggered a swathe of supply expansions (in the form of
ASMs for cobalt), this has been a wake-up call about possible strains
on supply and market balance. This provides additional reasons forpolicy makers to be vigilant about this critical aspect of a clean energy
future.

copper production in recent years, they have yet to make a concerted
move into energy transition minerals.
Despite the prospects offered by energy transitions, until recently
companies were quite cautious about committing significant capitalto new projects; this is largely because of uncertainties over thetiming and extent of demand growth (linked to questions about the
PAGE | 41

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Mineral requirements forclean energy transitions

PAGE | 42

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Introduction
Minerals and metals 1 have played a critical role in the rise of many of
the clean energy technologies that are widely used today – from windturbines and solar panels to electric vehicles and battery storage. As
the deployment of clean energy technology rises, the energy sector
is also becoming a vital part of the minerals and metals industry. Withclean energy transitions, the linkages between minerals and energy
are set to strengthen.

under two main IEA scenarios: the Stated Policies Scenario (STEPS)
and the Sustainable Development Scenario (SDS).
For each of the clean energy technologies, we estimate overallmineral demand using four main variables: clean energy deployment
trends under different scenarios; sub-technology shares within eachtechnology area; mineral intensity of each sub-technology; andmineral intensity improvements. 2 The first two variables were takenfrom the projections in the World Energy Outlook 2020,
complemented by the results in the Energy Technology Perspectives

However, this raises the question: will sufficient sustainable andresponsibly sourced mineral supplies be available to support theacceleration of energy transitions? The first step to address this is tounderstand the potential requirements for minerals arising from clean

2020.
We compiled the mineral intensity assumptions through extensive
literature review, and expert and industry consultations, including withIEA Technology Collaboration Programmes. The pace of mineralintensity improvements varies by scenario, with the STEPS generally
seeing minimal improvement over time as compared to modest
improvement (around 10% in the longer term) assumed in the SDS.
In areas that may particularly benefit from economies of scale or
technology improvement (e.g. silicon and silver use in solar
photovoltaic [PV], platinum loading in fuel cells, rare earth element

energy transitions.
The type and volume of mineral needs vary widely across the
spectrum of clean energy technologies, and even within a certain
technology (e.g. wind turbine technologies; EV battery chemistries).
In this chapter we assess the aggregate mineral demand from a wide
range of clean energy technologies – low-carbon power generation(renewables and nuclear), electricity networks, electric vehicles(EVs), battery storage and hydrogen (electrolysers and fuel cells) –This report considers a wide range of minerals and metals used in clean energy technologies,
including chromium, copper, major battery metals (lithium, nickel, cobalt, manganese and graphite),molybdenum, platinum group metals, zinc, rare earth elements and others (see Annex for thecomplete list). Steel and aluminium are not included in the scope for demand assessment, but

aluminium use in electricity networks is exceptionally assessed given that the outlook for copper isclosely linked with aluminium use in grid lines (see Introduction).
2
See Annex for methodologies and data sources.

1

PAGE | 43

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions[REE] use in wind turbines), we applied specific improvement rates
based on the review of underlying drivers.
Projected mineral demand is subject to considerable uncertainty. It ishighly dependent on the stringency of climate policies (reflected in
the difference between the STEPS and SDS), but also on different
technology development pathways. As such, in addition to our base

Electricity
networks• Delayed shift to nickel-rich cathodes• More rapid move towards a silicon-rich anode• Faster uptake of lithium metal anodeall-solid-state batteries• Rapid adoption of home energy storage• Early commercialisation of vanadium flow
batteries

While our report focuses on projecting mineral requirements for clean
energy technologies, for the five focus minerals – copper, lithium,nickel, cobalt and neodymium (as a representative for REEs) – it also
assesses demand from other sectors. This is to understand thecontribution of clean energy technologies to overall demand andbetter assess supply-side challenges. We projected mineral demandfor other sectors using historical consumption by end-use
applications, relevant activity drivers (e.g. GDP, industry value
added, vehicle activities, steel production) and material intensities(see Annex: Scope and methodology).

Alternative technology evolution pathways explored

Wind

EVs

IEA. All rights reserved.

the impacts of varying technology evolution trends.

Solar PV

Alternative cases

Battery
storageassumptions for technology development pathways (“base case”) in
both the STEPS and SDS, we identified key variables for eachtechnology that could drive mineral demand in different directions.
We then built 11 alternative cases under both scenarios to quantify

Technology

Technology

Alternative cases• Comeback of high cadmium telluride• Faster adoption of perovskite solar cells• Wider adoption of gallium arsenide
technology• Constrained REE supply• Increased use of aluminium in undergroundcables• Wider adoption of direct-current systems

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Mineral needs vary widely across clean energy technologies
Critical mineral needs for clean energy technologies
CopperCobaltNickelLithium

REEs

Chromium

Zinc

PGMs

Aluminium*

Solar PV
Wind
Hydro
CSP
Bioenergy
Geothermal
NuclearElectricity
networks
EVs and battery
storage
HydrogenNotes: Shading indicates the relative importance of minerals for a particular clean energy technology ( = high; = moderate; = low), which are discussed in theirrespective sections in this chapter. CSP = concentrating solar power; PGM = platinum group metals.
* In this report, aluminium demand is assessed for electricity networks only and is not included in the aggregate demand projections.
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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Total mineral demand from clean energy technologies is set to double in the STEPS andquadruple in the SDS by 2040

Mt

Total mineral demand for clean energy technologies by scenario
30

Hydrogen

4xElectricity networks20

EVs and battery storage
2x
Other low-carbon
power generation

10

Wind

Solar PV
2010

2020

2030

2040
STEPS

2030

2040
SDS
IEA. All rights reserved.

Notes: Includes all minerals in the scope of this report, including chromium, copper, major battery metals (lithium, nickel, cobalt, manganese and graphite),molybdenum, platinum group metals, zinc, REEs and others, but does not include steel and aluminium (see Annex for a full list of minerals). Mt = million tonnes.

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

The relative demand growth is particularly high for battery-related minerals
Growth in demand for selected minerals from clean energy technologies in 2040 relative to 2020 levels
Renewables- and network-related minerals

Index (2020 = 1)

Battery-related minerals
50

10
42

40

8

30

6

7

25
21

20

19

4

3

2.9

13
10

8

6

8

6

2.0

2

2.7
1.8

1.7

2.3

3
STEPS SDS STEPS SDS STEPS SDS STEPS SDS STEPS SDS
Lithium

Graphite

CobaltNickelManganese

STEPS SDS STEPS SDS STEPS SDS STEPS SDS
REEs

Molybdenum

CopperSilicon

IEA. All rights reserved.

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Clean energy technologies are set to emerge as a major force in driving demand growth for
critical minerals
Share of clean energy technologies in total demand for selected minerals
100%

80%

60%

40%

20%

2010 2020 2040 2040 2010 2020 2040 2040 2010 2020 2040 2040 2010 2020 2040 2040 2010 2020 2040 2040
STEPS SDS
Lithium

STEPS SDS
CobaltSTEPS SDS
NickelSTEPS SDS
CopperSTEPS SDS
Neodymium
IEA. All rights reserved.

Note: Demand from other sectors was assessed using historical consumption, relevant activity drivers and the derived material intensity.
PAGE | 48

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Changing fortunes: Coal vs energy transition minerals

USD billion (2019)

Revenue from production of coal and selected energy transition minerals in the SDS
500

REEs
Silicon400

Manganese
300

Graphite
Cobalt200

Nickel100

Lithium
CopperCoal

Energy transition
minerals
2020

Coal

Energy transition
minerals
2030

Coal

Energy transition
minerals
2040
IEA. All rights reserved.

Notes: Revenue for energy transition minerals includes only the volume consumed in clean energy technologies, not total demand. Future prices for coal are
projected equilibrium prices in WEO 2020 SDS. Prices for energy transition minerals are based on conservative assumptions about future price trends (moderate
growth of around 10-20% from today’s levels).

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Rising deployment of clean energy technologies is set to supercharge demand for criticalminerals
The global clean energy transitions will have far-reachingconsequences for mineral demand over the next 20 years. By 2040
total mineral demand from clean energy technologies double in themineral intensity (especially with growing contributions from mineralintensive offshore wind). Solar PV follows closely, with its unmatchedscale of capacity additions among the low-carbon power generation
technologies. Hydropower, biomass and nuclear make only minor
contributions given their comparatively low mineral requirements and

STEPS and quadruple in the SDS.
EVs and battery storage account for about half of the mineral demand
growth from clean energy technologies over the next two decades,
spurred by surging demand for battery materials. Mineral demand foruse in EVs and battery storage grows nearly tenfold in the STEPS
and around 30 times in the SDS over the period to 2040. By weight,
mineral demand in 2040 is dominated by copper, graphite and nickel.
Lithium sees the fastest growth rate, with demand growing by over
40 times in the SDS. The shift towards lower cobalt chemistries formodest capacity additions.
The rapid growth of hydrogen use in the SDS underpins major growthin demand for nickel and zirconium for use in electrolysers, and forcopper and platinum-group metals for use in fuel cell electric vehicles(FCEVs). Despite the rapid rise in FCEVs and the decline in catalytic
converters in gasoline and diesel cars, demand for platinum-groupmetals in internal combustion engine cars remains higher than inbatteries helps to limit growth in cobalt, displaced by growth in nickel.

FCEVs in the SDS in 2040.

Electricity networks are another major driving force. They account for
70% of today’s mineral demand from the energy technologies

Demand for REEs – primarily for EV motors and wind turbines –grows threefold in the STEPS and around sevenfold in the SDS byconsidered in this study, although their share continues to fall as othertechnologies – most notably EVs and storage – register rapid growth.

2040.
For most minerals, the share of clean energy technologies in total
demand was minuscule until the mid-2010s, but the picture is rapidlychanging. Energy transitions are already the major driving force fortotal demand growth for some minerals. Since 2015 EVs and battery
storage have surpassed consumer electronics to become the largest

Mineral demand from low-carbon power generation grows rapidly,
doubling in the STEPS and nearly tripling in the SDS over the period
to 2040. Wind power plays a leading role in driving demand growth
due to a combination of large-scale capacity additions and higher
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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

consumers of lithium, together accounting for 30% of total current
demand. This trend is set to accelerate as countries step up theirclimate ambitions. Clean energy technologies become the fastestgrowing segment of demand for most minerals, and their share of
total demand edges up to over 40% for copper and REEs, 60-70%
for nickel and cobalt and almost 90% for lithium by 2040 in the SDS.
Assessments based on total mineral weights often do not adequately
account for the significance of certain minerals. It is also useful toconsider the revenue generated from producing the minerals, as
there is a wide range in monetary value between minerals. Coal iscurrently the largest source of revenue for mining companies by awide margin. Revenues from coal production are about ten times
larger than those from producing minerals used in clean energy
technologies. However, accelerating clean energy transitions are set
to change this picture radically. In the SDS, coal’s stronghold on theenergy system is increasingly challenged by phase-out policies inmany countries and also by the rise of renewables. By contrast, manyenergy transition minerals are likely to face a tailwind from growing
demand and upward pressure on prices. This underpins a sharp
reversal of fortunes between coal and energy transition minerals. In
the SDS, the combined revenue from energy transition minerals(including only the volume used in the clean energy sector) overtakesthat of coal by 2040.

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

A wide range of futures are possible, mainly related to level of climate ambition and action, as
well as technology uncertainties
Mineral demand from clean energy technologies in 2040 relative to 2020 under different scenarios and technology evolution trends
Renewables- and network-related

60

STEPS
Series8
Base case50

Slow shift to high-Ni
Rise of ASSB
Rise of Si-Anode40

Rise of home storage
Rise of VFB

30

Series7
SDS
Base case20

Slow shift to high-Ni

8

Series8
STEPS
Base case

7

Comeback of CdTe
Rise of GaAs solar cell

6

Rise of perovskite

5Constrained REE supply

4

Rise of DC gridHigher Al in grid
SDSSeries7

3

Base case
Comeback of CdTe

2

Rise of ASSB
Rise of Si-Anode10

Index (2020 = 1)

Index (2020 = 1)

Battery-related

Rise of home storage

Rise of GaAs solar cell
Rise of perovskite

1Constrained REE supply

Rise of VFB
Lithium
100 Cobalt
200 Nickel
300

Higher Al in grid

Graphite
400
500

Copper
100 Silicon
200 REEs
300
400

Rise of DC grid
IEA. All rights reserved.

Notes: Al = aluminium; ASSB = all-solid-state batteries; CdTe = cadmium telluride; DC = direct current; GaAs = gallium arsenide; Ni = nickel; Si = silicon; VFB =vanadium redox flow batteries.

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Strong climate ambitions can reduce uncertainties around demand evolution, thereby
stimulating investment and reducing security risks
Demand projections are subject to large variations, which lead to awide range of possible futures. According to our analysis of the
scenarios and alternative cases, lithium demand in 2040 may be 13
times higher (if vanadium redox flow batteries rapidly penetrate themarket in the STEPS) or 51 times higher (if all-solid-state batteriescommercialise faster than expected in the SDS) than today’s levels.

announced and expected climate ambitions – in other words, whether
clean energy deployment and resulting mineral demand follows
STEPS or SDS trajectories.
Here, governments have a key role to play in reducing uncertainty bysending strong and consistent signals about their climate ambitions
and implementing specific policies to fulfil these long-term goals. The
recent pickup in new project investments reflects the way thatgovernment climate commitments provide market signals for

Likewise, cobalt and graphite may see 6- to 30-times higher demandthan today depending on the scenario that unfolds. Among nonbattery materials, demand for REEs grows by seven times in theinvestments, which could help ensure reliable supply of minerals to
support an orderly energy transition. The efforts also need to beaccompanied by a range of measures to dampen the rapid growth inprimary supply requirements such as promoting technology
innovation for material efficiency or substitution, scaling up recycling
and extending the lifetime of existing assets through better
maintenance (see Chapter 3).

SDS, but growth may be as low as three times today’s levels shouldwind companies tilt more towards turbines that do not use permanent
magnets in the STEPS context.
These large uncertainties around possible futures may act as a factor
that hampers companies’ investment decisions, which could in turncause supply-demand imbalances in the years ahead. Despite thepromise of massive demand growth, mining and processing
companies may be reluctant to commit large-scale investment given

In the following sections we explore the mineral requirements foreach clean energy technology under different scenarios and withthe wide range of possible demand trajectories.

varying trends in technology evolution.

However, the biggest source of demand variance does not come fromtechnology. It comes instead from the uncertainty surrounding

PAGE | 53

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Low-carbon power generation

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Solar PV: Annual deployment of solar PV triples in the SDS by 2040, driven by huge growth inemerging economies

GW

Annual solar PV capacity addition by region and scenario
400

100%

Rest of world
Middle East

300

75%

Southeast Asia
AfricaLatin America

200

50%

EuropeUnited States

100

25%

India
China

2015

2020

2030

2040

2030

STEPS

2040

Share of total power
capacity addition (right axis)

SDS
IEA. All rights reserved.

Note: GW = gigawatt. China = People’s Republic of China.
Source: IEA (2020c).
PAGE | 55

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Solar PV: Mineral use in solar PV varies widely by module type, currently dominated by
crystalline silicon
Worldwide solar PV capacity has increased by almost 20 times overthe past decade, spurred by declining costs and strong policy supportin key regions (IEA, 2020c). With sharp cost reductions over the past
decade, solar PV now offers some of the lowest levelised electricity
costs in most countries, cheaper than new coal- or gas-fired power
plants. In both the STEPS and SDS, solar sets new records for(IRENA, 2016). Thin-film technologies require more glass but lessminerals overall than c-Si. CdTe and CIGS panels use no silver orsilicon, but instead require cadmium and tellurium (CdTe) or indium,gallium and selenium (CIGS). Distributed solar PV systems tend tohave string inverters or microinverters, requiring about 40% more
copper than utility-scale projects, which typically use central
inverters. Other mineral intensities are similar between utility-scale

deployment each year after 2022, representing 45% of total power
capacity additions by 2040. Innovation in solar PV technologies has
also enabled remarkable advances in efficiency. For instance, theand distributed applications.
Innovation in the manufacturing and design of c-Si panels over the
past decade has contributed to large reductions in materials intensity.
Since 2008 silicon intensity has more than halved as wafer thickness
diminished substantially (Fraunhofer ISE, 2020), while silver intensity
fell by 80% thanks to more efficient and less silver-intensive

average module efficiency of commercial wafer-based silicon
modules increased from about 12% to 17% in the past decade(Fraunhofer ISE, 2020), while cadmium telluride (CdTe) module
efficiency doubled from 9% to 19%.
Solar PV plants are mainly composed of modules, inverters, trackers,
mounting structures and general electrical components. For utilityscale solar PV plants, differences in mineral intensities comeprimarily from differences in module types. Crystalline silicon (c-Si)
modules have become the dominant PV technology, followed by the“thin-film” alternatives: cadmium telluride (CdTe), copper indium
gallium diselenide (CIGS) and amorphous silicon (a-Si). By weight,
c-Si PV panels typically contain about 5% silicon (solar cells), 1%
copper (interconnectors), and less than 0.1% silver and other metals

metallisation pastes (ITRPV, 2020).
Since silicon and silver are among the most expensive elements insolar PV cells, advances in material intensity are expected tocontinue, with further assumed reductions of around 25% and 30% in
2030 for silicon and silver respectively. The intensities of otherminerals are also expected to decrease as overall efficiency
improves, including through the use of new technologies such asbifacial, n-type or half-cut cells, multi busbars, dual-glass modules
and string inverters.
PAGE | 56

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Solar PV: Rapid deployment of solar PV in the SDS underpins more than doubling of mineraldemand for solar PV by 2040 despite continued intensity reductions
c-Si modules dominate the solar PV market, accounting for 95% of
global solar PV capacity additions in 2020. They are expected tocontinue to dominate over the coming decades, as costs continue todecrease with further automation and larger, more durable cells. In
addition, innovation is improving c-Si cell efficiency with thedevelopment of passivating contacts, the switch to n-type materials,

Capacity additions in 2040 in the STEPS are 25% lower than in the
SDS. However, slower assumed improvements in material intensity
for silver and silicon offset the lower capacity additions, resulting insimilar demand for silver and silicon in the two scenarios.

and multi-junction/tandem solar cells, which helps cement c-Si’sleading position. Silicon-based cells can also be combined withperovskite technologies with the aim of addressing theirinstability/lifetime issue and lowering the barriers to mass productionof perovskite solar cells.
In our base case, thin film technologies remain niche over the coming
decades, despite seeing further efficiency gains and cost reductions.
Their use may be limited to applications where lower weight and/or
greater flexibility is required, mostly in distributed and building
applications.
In the SDS, capacity additions in 2040 are triple those of 2020,
resulting in a near tripling of copper demand from solar PV. Material
intensity reductions help to significantly dampen demand growth forsilver and silicon. Despite higher annual capacity additions, demand
for silver and silicon is lower in 2040 than in 2030, and only 18% and
45% higher than in 2020.
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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Solar PV: Copper demand more than doubles by 2040, but continued innovation to reducemineral intensity helps to offset demand growth for silicon and silver
Demand for copper, silicon and silver for solar PV by scenario

kt

CopperSiliconSilver

1 200

1 200

6

1 000

1 000

5

800

800

4

600

600

3

400

400

2

200

200

1

2020

2030

2040

STEPS

2030

2040

SDS

2020

2030

2040

STEPS

2030

2040

SDS

2020

2030

2040

STEPS

2030

2040

SDS
IEA. All rights reserved.

Note: kt = thousand tonnes.

PAGE | 58

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Solar PV: Crystalline silicon is expected to remain the dominant PV technology, but further
progress on alternative technologies could see them taking significant market share by 2040
Share of annual capacity additions by PV technology under different technology evolution scenarios
Distributed

Utility-scale
2010

Base caseBase case

2010
2020

2040

0%

High
CdTe

2040

High
perovsk High
ite
GaAs

High
CdTe
High
GaAs

2040

High
perov
skite

2040
2040

2020

20%

40%

60%

80%
c-Si

2040
2040
2040

100%
CIGS

CdTe

a-Si

0%

20%

GaAs

Perovskite

40%

60%

80%

100%

IEA. All rights reserved.
Notes: c-Si = crystalline silicon; CIGS = copper indium gallium diselenide; CdTe = cadmium telluride; a-Si = amorphous silicon; GaAs = gallium arsenide.

PAGE | 59

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Solar PV: Demand for silicon falls in the alternative cases, but demand for other semiconductormaterials rises
While c-Si modules are expected to continue to dominate the solar
PV market, further progress on alternative technologies could see
these technologies achieving growing market shares by 2040, which
we explore in three alternative cases: high CdTe, high perovskite,

efficiency levels, starting at around 9.7% in 2012 (Kim et al., 2012)and exceeding 25% today (NREL, 2019). However, in order tochallenge the dominance of silicon in photovoltaics, perovskites will
have to overcome significant technological hurdles. Most pure
perovskite solar cells that have shown high efficiency are no larger
than a fingernail and need to be scaled up enormously to match theoutput of commercial c-Si solar cells. The second major drawback forthese cells is their stability. Perovskites are compounds that arehighly soluble in water and even in the moisture in the air. This meansand high GaAs.

High CdTe case
Further progress in CdTe technologies could lead to higher cell
efficiency, longer lifetimes and reduced costs. The High CdTe
scenario sees mass production of CdTe cells starting around 2030.
The penetration of CdTe would be faster in distributed applications,that the perovskite layer thickness reduces rapidly within just an hourof exposure to ambient conditions even at a relatively low humidity of
40% (Shirayama et al., 2016). The final concern comes from thechemistry of the most frequently reported perovskite structure forwhere their lower weight and higher flexibility are an advantage.
In the High CdTe scenario, demand for cadmium and tellurium grows
sevenfold by 2040 in the SDS to 1 300 tonnes and 1 400 tonnes
respectively. This rapid growth would put pressure on supply
capacities, which are currently around 23 000 tonnes for cadmium
and 500 tonnes for tellurium (USGS, 2021).

solar cell applications (such as methylammonium lead triiodide or“MAPI”), which uses up to 10% lead by weight in pure perovskite solar
cells (Saliba et al., 2018) and could hamper its adoption in certain
jurisdictions. Alternative lead-free technologies are being studied, but
are still far from reaching the record efficiencies synonymous with thelead-based counterparts (Zhao et al., 2017).

High perovskite case

A pure perovskite solar cell does not contain silicon or most of thematerials that are used in the fabrication of crystalline silicon solar
cells. However, given the limitations of pure perovskite solar cells

Perovskite solar cell technology has received a lot of researchattention in the past decade as it holds the promise of much higher

PAGE | 60

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

described above, the easiest path to scale up and industrialise
perovskite technology and circumvent many of its challenges is tocombine it with the crystalline silicon technology (Nature Energy,2020). This could be the fastest route to market for perovskites

crystalline structure that makes it much more suitable for fabricating
multi-junction solar cells by growing layers of different III-V crystalline
materials on top of each other. The advantage of a multi-junction
solar cell over a single-junction solar cell is that it allows theabsorption of a wider range of the solar spectrum, thereby increasing
the power conversion efficiency of the resulting solar cell. The
research efficiency of GaAs-based multi-junction solar cells
fabricated at the National Renewable Energy Laboratory (NREL) in

primarily because of the large market share held by silicon. Siliconsolar cells have almost reached their physical efficiency limit inlaboratory devices, but researchers at Oxford PV have demonstrated
perovskite/silicon tandem solar cells that reach laboratory efficienciesof up to 28%, outperforming both perovskite and silicon single-

the United States and Fraunhofer ISE in Germany is rapidly
approaching 50%, making them the most efficient solar PV
technology known to date (NREL, 2019). GaAs became the mostcommonly used material for photovoltaic arrays in satellites in theearly 1990s and remains the preferred choice for aerospace
applications. For terrestrial applications, GaAs-based multi-junction
solar cells are most often employed in concentrator solar photovoltaic

junction devices (NREL, 2019).
In light of the constant development and strong research interest, thiscase assumes that perovskite/silicon tandem solar cell technology
will capture 30% of the market for utility-scale PV and 15% for
distributed PV by 2040. This would reduce silicon demand in 2040 byover 10%, while raising lead demand by around 45% compared toprojects.

the base case in the SDS context.

The main challenge to overcome for GaAs-based solar cells is thecost of raw materials and wafer manufacturing. It is reported that awafer of GaAs is roughly 50 times more expensive than a wafer ofc-Si of comparable size (Bleicher, 2010). This significant costdifferential is what has prevented GaAs-based solar cells fromentering the commercial solar PV market for terrestrial applications.
However, latest developments indicate that this situation may not
persist for long. In 2020 researchers at NREL reported a
breakthrough in III-V cell technology that could significantly bring
down costs (Willuhn, 2020). Recent studies (Horowitz et al., 2018)

High GaAs case
There are semiconducting materials whose physical and chemical
characteristics make them much better candidates for solar cell
technology than silicon. The III-V semiconductors such as GaAs,
indium arsenide (InAs), gallium nitride (GaN) and indium phosphide,
are a family of materials developed as binary compounds between
elements from group 13 and group 15 of the periodic table. GaAs has
the optimal bandgap energy for solar cell applications. It also has a

PAGE | 61

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Changes in mineral demand in alternative technology
evolution cases in the SDS context

suggest ample scope for major cost reductions via scaling up
production volumes, reducing the cost of epitaxial crystal growth,
lower substrate costs through recycling and lower metallisation costs.
This could bring prices closer to c-Si within the next 10 to 15 years.

Arsenic
Tellurium

Although direct competition with c-Si may not be possible, such cost
reductions combined with advantages in weight, flexibility, energy
density, temperature stability, radiation hardness etc. could makethem attractive for use in very large terrestrial applications that cannot

SiliconHigh GaAs

Lead

High perovskite

Gallium

be served by silicon today.

High CdTe

Cadmium-50%

Although GaAs represents a small share in the base case (5% in2040), in the High GaAs case we assume a market share of 15% forutility-scale and 5% for distributed applications in 2040. Compared tothe base case, this would add 8 kt of arsenic demand (25% of global
production today), 3.5 kt of gallium (10 times more than high-purity
refined gallium production today), and 0.1 kt of indium demand by
2040 in the SDS. This implies that scaling up the high GaAs
technology needs to go hand in hand with efforts to recover morematerials from a by-product stream of bauxite, zinc, copper and gold

50%

150%

250%

350%

% change

IEA. All rights reserved.
Note: Relative change compared to the base technology evolution case in the
SDS.

processing or via recycling.

PAGE | 62

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Wind: Wind deployment is expected to accelerate over the coming decades, thanks to falling
costs, policy targets and increased investor confidence

GW

Annual wind capacity addition by region and scenario
200

50%

Rest of world
Middle East

160

40%

Southeast Asia
Africa120

30%

Latin America
Europe80

20%

United States
India

40

10%

China
Share of total power capacity
additions (right axis)

2015

2019

2030

2040

2030

STEPS

2040
SDS
IEA. All rights reserved.

Source: IEA (2020c).

PAGE | 63

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Wind: Larger turbines – particularly offshore – help to accelerate annual capacity additions
over the coming decades
Global installed capacity of wind power has nearly quadrupled overthe past decade, spurred by falling costs, which have declined byabout 40% on average globally, and policy support in more than
130 countries (IEA, 2020c). In both the STEPS and SDS, wind power
is set for strong growth, with the offshore wind industry maturing andadding to developments in onshore wind on the back of technology

Turbine size has also grown considerably, from a global weighted
average of 1.9 megawatts (MW) for onshore turbines installed in2010 to 2.6 MW in 2018 (IRENA, 2019). Manufacturers are offering
5 MW onshore turbines in 2021. Turbine size has grown even more
quickly in offshore wind, with an average rated capacity of 5.5 MW
installed in 2018, compared with the newest turbine designs offering
capacities of 10-14 MW. Even larger turbines are expected in the
coming years, with promises of 20 MW turbines already on the

improvements and low-cost financing. Annual capacity installations
for wind in the SDS are expected to more than double by 2040 to
160 GW, representing more than a fifth of overall power capacity

horizon.

additions. Installations are currently concentrated in China, Europe
and the United States, but the regional picture is set to become
diverse with particularly strong growth in Southeast Asia, India,

The growing size of turbines is an important contributor to theincrease in capacity factor and the reduction in material use. Taller
towers, larger rotors and lighter drivetrains have enabled higher

Latin America and the Middle East.

capacity factors, which have risen from an average of 27% in 2010
for newly commissioned onshore projects to 34% in 2018.

The share of offshore in total wind deployment is poised to growconsiderably. Cost reductions and experience gained in Europe’s
North Sea are opening up huge opportunities in many parts of theworld. Offshore wind offers higher capacity factors than onshore wind
thanks to larger turbines that benefit from higher and more reliablewind speeds. There are further innovations on the horizon, such as
floating turbines that can open up new resources and markets.

These trends have also helped to reduce the material intensity forsome materials in wind power. For example, on a kilogramme (kg)per MW basis, a 3.45 MW turbine contains around 15% less concrete,
50% less fibreglass, 50% less copper and 60% less aluminium thana 2 MW turbine (Elia et al., 2020).

PAGE | 64

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Wind: Mineral needs for wind power depend on the turbine type, with particularly highsensitivity for rare earth elements
Mineral intensity for wind power by turbine typeUse of rare earth elements (kg/MW)

Direct drive

GearboxOverall mineral intensity (kg/MW)

DFIG

PMSG

PMSG

EESG
0

3 000
CopperNickel

6 000
Zinc
Molybdenum

9 000
Manganese
Rare earths

12 000Chromium
Others

15 0000

100
Neodymium
Dysprosium

200

300

Praseodymium
Terbium
IEA. All rights reserved.

Notes: DFIG = double-fed induction generators; PMSG = permanent-magnet synchronous generator; EESG = electrically excited synchronous generator. The
intensity numbers are based on the onshore installation environment. More copper is needed in offshore applications due to much longer cabling requirements.
Sources: Carrara et al. (2020); Elia et al. (2020)
PAGE | 65

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Wind: The growing market for turbines with permanent magnets – particularly for offshore
projects – could dramatically increase rare earth demand over the coming decades
Wind turbines – which consist of a tower, a nacelle and rotors erected
onto a foundation – require concrete, steel, iron, fibreglass, polymers,

attributes as well as lower maintenance costs. In addition to REEs,
copper intensity for offshore projects can be more than twice as highas onshore, with substantial copper usage in submarine collector andlarger cables.

aluminium, copper, zinc and REEs.
Mineral intensities not only depend on the turbine size, but also on
the turbine type. There are four main types of turbine: gearbox
double-fed induction generator (GB-DFIG), gearbox permanentmagnet synchronous generator (GB-PMSG), direct-drive permanentmagnet synchronous generator (DD-PMSG) and direct-driveWith increasing power per tower as turbines become taller and larger,
lighter and more efficient configurations of PMSG technologies are
becoming increasingly preferred. In the base case, PMSG
technologies account for around 95% of the offshore market in 2040

electrically excited synchronous generator (DD-EESG).

and 40% of the onshore market.

Turbines based on PMSGs require neodymium and dysprosium. DDPMSGs generally contain larger amounts of REEs compared to GBPMSGs for smaller overall size and lower weight and higher
efficiency. Zinc is evenly used among turbine types as a protective
coating against corrosion.

In the SDS, demand for REEs in wind – neodymium andpraseodymium in particular – is set to more than triple by 2040, driven
by the doubling of annual capacity additions and a shift towards
turbines with permanent magnets. Copper demand reaches 600 kt
per year in 2040, propelled by offshore wind requiring greater cabling.
Offshore wind accounts for nearly 40% of copper demand from wind

The onshore wind market is currently dominated by GB-DFIGs,
accounting for more than 70% of the global market. DD-PMSGs havedoubled their market share over the past 10 years from around 10%
in 2010 to 20% in 2020. In the offshore sector, DD-PMSG turbines
are the main choice, with around 60% of the market worldwide.
Requiring taller and larger turbines, offshore wind sites generally opt
for DD-PMSG configurations due to their lighter and more efficient

despite accounting for only 20% of total wind capacity additions.

Constrained REE supply case
However, mounting demand for REEs from a variety of clean energy
technologies such as wind and EVs, coupled with concerns aroundrising prices and geopolitical events, could lead to different
technology choices. This is explored in the Constrained REE supply
PAGE | 66

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Turbine shares for wind power capacity additions in the SDS

case, which sees manufacturers gradually switching to non-magnet
technologies and project developers adopting hybrid configurations
with a gearbox and a smaller magnet. Onshore projects movetowards DD-EESGs while, in offshore projects, DD-PMSGs cede

OnshoreOffshore2010

some market share to technologies with lower REE use such as DDEESGs. However, there would be no notable switch back to GB
turbines given the technical fitness of DD turbines in the offshore
environment and industry-wide efforts to reduce REE intensity in DD

Base caseBase case

2010
2020
2030

Constrained
REE supply

Constrained
REE supply

2030
2040
0%

In this case, neodymium demand in the SDS is contained to around
8 000 tonnes in 2030 and 40% lower in 2040 compared to the basecase. Demand for praseodymium and dysprosium are 15% and 32%
lower, respectively, compared to the base case in 2040.

2030
2040

2040

turbines.

2020

20%

40%

GB-DFIG60%

80% 100%
GB-PMSG

2030
2040
0%

DD-PMSG

20% 40% 60% 80% 100%
DD-EESG

IEA. All rights reserved.

Another option to reduce REE consumption in permanent magnets is
to use a high-temperature superconductor (HTS). This offers
potentially substantial reductions in mass and size, as they canachieve enormous current densities, but require extremely low
temperatures and expensive cryostats. The technology is still at the
R&D stage, with multiple designed prototypes and a sole 3 MW
industrial-scale turbine developed so far. Despite promising results,
HTS wind farms remain far from being competitive with existing windtechnologies and we do not expect them to be a game changer in thenext decade.

PAGE | 67

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Wind: Demand for rare earths quadruples in the SDS by 2040, although the scale of growth mayvary depending on the choice of turbine technologies
Mineral demand for wind by scenario
Rare earth elements

2 000

kt

kt

Overall demand in the base case20

OthersRare earths

1 500

15

Molybdenum
Nickel1 000

10Terbium

Chromium
Manganese

500

Zinc

Dysprosium
Praseodymium

5

Neodymium

Copper
2020

2030

2040

STEPS
Base case

2030

STEPS

2040

2020

SDS
Base case

2030

2040

SDS
Base case

2030

2040

SDS
Constrained REE
IEA. All rights reserved.

PAGE | 68

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Other renewables: Mineral demand from other renewables varies significantly depending on
their mineral intensities
Annual capacity addition and mineral demand from other renewable technologies by scenario
Annual capacity addition

Mineral demand
Chromium

CSP

2020

Copper2040 STEPSManganese

Bioenergy

Hydro

Geothermal

2040 SDS

Nickel2020
2040 STEPS

Zinc

2040 SDS

Other

2020
2040 STEPS
2040 SDS
2020
2040 STEPS
2040 SDS
10

20

30

40 GW

200

400

600

800 ktIEA. All rights reserved.

Note: CSP = concentrating solar power.

PAGE | 69

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Concentrating solar power: Rapid growth in capacity additions comes with substantial demandfor chromium, copper, manganese and nickel
Since 2010 policy and financing initiatives in Spain and theUnited States have helped to more than double the global installedcapacity of CSP. However, overall installed capacity remains low ataround 7 GW in 2020 owing to limited suitable geographies, highproject costs and long distances to demand centres. In the SDS,
installed capacity grows by nearly 40 times between 2020 and 2040

Central tower systems generally require more materials thanparabolic trough systems, including eight times more manganese,four times more nickel, and twice as much silver. However, parabolic
trough systems require more than twice as much copper.
Parabolic troughs accounted for over 80% of CSP capacity additionsin 2010, but their share has been steadily declining, ceding market
share to central tower systems, which have higher efficiency andgreater storage capacity (IEA, 2020c). Central towers accounted foraround 60% of CSP capacity additions in 2020, and their share is
expected to grow to 75% by 2040 in the SDS.

– albeit from a low base – driven by growth in the Middle East, Africa
and Asia Pacific.
CSP systems use mirrors to direct solar radiance to a central receiver
where energy is transmitted to a heat-exchange fluid used togenerate electricity. Two main types of CSP technology – parabolic
troughs and central towers – account for most of the installed,planned and projected additions. Parabolic trough systems direct
solar radiance to a tube containing a heat-exchange fluid runningalong the length of a parabolic mirror. Central tower systems very
closely track the movement of the sun reflecting and directing solar
radiance to a centralised receiver tower containing a heat-exchange

The expansion of CSP, driven by material-intensive central towersystems, comes with substantial demand growth for chromium,copper, manganese and nickel. Between 2020 and 2040 in the SDS,
chromium demand from CSP grows by 75 times (to 91 kt), copper
demand grows by 67 times (to 42 kt), manganese demand grows 92fold (to 105 kt), and nickel demand grows 89-fold (to 35 kt).

fluid.

PAGE | 70

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Geothermal: A key driver for growing nickel, chromium, molybdenum and titanium demand
from low-carbon power technologies
Mineral intensity of key minerals in geothermal in 2019

Around 16 GW of geothermal capacity are currently installed,providing low-carbon baseload power in geo-hotspots such as
Kenya, Iceland, Indonesia, the Philippines, Turkey and theUnited States. In the SDS, installed capacity grows fivefold to 82 GW

Geothermal

Chromium

Hydro

Molybdenum

by 2040.
Geothermal power plants generate electricity by powering turbines
using underground hydrothermal resources (steam or hot water)
piped to the surface. The very high temperatures and potentiallycorrosive nature of geothermal reservoirs require the use of
specialised steel (high in chromium, molybdenum, nickel andtitanium) in order to withstand the harsh operating environment.

Biomass
CSP

NickelSolar PV

TitaniumWind
25 00050 00075 000 100 000 125 000
kg/MW

IEA. All rights reserved.
Notes: CSP mineral intensity is for central tower systems; solar PV mineralintensity is for utility-scale cSi; wind mineral intensity is for onshore GB-DFIG.

In the SDS, mineral demand from geothermal more than quadruples
between 2020 and 2040. Despite accounting for less than 1% of all
low-carbon power capacity additions in 2040, geothermal power is amajor source of demand for nickel, chromium, molybdenum andtitanium from the power sector. Of the total mineral demand from all
low-carbon power sources in 2040, geothermal accounts for threequarters of nickel demand, nearly half of the total chromium andIn addition to power, geothermal resources can provide heating andcooling services. However, ground-source heat pumps require
relatively minimal steel and instead rely on plastic piping, with somesystems relying high-conduction copper for heat exchange.

molybdenum demand, and 40% of titanium demand.

PAGE | 71

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Hydropower and bioenergy: Limited impacts on mineral demand due to low material intensity
Hydropower is the largest renewable source of electricity, accountingfor 17% of global electricity generation in 2020. While it plays animportant role in providing flexibility to the power system, its share of
total power capacity additions continues to decline in the SDS
through to 2040, as high capital costs and geographic constraints
limit further growth.

generation triples by 2040 to 2 150 terawatt hours (TWh), with total
installed capacity rising to 420 GW. China, the United States, Russia
and India account for over half of the cumulative capacity additions
to 2040.
Mineral demand from bioenergy comes mostly from copper(2 270 kg/MW in 2019), which is similar to that of most otherrenewable generation technologies (Ashby, 2013). While the exact
design of bioenergy boilers is different, overall mineral requirements
are similar to those of coal and gas-fired power generation. However,bioenergy demands significant levels of titanium (400 kg/MW), which
is higher than all other generation technologies except geothermal.

In the SDS, hydropower capacity additions in 2040 are only 70%
higher than in 2020, representing the lowest relative growth among
all renewable sources. Between 2020 and 2040, nearly 60% of
cumulative capacity additions occur in Asia Pacific, with China alone
accounting for a quarter of the global total.
While hydropower uses substantially more cement and concrete thanany other generation technology, it has a relatively low mineralintensity compared to other sources of low-carbon power.
Hydropower does not use REEs, and its current use of copper(1 050 kg/MW), manganese (200 kg/MW) and nickel (30 kg/MW) areamong the lowest of all low-carbon sources (Ashby, 2013).
Hydropower accounts for 2% and 11% of the total demand for copperand chromium respectively from all low-carbon power capacity

In the SDS, overall mineral demand from bioenergy more thandoubles by 2040 compared to 2020, with copper accounting for morethan three-quarters of the total. However, copper demand frombioenergy only accounts for 2.5% of the total copper demand from all
low-carbon power sources in 2040. Conversely, titanium demand
from bioenergy accounts for nearly 60% of all titanium demand fromlow-carbon power in 2040.
Overall, combined with their modest capacity growth, hydropowerand bioenergy are unlikely to face any significant supply constraints
for minerals.

additions in 2040 in the SDS.
Bioenergy is a major source of renewable power today, generating
as much electricity as solar PV in 2019. In the SDS, annual
PAGE | 72

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Nuclear: Modest growth in mineral demand from nuclear power
Average annual capacity additions and mineral demand from nuclear power

18

Mineral demand for nuclear

kt

GW

Average annual capacity additions
Rest of world

16

70

Russia

12

India

50

8

China

40

6

Japan

30

European Union

20

2

North America
2020 2021-30 2031-40 2021-30 2031-40
STEPS

Molybdenum

60

10

4

Other

80

Middle East

14

90

Manganese
NickelCopper10

Chromium2020 2021-30 2031-40 2021-30 2031-40

SDS

STEPS

SDS
IEA. All rights reserved.

Note: Russia = Russian Federation.

PAGE | 73

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Nuclear: Limited implications for minerals due to low material intensity
Nuclear power is the second-largest source of low-carbon power
behind hydropower, accounting for about 10% of global electricity
generation in 2020. Global installed capacity of nuclear power grows
modestly to 2040 (by 15% in the STEPS and 45% in the SDS
compared to 2020), as capacity declines in North America andEurope are offset by growth in emerging economies.

highly sensitive to the use of high-alloy steel in nuclear power plants.
Quantities of high-alloyed, low-alloyed and unalloyed steel used in a
nuclear power plant are seldom reported.

China is on track to become the leader in nuclear power around 2030,
overtaking the United States and the European Union, more thandoubling its current capacity to around 110 GW in the SDS.

decline slightly in the SDS.

Considering the maturity of the technology, there are unlikely to be
drastic reductions in mineral intensity over the coming decades. As aresult, mineral intensity is assumed to be similar in the STEPS, andIn the SDS, average annual mineral demand from nuclear power
between 2031 and 2040 grows by around 60% compared to 2020
levels, reaching 82 kt. It is dominated by chromium (42%), copper(28%) and nickel (25%). Yttrium demand in 2040 is around 7.7
tonnes, or around 0.0015% of current global reserves.

Significant programmes underway in India and the Middle East also
contribute to the expansion of nuclear power. Capacity additions in2020 were around 10 GW, and increase to an average of 11 GW in
the STEPS and 16 GW in the SDS between 2031 and 2040.

We conducted our assessment based on mineral requirements forlight-water reactor technology, which dominates the world’s nuclear
fleet (accounting for over 80% of all reactors in operation). Bothpressurised-water reactors – the dominant choice for future
expansion – and boiling-water reactors have similar mineral intensity.
However, mineral intensities can be different for small modular
reactors or more advanced nuclear technologies, but data for these

Along with hydropower, nuclear is one of the low-carbon technologies
with the lowest mineral intensity. Key mineral needs include
chromium (2 190 kg/MW in 2019), copper (1 470 kg/MW), nickel(1 300 kg/MW), hafnium (0.5 kg/MW) and yttrium (0.5 kg/MW) (ECJRC, 2011). Uranium is not within the scope of our analysis, as thisreport focuses on mineral requirements for production of equipment,
and not for operations. Around 16% of the worldwide supply ofhafnium is currently used for nuclear reactor applications (EC JRC,
2011). However, the mineral intensity of chromium and nickel aretechnologies remains scarce.

PAGE | 74

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Electricity networks

PAGE | 75

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Rising electricity demand, alongside much higher shares of wind and solar PV, requires asignificant expansion of electricity networks

Thousand km

Annual average grid expansion and replacement needs by scenario
6 000

Driver of addition
Replacement

5 000

Expansion
Type of grid

4 000Transmission
3 000

Distribution

2 000
1 000

DriverType

2018-2020

DriverType

Driver2021-2030

Type

2031-2040
STEPS

DriverType

Driver2021-2030

Type

2031-2040
SDS
IEA. All rights reserved.

Source: IEA (2020c).

PAGE | 76

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Electricity networks are the backbone of secure and reliable power systems, and have a vitalrole in integrating clean energy technologies
With over 70 million km of transmission and distribution lines
worldwide, electricity networks are the backbone of today’s powersystems. Distribution systems currently account for over 90% of totalline length, and play an increasing role in supporting the integrationof residential solar PV and onshore wind capacity, in addition to theirtraditional role of delivering electricity to regional end users. Likewise,

flexibility – all necessitate significant expansion of electricity grids.
The projected requirement for new transmission and distribution lines
worldwide in the STEPS is 80% greater over the next decade thanthe expansion seen in the last ten years. The importance of electricity
grids is even greater in the case of faster energy transitions. In the
SDS, the annual pace of grid expansion needs to more than double
in the period to 2040. Around 50% of the increase in transmission
lines and 35% of the increase in distribution network lines aretransmission systems, which are instrumental in connecting largehydro, thermal and nuclear power fleets with load centres, have newtasks to fulfil. For example, they now integrate large amounts of solar

attributable to the increase in renewables.

PV and wind capacity (in particular offshore wind), strengtheninterconnection between countries and increase the resiliency of
power systems. These new tasks are supported by the rise of highvoltage direct current (HVDC) technologies. HVDC systems havebeen used since the 1950s, but over two-third of total installed HVDC
transmission capacity has been added in the past 10 years. Today,
HVDC systems represent around 7% of newly installed transmission
systems and their share is expected to rise further given the

In addition to additional lines, there is scope to refurbish grids tostrengthen the resiliency of electricity systems to climate change andextreme weather events. Refurbishment of electricity grids is alsostrongly linked to digitalisation, given the rising need for smart andflexible grids. Investment in digitalisation and grid flexibility helps
increase reliability and can reduce the cost of generating, transmitting
and distributing electricity. In the SDS, some 55% of the expansion
to 2030 in advanced economies such as the European Union and theUnited States are attributable to refurbishment and digitalisation.

considerable technological progress made over the past decade.
Many of the features that characterise a clean energy system – thegrowing role of electricity in final consumption, rising contributions
from renewables in electricity supply and the greater need for

PAGE | 77Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Growing need for grid expansion underpins a doubling of annual demand for copper andaluminium by 2040 in the SDS
Demand for copper and aluminium for electricity grids by scenario

Mt

STEPS

SDS

30

30
Aluminium

25

25

20

20

Transmission

15

15

Copper10

10Distribution

Transformer
Distribution

5

5Transmission
2020

2030

2040

2020

2030

2040
IEA. All rights reserved.

Note: Includes demand for grid expansion and replacement.

PAGE | 78

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

The choice of material in electricity networks is mainly driven by the type of power line, but isalso influenced by cost and technical considerations
The huge expansion of electricity grids requires a large amount ofminerals and metals. Copper and aluminium are the two mainmaterials in wires and cables, with some also being used intransformers. It is estimated that some 150 Mt of copper and 210 Mt

By contrast, aluminium is commonly used for overhead lines given its
weight advantage. In some instances, aluminium is also used forunderground and subsea cables.
We estimate that some 5 Mt of copper and 9 Mt of aluminium wereof aluminium are “locked in” the electricity grids operating today.

used in 2020 to build electricity grids, of which over 55% isattributable to distribution grids. We conducted bottom-up
assessments of projected line additions and replacements by type(overhead, underground and subsea), voltage level and respective

Copper has long been the preferred choice for electricity grids due toits inherent performance advantages. Its electrical conductivity is thesecond best among various metals after silver and 60% higher thanaluminium. Its thermal conductivity, an often-overlooked attribute
when designing and operating a grid, is also some 60% higher thanaluminium. However, it also has drawbacks. Copper is over threetimes heavier by weight than aluminium and is more costly – average
prices for copper over the past 10 years were USD 7 100 per tonne(in 2019 dollars) whereas those for aluminium averaged at around
USD 2 000 per tonne.

material choice. These show annual copper demand for electricity
grids growing from 5 Mt in 2020 to 7.5 Mt by 2040 in the STEPS, andmore than double that to almost 10 Mt in the SDS. Aluminium demand
increases at a similar annual pace, from 9 Mt in 2020 to 13 Mt in the
STEPS and 16 Mt in the SDS by 2040. Overhead lines account for alarger share of future expansion by line length, but underground andsubsea cables require higher mineral content per unit length. The
scope for significant demand growth, coupled with a higher share of
raw materials in total cost, raises questions over how companies can
reduce material intensity in their grids in order to lower material cost.

This underpins different material choices according to the type of
power line. Copper is widely used for underground and subsea
cables where weight is not a major concern and superior technicalproperties (e.g. corrosion resistance, tensile strength) are required.

PAGE | 79Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Costs for copper and aluminium currently represent around 20% of total grid investment;
higher prices could have a major impact on the adequacy of grid investment
Share of copper and aluminium costs in new grid investment under different price assumptions
CopperAluminium

25%

25%

20%

20%

15%

15%

10%

10%

5%

5%

0%

USD 5 300
10-yr low

USD 7 100 USD 10 000 USD 12 000
10-yr avg.
10-yr high0%

USD 1 700
10-yr low

USD 2 000
10-yr avg.

USD 2 700
10-yr high

USD 3 500

IEA. All rights reserved.
Notes: The shares have been calculated according to total electricity grid investment in 2019, with raw material prices adjusted. Darker bars indicate average costs
between 2010 and 2019; costs are in USD per tonne.
PAGE | 80

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Additional switching to aluminium for underground cables and the wider uptake of DC systems
can alter the material requirements considerably
Copper and aluminium demand for electricity networks in the SDS under alternative cases

30

Higher adoption of DC systems (High DC)

Mt

Mt

Additional switching to aluminium (High Al)
30

25

25

20

20

15

15

10

10

5

5

Base caseHigh Al

Base case2030

High Al

Base case2040

High DC

2030

CopperBase caseHigh DC

2040

Aluminium
IEA. All rights reserved.

PAGE | 81

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Increased use of aluminium could reduce copper demand by one-third, while wider adoption of
DC systems could reduce aluminium and copper demand by 15%of larger conductors, although technicalrequirements often do not allow such shifts.

As grids are modernised, expanded and digitalised, projected
investment in electricity grids reaches USD 460 billion in 2030 in the
STEPS and USD 620 billion in the SDS. However, shortfalls in grid
revenues can put the adequacy of grid investment at risk.

orenvironmental

If aluminium takes a higher share in underground and subsea cables
than our base case assumptions – accounting for 50% for distributionlines and 30% for transmission lines by 2040 – this reduces copper
demand in 2040 by 3.7 Mt (down by a third) while raising aluminium
demand by 5.8 Mt (up by over a third).

Prices for minerals may add to this pressure given their considerable
share in total investment costs. Using average prices over the past
10 years, copper and aluminium costs are estimated to represent
around 14% and 6% of total grid investment respectively. At thehighest prices observed over the past decade, these increase toalmost 20% and 8% respectively, highlighting the major impacts thatmineral prices can have on the ability of grid operators to undertake
investment.

Wider adoption of DC systems
Another option is to adopt HVDC systems more widely. At present
electricity networks are largely operated via alternating current (AC)systems, which require a minimum of three wires to transmit
electricity. However, HVDC systems use only two wires, which
implies a direct saving on metal consumption of one-third comparedto AC systems. HVDC systems are also capable of transporting more
electricity (theoretically up to 3.5 times more) compared to AC
systems, which could reduce copper and aluminium demand andalso the need for grid expansion (which results in further savings).

Increased use of aluminium in underground cables
Grid operators have long been working to reduce raw material costs.
One option is to switch from copper to more affordable aluminium.
When comparing the costs of the two materials, this seems to be an
obvious option to improve the economics of grid investment. This ispossible in cases where technical or regulatory boundaries allow, andhas happened in recent years. Some drawbacks such as the lower
electrical conductivity of aluminium can be compensated by the use

In the case of a wider uptake of HVDC systems – accounting for 50%
of new transmission lines and 30% of distribution lines by 2040 –would reduce combined demand for copper and aluminium in 2040
by 4 Mt (or 15%) in the SDS.
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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Electric vehicles andbattery storage

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

The adoption of EVs and battery storage is set to accelerate rapidly over the coming decades
Annual electric car sales and battery storage capacity additions in the SDS
Battery storage capacity additions

GW

millions

Electric car sales
80
70

120
Rest of world

100

Korea

60
80

50

Japan
European Union

60

40

United States

30

40

India

20

China

20

10

STEPS (World)
2020

2030

2040

2020

2030

2040
IEA. All rights reserved.

Notes: Electric cars include battery electric and plug-in hybrid electric passenger light-duty vehicles, but exclude 2/3-wheelers.
Source: IEA (2020c).

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Policy support will continue to play a key role in accelerating the growth in EVs and battery
storage, alongside a wider range of model offerings from automakers
EVs

Policy developments over the past year have been positive for EVs,
and are discussed in further detail in Global EV Outlook 2021 (IEA,

Electric car sales worldwide climbed 40% in 2020 to around 3 million,
reaching a market share of over 4% (IEA, 2021). As a result, morethan 10 million electric cars are now on the road globally. However,to achieve global climate goals, their share of sales needs to climb
rapidly to around 40% by 2030, alongside the rapid electrification oflight commercial vehicles, buses and freight trucks.

2021). In the European Union, increased stringency of the CO2
emissions regulation for cars and vans in 2021 and beyond should
contribute to maintaining the momentum for EV deployment. The
European Commission is also in the process of revising the 20252030 targets for CO2 emissions regulation for cars and vans, theAlternative Fuels Infrastructure Directive, the Batteries Directive andthe EURO pollutant emissions standard.

Policy support has been a major driver of initial EV deployment, andwill continue to play a critical role in accelerating the growth of the EV

Sales are likely to grow in Japan and Korea over the near term, withthese governments significantly increasing EV subsidies. China has
set a target of 20% of vehicle sales to be ZEVs by 2025, andfleet over the coming decades. As of April 2021, over 20 countries
and 70 subnational and city governments have announced 100%zero-emission vehicle targets or the phase-out of internal combustion
engine (ICE) vehicles before 2050 (Cui et al., 2020; Hall et al., 2020;

announced plans to phase out conventional gasoline-powered
vehicles by 2035 (General Office of the State Council of the People’s
Republic of China, 2020; Nishiyama, 2020). In India, national, stateand city governments have announced efforts to accelerate theadoption of EVs. For example, New Delhi recently announced major
EV subsidies and awareness programmes to achieve its target forbattery EVs to account for 25% of all new vehicles sales by 2024
(Times of India, 2021).

IEA, 2021; Wappelhorst & Cui, 2020).
Most major car markets currently offer some form of subsidy or tax
reduction for the purchase of electric cars as well as support schemes
for deploying charging infrastructure (IEA, 2020b, 2021). Provisions
in building codes to encourage charging facilities and the “EVreadiness” of buildings are becoming increasingly common. So too
are mandates to build fast charging infrastructure along highways.

In the United States stimulus measures and longer-term goals
adopted by the new administration will be critical to further
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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

accelerating EV deployment. In particular, the new administration
appears likely to prioritise fuel economy standards, promote charging
station deployment, provide tax credits and help factories making

Prospects for battery storage systems look set to improve as
advances in technological innovation and new business models
emerge. Battery storage systems are well suited to short-duration
storage that involves charging and discharging over a span of hours
or days. This makes them a good partner for short-run fluctuations in
the output from variable renewables, and there is a growing trend forbattery storage paired with solar PV and wind.

internal combustion engine cars retool to make EVs.
Several major automakers have announced plans to invest
aggressively in EVs and to rapidly scale up model availability. There
were around 370 EV models available in 2020, a 40% increase from2019 (IEA, 2021). Automakers have announced plans to have anadditional 450 models available by 2022 (McKinsey, 2020). General
Motors recently announced plans to phase out conventional gasoline
and diesel vehicles by 2035, while Volvo’s CEO indicated that thecompany would only sell EVs by 2030 (Campbell, 2021).

In the SDS, global installation of utility-scale battery storage is set fora 25-fold increase between 2020 and 2040, with annual deployment
reaching 105 GW by 2040 (IEA, 2020c). The largest markets forbattery deployment in 2040 are India, the United States and China.

Emerging technologies and business models such as shared and/or
autonomous vehicles – expected to have much more intensive use
patterns than privately owned vehicles – could alter demand
projections for new vehicles and minerals over the longer term.
However, given the uncertainty of their uptake, we do not consider

The growth of battery storage remains strongly dependent on
effective regulation that reflects the value of the flexibility services it
provides and enables fair access to markets. The need to properly
value the high performance of battery storage systems, including
their accurate and fast frequency response, is one aspect of abroader need for wholesale electricity market reform in the face of

these trends within the scope and timeline of this analysis.

rapidly evolving power systems.
A number of regulatory barriers specific to batteries are starting to beBattery storage

addressed, including the rates applied to behind-the-meter batteries
and the issue of double-charging, where energy storage systems arecharged twice for using the grid – once when charging and again

As of the end of 2020, around 15.5 GW of battery storage capacity
were connected to electricity networks. After annual installations ofbattery storage technologies fell for the first time in nearly a decadein 2019, they rebounded by over 60% in 2020 (BloombergNEF, 2021;
IEA, 2020a).

when discharging.

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

EV and battery storage deployment grows rapidly over the next two decades, with light-duty
EVs accounting for around 80% of the total

GWh

Global battery capacity additions
7 000
Battery storage

6 000
5 000

Heavy-duty PHEV

4 000
Heavy-duty BEV
3 000
Light-duty PHEV

2 000
1 000

Light-duty BEV
2020

2030

2040
STEPS

2030

2040
SDS
IEA. All rights reserved.

Notes: Light-duty includes passenger light-duty vehicles, light commercial vehicles, and two- and three-wheelers. Heavy-duty vehicles include medium-sized freighttrucks, heavy freight trucks and buses. BEV = battery electric vehicle; PHEV = plug-in hybrid electric vehicle; GWh = gigawatt hour.
Source: IEA (2020c).
PAGE | 87Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

A range of minerals are needed in EV motors and batteries
Most of the critical minerals in EVs are in two components: electricmotors and batteries.

Batteries
Lithium-ion batteries used in EVs and energy storage are composedof battery cells contained in battery modules within a battery pack.
Cells typically account for 70% to 85% of the total battery weight, andcontain a number of minerals in the active cathode material

EV motors
The two most common electric motor technologies for plug-in EVs
are permanent-magnet synchronous motors and asynchronous
induction motors (Ballinger et al., 2019).
Permanent-magnet motors have the highest efficiency and power
density, but their use of REEs make them expensive compared toother technologies. In addition to neodymium (0.25–0.50 kg/vehicle)
and other REEs (0.06–0.35 kg/vehicle), permanent-magnet motors
also require copper (3–6 kg/vehicle), iron (0.9–2 kg/vehicle) andboron (0.01–0.03 kg/vehicle) (Ballinger et al., 2019; Fishman et al.,2018; Nordelöf et al., 2019; Sprecher et al., 2014).
Induction motors have the advantage of lower costs, but only havemoderate efficiencies due to electrical losses in copper windings.
While induction motors do not require REEs, they require asubstantial amount of copper (11–24 kg/vehicle) for the rotor cage(e.g. lithium, nickel, cobalt and manganese), anode (e.g. graphite),and current collector (e.g. copper) (Argonne National Laboratory,
2020a). The remaining modules and pack components consist mostlyof aluminium, steel, coolants and electronic parts.
The need for each mineral varies considerably depending on thecathode and anode chemistries. For example, nickel manganesecobalt oxide (NMC) 111 batteries typically require almost eight times
more cobalt than nickel cobalt aluminium oxide (NCA+) batteries, buthalf as much nickel. Lithium iron phosphate (LFP) batteries do not
require nickel, cobalt or manganese, but need about 50% more
copper than NMC batteries.

and copper stator (Ballinger et al., 2019).
We assume that permanent-magnet motors remain the dominant EV
motor. We discuss alternative motors and the implications of highREE prices at the end of the EV section.
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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

EVs use around six times more minerals than conventional vehicles
Typical use of minerals in an internal combustion engine vehicle and a battery electric vehicle
Glider
EV motor + generator

CopperBattery - NCA

Lithium

BEV

Battery - NCA+

NickelBattery - NMC 333
Battery - NMC 532

Manganese

Battery - NMC 622

CobaltBattery - NMC 811
Battery - LFP

Graphite

ICE

Battery - LMO

REEs

GliderIC engine + powertrain
50

100

150

200

250

300

kg per vehicle
IEA. All rights reserved.
Notes: For this figure, the EV motor is a permanent-magnet synchronous motor (neodymium iron boron [NdFeB]); the battery is 75 kilowatt hours (kWh) with graphite
anodes.
Sources: Argonne National Laboratory (2020b, 2020a); Ballinger et al. (2019); Fishman et al. (2018b); Nordelöf et al. (2019); Watari et al. (2019).

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

The evolution of cathode and anode chemistries could drive mineral use for batteries in varying
directions
From the perspective of global energy transitions, the last ten years
have proved to be the decade of the lithium-ion battery. The 2019Nobel Prize-winning innovation not only transformed the world ofelectronics and realised the dream of electric mobility more rapidly
than any of its predecessors, but it is also widely considered to be avital missing piece of the puzzle integrating greater shares of variable(LCO), lithium manganese oxide (LMO), lithium iron phosphate(LFP), lithium nickel cobalt aluminium oxide (NCA) and lithium nickel
manganese cobalt oxide (NMC). The different combination ofminerals gives rise to significantly different battery characteristics.
Among the variants, LCO has the greatest energy density. Its highspecific energy (150–190 Wh/kg) and technological maturity makes
it a popular choice for portable electronics. The main drawback of the
LCO battery is its thermal instability and its relatively short cycle life
(500–1 000 full cycles). Coupled with safety concerns, LCO batteries
are not favoured for application in EVs.

renewables into our conventional electricity networks.
The fundamental advantage of lithium-ion batteries over alternatives
like lead acid or nickel cadmium batteries is their much higher energy
density. While lead acid batteries have specific energies in the rangeof 35 to 40 watt-hours per kilogramme (Wh/kg), lithium-ion batteries
have a range of around 90–260 Wh/kg. This allows them to be
stacked into far lighter and more compact battery packs than thosemade of other materials. The four main components of a lithium-ion
cell are the cathode, anode, liquid electrolyte and separator. The
lithium-ion donor from the cathode that travels through the liquid
electrolyte is the primary determinant of cell properties and gives the

The LMO battery has a high specific power, a longer cycle life (1 000–
1 500 cycles) and much better thermal stability than LCO. Being
cobalt-free is often considered as a key advantage of this chemistry.
However, it has a notably lower energy density, in the range of 100–
140 Wh/kg. Presently, it finds use in the production of electric bikes
and some commercial vehicles.

technology its name.

The LFP battery offers thermal stability even at high temperatures,
low cost and high durability (up to 2 000 full cycles while maintaining
its performance). However, its relatively low specific energy (90–140 Wh/kg) is a limitation for use in long-range EVs compared withother chemistries. Nevertheless, LFP batteries could be particularly

Cathode chemistries
Lithium-ion batteries are often categorised by the chemistry of theircathodes. The most commonly used varieties are lithium cobalt oxide
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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Tug of war between nickel and cobalt

favoured in stationary energy storage applications and heavy-duty
vehicles like trucks where the size and weight of a battery aresecondary considerations. Automakers in China are showing
renewed interest in using LFP technology for manufacturing electric

Advancement in lithium-ion battery technology involves more thanjust the challenge of improving energy density, durability, safety andcost. It also includes the effort to do so while minimising theenvironmental, social and political costs of acquiring their constituent

cars as they are cheaper, safer, simpler to package and do not
require the use of cobalt or nickel. Volkswagen recently announcedplans to use LFP batteries in its entry-level models (S&P Global
Platts, 2021).

materials.
Owing to price spikes and concerns over ethical mining practices in
the 2010s, EV producers have been working to reduce the amount ofcobalt in batteries over the past several years — this implies, in manycases, an increase in the quantity of nickel. NCA batteriestransitioned to NCA+, a nickel-rich variant of NCA, and NMC 111
batteries have moved increasingly towards NMC 532, NMC 622 and
NMC 811, and could move to even more nickel-rich chemistries(e.g. NMC 9.5.5). This trend of moving away from cobalt could

The NCA battery has the highest specific energy range (200–250 Wh/kg) in the current class of technologies as well as highspecific power, combined with a lifetime of 1 000 to 1 500 full cycles.
NCA is the technology preferred by manufacturers like Tesla, and has
immense potential for use in power systems in backup and load
shifting applications. However, they are more expensive than otherchemistries.

therefore have major implications for the requirement for nickel.

NMC batteries have longer cycle life (1 000–2 000 cycles) comparedto NCA, but a lower energy density (140–200 Wh/kg). It has
dominated the BEV and PHEV markets since its commercialisationin the early 2000s. While NCA batteries have higher specific energy
to their name, NMC batteries possess longer lifetimes, which makes

Recent efforts to reduce the use of nickel capitalise on the potentialof manganese, which is in relatively ample supply. SVOLT Energy
Technology introduced battery cells that have a lower share of nickel
and no cobalt by raising the use of manganese (Kane, 2021). A
manganese-rich cathode is less expensive and safer than nickel-richchemistries, but decreases the cathode’s stability, which can havethem the favoured choice for PHEVs. Manufacturers producing both
BEVs and PHEVs, such as General Motors, are known to use NMC
variants of lithium-ion batteries.

impacts on performance over the longer term (Nunez, 2020).

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Anodes must complement the cathode chemistries

These rapid cost reductions were made possible thanks to theremarkable growth in EV sales over the past decade and thecontinued penetration of high-energy density cathodes.

Anode materials are selected for their charge collection capability.
Graphite is currently the dominant choice for the anode in mostlithium-ion batteries, although certain manufacturers also use lithium
titanate instead of graphite. Efforts to replace some or most atoms of

New pack designs and falling manufacturing costs can lead to further
cost reductions in the near term. Costs are expected to fall below
USD 100/kWh by the mid-2020s, a milestone often considered as
one that will bring price parity between EVs and internal combustion

carbon in the graphite anode with silicon atoms are underway(e.g. Tesla, Porsche) and are expected to drastically improve theenergy density of the cells. However, silicon anodes swell during
charging, causing its surface to crack and performance to drop.

engine vehicles (BNEF, 2020).
The path to lower battery costs could follow many routes, depending
on a few major factors. First, as demand growth accelerates,
maintaining a steady supply to meet that demand and preserve thedrop in costs is likely to be increasingly challenging. Next, as weanalyse in the next chapter, the sources and supply chains of thevarious critical minerals that are needed to bring these energy density
improvements are often geographically concentrated in certain
regions, and an uninterrupted supply cannot be taken for granted.
Finally, as we reach the physical limits of improvement with current
technology and materials, notable cost reductions can only beachieved by the disruption of the current technology – for example in
the form of ASSB with lithium anodes or increased used of silicon ingraphite anodes for existing chemistries. Therefore, the continued
cost decline at a pace observed during the past decade cannot betaken for granted without a further acceleration in technology
innovation.

Another alternative to the graphite anode is pure lithium metal, which
also has far greater charge collection capability than graphite. But thisanode cannot be used with liquid electrolyte batteries due toundesirable chemical interactions between the electrolyte and themetal anode, which drastically reduces the lifetime of the cell. The
use of a lithium metal anode may increase significantly with theadvent of all-solid state batteries (ASSBs). Lithium-metal anodes do
not have the expansion problem of silicon anodes, but they are
expensive and present other technical problems.

Further technology innovation is needed to continue
cost reductions
The average cost of lithium-ion batteries has declined by almost 90%
over the past decade, falling to USD 137/kWh in 2020 (BNEF, 2020).

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Innovation on the horizon: The advent of all-solid state batteries
As current technology and materials bring us ever closer to thetheoretical limits of improving energy density, and battery prices start
to plateau by the middle of this decade, the world needs to lookbeyond the liquid electrolyte-based lithium-ion batteries. A significant
improvement in the energy density of EV batteries and a steep
decline in battery prices would require the disruption of the present
technology. Such a breakthrough is expected from the advent of

ASSBs equipped with lithium metal anodes could achieve a
volumetric energy density up to 70% greater than today’s lithium-ion
batteries that have conventional graphite anodes (Janek & Zeier,2016), making them the ideal batteries for EVs of the future. As an
added advantage, ASSB do not require expensive cooling systems
due to the absence of a flammable electrolyte. They have in fact
displayed better functionality at higher temperatures due to increased

lithium metal anode all solid-state batteries (ASSBs).

conductivity.

Most state-of-the-art commercial batteries with NCA, NMC or LFP

While experts predict that current lithium-ion batteries could reach acathodes require a liquid electrolyte for ion transfer and a graphitebased anode. These two components fundamentally limit thefunctionality and energy density of lithium-ion batteries today. The
flammability of the solvent in the electrolyte raises many safetyconcerns (Hess et al., 2015), and undesirable reactions between thesolvent and the conductive lithium salt lead to capacity fading andageing (Hendricks et al., 2015). Moreover, the electrolyte filling
process makes the production line more cumbersome and expensive

maximum energy density of 300 Wh/kg after 2025, lithium metal
solid-state batteries with densities of 320 Wh/kg have already been
fabricated (Placke et al., 2017) and their maximum potential could be
as high as 480 Wh/kg. This improvement in energy density would
mean that batteries of the same size could contain much more energy
in the future, thereby resulting in an effective reduction in the weightand cost of the new battery packs. The greatest challenge facing thisnew technology is scaling up the production to make it commercially(Wood et al., 2015). A compact solid electrolyte not only circumvents
these issues but also enables 3 the use of lithium metal as the anode(Varzi et al., 2016).

viable, since a direct transfer of laboratory preparation methods toindustrial-scale fabrication is not always successful.

Solid electrolytes act as a physical barrier to the formation of lithium dendrites that could form fromthe lithium anode and short-circuit the cell by connecting the anode and the cathode.

3

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Solid-state lithium metal anode batteries are reported to mostly bedesigned with NMC cathodes; however, they could also be combinedwith new cathode chemistries. The use of sulphur in lithium-based
cathodes (Li-S) is being viewed as a promising technological avenue

mass producing these new batteries within the next five years, ASSB
would be competing with the incumbent lithium-ion batteries forspace on the roads by the early 2030s and, thus, launch the next
phase of electric mobility.

because of its very high theoretical energy density. Current
prototypes developed by start-ups (Oxis-energy) already reach celllevel energy densities of over 500 Wh/kg; however, they are limited
to aerospace applications due to their low cycle life. Another study
published by Samsung reported an anode made of carbon black, andsilver nanoparticles (Ag-C) coated on stainless steel as the anode(Lee et al., 2020). This allows even better energy density than alithium metal anode. Nevertheless, for this analysis the ASSB scopeis limited to lithium-metal anodes combined with traditional NMC
cathodes, due to greater availability of data and information on the
prototypes of this technology.

Synergies between EVs and battery storage
Historically, trends from the automotive industry have oftentransferred to the power sector. Progress on improvement in EV
batteries could benefit stationary storage system technologies, while
the converse may not necessarily be true. Batteries for EVs must be
energy dense, small, safe and light, and have high cycle life. Energy
storage systems, by contrast, do not have such strict requirements
for size and weight, but instead prioritise cost, durability and safety.
Although NCA and NMC batteries might be considered too expensive
for most large-scale energy storage systems, they are ideal for wallmounted residential batteries used in combination with solar panels,
and their price could also be justified in certain large-scale storage
applications in cities with high population densities, where space islimited and energy density becomes crucial. A fair compromise
between the two applications is the LFP battery, with lower energy
density than NMC and NCA, but still small enough for buses andtrucks, inherently safer chemical composition, non-reliance on cobalt
and nickel, and lower prices more suitable for stationary applications.

After a robust and cost-effective scale-up process is found, thedesign of electric cars equipped with ASSB would take between three
to five years; this explains why several manufacturers have alreadybegun investing in R&D for this new battery technology. For example,
Colorado-based start-up Solid Power already has partnerships with
Ford Motor Company and BMW Group, and they believe theroadmap for commercial use of their ASSB in the automotive industry
is well-defined. The company estimates a 10–15% reduction in the
total cost of a battery pack compared to their liquid electrolyte
counterparts, with most of the savings coming from enhanced
packing density. If researchers and manufacturers find the solution to

Besides lithium-ion batteries, flow batteries could emerge as abreakthrough technology for stationary storage as they do not show
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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

performance degradation for 25–30 years and are capable of being
sized according to energy storage needs with limited investment. Oneof the most modern commercial Vanadium redox flow batteries, witha lifetime of 12 000 cycles at full power, went online in eastern Spain2020). However, flow batteries employ a completely different
technology, wherein their specific energy depends on the volume ofthe electrolyte and specific power depends on the surface area of theelectrodes, and they are therefore much too large for EV applications.

to operate with the Vega wind farms in December 2019 (Bellini,

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Passenger EVs shift from cobalt towards nickel-rich cathodes, with a slow uptake of solid statebatteries
EV cathode chemistries in the base caseMarket share

As it has become evident that reducing cobalt content in the cathodeand striving for higher energy density are key concerns for mostmanufacturers and countries, the base case scenario sees a shift
away from cobalt-rich chemistries. This is achieved in both NCA
batteries and NMC variants, where the ratio of nickel and manganese
are increased in the transition from NMC 111 to NMC 532, NMC 622

100%

ASSB
LMO
LFP
NMC 811
NMC 622
NMC 532
NMC 111
NCA+
NCA

80%
60%
40%

and ultimately NMC 811.

20%While most heavy trucks are reliant on LFP batteries in the medium
term, our base case also sees modest growth in the market share of
LFP for cars due to its increasing use in China and entry-level models
from VW.

0%

2020

2030
LDVs

2040

2020

2030

2040

HDVs

IEA. All rights reserved.
Notes: LDVs = light-duty vehicles (passenger cars and vans, light commercial
vehicles, and 2- and 3-wheelers); HDVs = heavy-duty vehicles (trucks andbuses).
Sources: IEA analysis complemented by Adamas Intelligence (2021a) and
EV-Volumes (2021).

The base case sees ASSB becoming commercially available byaround 2030 and requiring another 5 years for manufacturing
capacity to build up. Even in 2040, ASSB remain more expensive
than lithium-ion batteries and are therefore limited to premium
vehicles and developed countries. In the longer term, heavy trucks
operating long haul are likely to use ASSB as soon as they become
available because of the great benefits of energy density
improvement in these applications. They would enable increased
payload, greater operating range and shorter charging times.

For the anode, natural graphite is expected to continue to account forthe majority of market share. Even as artificial graphite starts to
replace natural graphite for reasons of improved purity and hence
energy density, a small number of manufacturers choose lithium
titanate (LTO) instead of graphite for heavier vehicles due to its fastcharging advantages. The dominance of graphite declines veryslightly over the years to make way for nanocomposite graphite

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

doped with silicon and for lithium metal that emerges with the advent

Results

In the SDS, nickel demand grows by 41 times to 3 300 kt, while cobalt
increases by only 21 times, as cathode chemistries shift away from
NMC 111 towards lower-cobalt chemistries (NMC 622 and NMC
811). Lithium demand grows by 43 times, while copper grows 28

In the SDS, battery demand from EVs grows by nearly 40 times
between 2020 (160 GWh) and 2040 (6 200 GWh). Overall demand
for minerals under the base case assumptions grows by 30 times
between 2020 and 2040, from 400 kt to 11 800 kt. In the STEPS,
battery demand from EVs grows just 11 times to nearly 1 800 GWh
in 2040, with demand for minerals growing ninefold to around

Graphite demand grows 25 times from 140 kt in 2020 to over 3 500 kt
in 2040. Silicon registers the largest relative growth, up over 460
times, as graphite anodes doped with silicon grow from a 1% sharein 2020 to 15% in 2040. Demand for REEs grows 15 times to 35 kt in
2040.

of ASSBs.

times.

3 500 kt in 2040.

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Mineral demand for EVs in the SDS grows by nearly 30 times between 2020 and 2040, withdemand for lithium and nickel growing by around 40 times
Mineral demand from new EV sales
Demand growth
Index, 2020 = 1

kt

Total demand
14 000
12 000
10 000

50
45
40
35
30

8 000

25
6 000

20
15

4 000

10

2 000

5
2020

2030

2040

STEPS

Lithium

Nickel

2030

2040
SDS

CobaltManganese

Copper

2040

2040

STEPS

SDS

Graphite

Silicon

REEs
IEA. All rights reserved.

Note: Silicon is excluded from the demand growth graph due to its very high growth (over 500-fold increase), starting from a low base.

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Alternative cases for EVs

Delayed shift to nickel-rich cathodeOn the cathode side, price spikes and social concerns surrounding
cobalt mining a few years ago triggered efforts to reduce cobalt
content in lithium-ion batteries. But cobalt currently appears to be well
supplied, at least in the short term. Instead, a rapid move towards
nickel-rich chemistries may be causing signs of tightness in the nickel
supply chain. The near-term supply prospects for Class I nickel
depend on whether planned projects in Indonesia can be carried out
smoothly (see Chapter 3).
The first alternative case therefore explores the outcome of thegrowing concerns about nickel supply and potential price increases
in the medium term. Should there be delays and cost overruns atplanned projects, it is not inconceivable for battery-grade nickel
prices to rise, in conjunction with relatively stable cobalt prices, toslow shift towards the nickel-rich chemistries.

PAGE | 99

In this case, we study the impact of a delayed shift to nickel-richchemistries for NCA and NMC batteries due to supply uncertainties
for nickel, while LFP, the emergence of ASSB and anode materials
remain as they are in the base case.

Cathode chemistries for light-duty EVs in the delayed shift tonickel-rich cathode case
Share of LDV EV

The base case projections are founded on a set of assumptions,which, when altered due to reasons of technology advancements,
could result in scenarios that produce very different results. We
therefore built three alternative scenarios and assessed how thedemand outlook for various minerals could change under varying
technology evolution trends.

100%
80%
60%
40%
20%
0%

2020

2030
Base

2040

2020

2030

2040

ASSB
LMO
LFP
NMC 811
NMC 622
NMC 523
NMC 111
NCA+
NCA

Delayed shift tonickel-rich cathode

IEA. All rights reserved.

A delayed shift to nickel-rich chemistries (and away from cobalt-richchemistries) results in nearly 50% higher demand for cobalt andmanganese in 2040 compared to the base case. Nickel demand is
5% lower in 2040 compared to the base case.

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Faster uptake of lithium metal anode all-solid statebatteries

Cathode chemistries for light-duty EVs in the faster uptake of
ASSB case
Share of LDV EV

While we assumed ASSB to take off meaningfully in the 2030s given
the challenges around scale-up, much earlier commercialisation andfaster penetration of ASSB in the EV market could alter the outlook
for minerals considerably. This would reflect major breakthroughs in
ASSB that have been made in recent years. ASSBs are safer as they
do not contain a flammable liquid electrolyte and could be cheaperas their cell structure is simpler and does not need coolingmechanisms for safety. They represent disruption of current
technology, rather than incremental improvements in existing lithiumion technologies.

80%
60%
40%
20%
0%

2020

2030

2040

Base

2020

2030

2040

ASSB
LMO
LFP
NMC 811
NMC 622
NMC 523
NMC 111
NCA+
NCA

Faster uptake of ASSB

IEA. All rights reserved.

Cathode chemistries for heavy-duty EVs in the faster uptake of
ASSB case
Share of HDV EV

We explore a much faster uptake of ASSB in the EV market, startingwith a small market share as early as the late 2020s. Its presence inthe market then grows significantly in the 2030s, even taking up morethan half the market by 2040 and ultimately capturing around threequarters of the electric car market by 2050. This case would imply
higher consumption of lithium, as ASSBs considered in this reportuse pure lithium metal anodes instead of graphite. (Lithium metal canonly be used as the anode in ASSBs; undesirable interactions withthe liquid electrolyte in lithium-ion batteries rapidly reduces the

100%

100%
80%
60%
40%
20%
0%

2020

2030
Base

lifetime of the battery.)
The faster uptake of lithium metal anodes and ASSB results in 22%
higher lithium demand in 2040 compared to the base case, but alsomuch lower demand for graphite (down 44%) and silicon (down 33%).
PAGE | 100

2040

2020

2030

2040

ASSB
LMO
LFP
NMC 811
NMC 622
NMC 523
NMC 111
NCA+
NCA

Faster uptake of ASSB

IEA. All rights reserved.

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Moving more rapidly towards a silicon-rich anode
For the anode, silicon (and lithium) have roughly 10 times as muchcapacity to hold electrons as graphite and, thus, can improve theenergy density of a battery by 20–50%. Many major manufacturersof lithium-ion batteries are increasingly venturing into higher siliconMoving rapidly towards a silicon-rich anode results in nearly threetimes as much silicon demand in 2030 compared to the base case,and a slight decrease in graphite demand (down 6%). By 2040 silicondemand is only 70% higher, owing to a higher adoption of silicon-rich
anodes even in the base case.

quantities in the anode in order to improve energy density. In thisalternative case, we consider the result of achieving higher-level(around 20%) silicon doping for graphite anodes compared to thebase case by 2030, and further improvement in the technology
leading to even higher doping levels by 2050.

Share of LDV EV

Anode shares for light-duty EVs in the high silicon-rich anode
case
100%

Lithium

80%

LTO

60%

Silicon

40%
20%
0%

2020

2030

2040

Base

2020

2030

2040

Artificial
graphite
NaturalgraphiteHigh silicon-rich anode

IEA. All rights reserved.
Note: LTO = lithium titanate oxide.

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

The alternative cases demonstrate the considerable sensitivity and uncertainty of mineraldemand to the future mix of EV battery chemistries% change compared to base case in 2040

Change in mineral use for EVs in alternative cases relative to the base case in the SDS
+ 80%
+ 60%
+ 40%
+ 20%

- 20%
- 40%
- 60%

2040

2040

2040

Delayed shift to nickel-rich cathode

Faster uptake of ASSBHigh silicon-rich anode

Lithium

NickelCobaltManganese

CopperGraphite

Silicon

REEs
IEA. All rights reserved.

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Utility-scale storage is expected to dominate the battery storage market
Safe and cheap LFP batteries for utility-scale storage are expected
to dominate the overall battery storage market. The remaining
demand is covered by the more expensive, but energy-dense, NMC
111 and NMC 532 used predominantly for home energy storage. The
NMC variants transition towards NMC 622 and NMC 811 in a similar
way to the market for EV batteries, albeit with a delay owing to thetime needed for transfer of technology and sufficient reduction in
prices. Vanadium flow batteries (VFBs) first become commerciallysuitable in 2030 with a small share, growing modestly to capture awider market for storage applications in large renewables projects.

Share

The largest relative growth is seen in nickel, which grows more than
140 times from 0.4 kt in 2020 to 57 kt in 2040. Cobalt demand
increases by 70 times while manganese demand increases by 58
times.

Cathode chemistries for storage
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

In the SDS, battery storage grows by 11 times between 2020
(37 GWh) and 2040 (420 GWh). Overall demand for minerals in thebase case grows by 33 times between 2020 and 2040, from 26 kt tonearly 850 kt. Overall mineral demand outpaces battery demand
growth, as the market share for LFP batteries is displaced by moremineral-intensive NMC chemistries.

OthersVFB
LFP
NMC811
NMC622
NMC523
2020

2040

2040
High homestorage2040
High
vanadium

NMC111

IEA. All rights reserved.

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Mineral demand for storage in the SDS grows by over 30 times between 2020 and 2040, withdemand for nickel and cobalt growing by 140 times and 70 times respectively
Mineral demand from battery storage additions in the SDS
Demand growth
Index, 2020 = 1

kt

Total demand
900
800
700
600

140
120
100

500

80

400

60

300

40

200

20

100
2020

2030

2040

STEPS

Lithium

160

Nickel

2030

2040
SDS

CobaltManganese

Copper

2040

2040

STEPS

SDS

Graphite

SiliconVanadium
IEA. All rights reserved.

Note: Silicon and vanadium are excluded from the demand growth graph.

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Alternative cases for energy storage
The base case for energy storage systems is built on the assumptionthat utility-scale storage forms a major proportion of the demand,
wherein cost (and not space) is the primary concern for thetechnology selection. However, several alternative scenarios could
alter the base case projections. For instance, more rapid adoption ofwall-mounted home energy storage would make size and thus energy
density a prime concern, thereby pushing up the market share of
NMC batteries such as those already used by the Tesla Powerwall.
Conversely, if the technology for flow batteries, which have theadvantage of virtually unlimited energy capacity and very long
lifetimes, reaches a stage of widespread commercialisation earlier
than expected, then utility-scale storage technology could shift awayfrom LFP batteries towards VFBs.

Rapid adoption of home energy storage
In this alternative case, we investigate the outcome of a scenario
where demand for storage beyond utilities grows rapidly. Here, theNMC battery share grows faster, achieving around a quarter of themarket share by 2030 and almost half by 2050. They are used inapplications such as home energy storage (e.g. storing solar
electricity for self-consumption, time-of-use load shifting, backup
power and increased off-grid applications). In many of theseapplications, space is one of the most important concerns, making

the more energy-dense NMC more favourable than their LFP
counterparts. The split between NMC 532, NMC 622 and NMC 811
evolves more or less as for the EV batteries base case. The trajectoryfor VFBs remains as for the base case.
The rapid adoption of home energy storage with NMC chemistries
results in 75% higher demand for nickel, manganese and cobalt in
2040 compared to the base case. A faster uptake of silicon-rich
anodes also results in 20% greater demand for silicon compared tothe base case in 2040.

Early commercialisation of Vanadium flow-batteries
In this case, the technology for VFBs reaches the level of maturity
required to be deployed in large-scale projects earlier than in the basecase. They increase their market share from 2030 onwards andcapture almost a third of the energy storage market by 2050, withmaximum applications in large wind and solar farms.
The early commercialisation of VFBs results in 2.5 times moredemand for vanadium compared to the base case in 2030 and 50%
more demand in 2040. As a result of lower market shares for NMC
chemistries, demand for nickel, cobalt and manganese are about
20% lower in 2040 compared to the base case.

PAGE | 105

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

More rapid adoption of home energy storage could increase demand for nickel, cobalt andmanganese – but these increases are dwarfed by demand from EVs% change compared to base case in 2040

Mineral use for battery storage in alternative cases relative to the base case in the SDS
+ 80%
+ 60%
+ 40%
+ 20%

- 20%
- 40%

2040

2040

Rapid adoption of home energy storage

Early commercialisation of VFBs

Lithium

NickelCobaltManganese

CopperGraphite

SiliconVanadium
IEA. All rights reserved.

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Could mineral prices be an obstacle for further battery cost declines?
The average cost of lithium-ion batteries has fallen dramatically overthe past decade, reaching USD 137/kWh in 2020 (BloombergNEF,
2020). Further cost reductions are necessary for EVs to achieve theadoption rates observed in the SDS. In the near term, the US
Department of Energy has set a target of reaching USD 125/kWh by2022 for BEVs to attain cost parity with internal combustion engine
vehicles. Tesla expects to slash costs by half between 2020 and 2023
to achieve pack costs of around USD 60/kWh (Irvine & Rinaldo,2020). The SDS requires battery prices to reach USD 100/kWh by
2030.
Several automakers are scaling up battery production to drive further
cost reductions. For example, Tesla’s first Gigafactory in Nevada
began mass production of cells in January 2017, helping to reduce
battery production cost by 30%. In addition to scaling up production
volume, further cost reductions can be achieved by optimising cellfabrication to increase energy density, reducing manufacturing costs
and enhancing pack assembly efficiency (Ding et al., 2019).

Models used to project future battery costs typically rely on
production volume assumptions and technology learning rates.
However, the growing share of raw materials in total battery costs
implies that this approach based on economies of scale andefficiency improvement might not provide a good guide to future costdevelopments, as raw material costs may well develop in a different
direction from other cost components.
Given the importance of material costs in total battery costs, higher
mineral prices could have a significant effect on achieving industry
cost targets. For example, a doubling of lithium or nickel prices would
induce a 6% increase in battery costs. If these events happen at thesame time, the cost increase would eat up the anticipated learning
effects associated with a doubling of capacity.
It is therefore of paramount importance for governments and industry
to work to ensure adequate supply of battery metals to mitigate any
price increases, and the resulting challenges for clean electrification.

However, with major technological improvements achieved over the
past decade, raw materials now account for the majority of total
battery costs (50–70%), up from around 40-50% only five years ago(Argonne National Laboratory, 2020a; Pillot, 2017, 2019). Cathode(25–30%) and anode materials (8–12%) account for the largest
shares. Labour costs account for around 2–4%.
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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

High prices for rare earth elements could see a shift away from permanent-magnet motors
towards induction motors, increasing demand for copper or aluminium
Over 90% of the EVs marketed today use permanent-magnet
synchronous motors due to their high efficiency, compact size andhigh power density (Adamas Intelligence, 2021b; Pavel et al., 2017).
However, their use of REEs such as neodymium, praseodymium,dysprosium and terbium – upwards of 1 kg per motor – raises
concerns given the geographical concentration of raw material and

The use of permanent-magnet motors with less (or no) rare-earthmagnets could also reduce REE use. For example, the BMW i3 uses

processing in China, the lack of recycling pathways and high pricefluctuations. For example, the price of neodymium has surged overthe past six months from around USD 60/kg in June 2020 to overa “hybrid” motor that uses around half the REE. Induction motors use
no REEs, but require a substantial amount of copper (11–24 kg/motor) and are less efficient than those with permanent
magnets. They are already used in several BEV models, including
the Tesla Model S. There are options to also reduce copper use in
induction motors: for example, the Audi e-tron uses an aluminiumrotor induction motor. Switched reluctance motors are also REE-free,

USD 120/kg in February 2021.

but are still in the early stages of development.

Summary of motor types

There are several pathways to reducing REE use in EV motors:(i) improving material efficiency in magnet production to obtain
NdFeB magnets with less REE content but with similar performance;(ii) reducing the amount of NdFeB magnets in permanent-magnet
synchronous motors; (iii) substituting permanent-magnet motors withCurrent status andexamplesNeodymium, dysprosium,
dysprosium, terbium

Used in all HEV and most
PHEV and BEV
Some BEVs (e.g. Tesla S,
Mercedes B)

Permanentmagnet without
REE

No rare earths; but
significant copper oraluminium use
No rare earths; potentiallysome nickel and cobalt use

Prototypes using ferrite or
AlNiCo magnets

Switched
reluctance

No rare earths or copperFirst prototypes

Permanentmagnet
synchronous

REE-free motors.

Induction

Improved material efficiency in magnet production can reduce REEcontent in permanent magnets but with similar performance
characteristics. For example, material efficiency for neodymium andpraseodymium may improve by up to 30% between 2015 to 2030 ina permanent magnet of equal magnetic strength and cost (Pavel etal., 2017).

Mineral use

IEA. All rights reserved.
Note: HEV = hybrid electric vehicle.
Sources: Agamloh et al. (2020); Pavel et al. (2017); Widmer et al. (2015).

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Hydrogen

PAGE | 109

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Electrolysers that supply hydrogen and fuel cells that use it in vehicles are both major growthareas in the SDS, and present different mineral requirements
Global installed capacity of electrolysers and fuel cells in the SDS
Fuel cells

1 600

GW

GW

Electrolysers
24 000

1 200

18 000800

12 000

400

6 000

2020

2030

2040

2050

2020

STEPS

SDS

2030

2040

2050

IEA. All rights reserved.
Source: IEA (2020c).

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Hydrogen electrolysers and fuel cells could drive up demand for nickel, platinum and otherminerals, but the market effects will depend on the shares of the different electrolyser types
Estimated levelised demand for selected minerals in electrolysers and fuel cells today

kg per GWh output

10

1

0.1

0.01

0.001

0.0001

NickelZirconium

Alkaline electrolyser

NickelZirconium

Lanthanum

Yttrium

SOEC electrolyser (SOFC fuel cell)

Platinum

PalladiumPEM electrolyser

Iridium

Platinum
Fuel cell
IEA. All rights reserved.

Notes: PEM = proton exchange membrane; SOEC = solid oxide electrolysis cells; SOFC = solid oxide fuel cell. Normalisation by output accounts for varying
efficiencies of different electrolysis technologies. Full load hours of electrolysers assumed to be 5 000 hours per year.
Sources: Bareiß et al.(2019); Fuel Cells and Hydrogen Joint Undertaking (2018); James et al. (2018); Kiemel et al. (2021); Koj et al. (2017); Lundberg (2019); NEDO
(2008); Smolinka et al. (2018); US Department of Energy (2014; 2015).

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Alkaline and PEM, the two dominant types of electrolysers, have very different mineral
requirements; solid oxide electrolysers present fewer mineral concerns, but are less developed
Hydrogen is a versatile energy carrier that can be produced fromfossil fuels, biomass or electricity via electrolysis of water.
Electrolysers are a promising means of expanding the uses ofrenewable and nuclear electricity to include applications that benefit
from storing or using a gaseous source. However, there is uncertainty
about which of the three main types of electrolyser might dominate
the market.

Alkaline electrolysers
Alkaline electrolysis is a mature and commercial technology that has
been used since the 1920s in both small and large plants. However,very large plants have not been built in recent decades because they
were uncompetitive against hydrogen production from natural gas.
The largest plants being built today are around 10 MW, with a singlestack demonstration project of this size entering operation in Japan
in 2020. Compared with other electrolysis technologies,
manufacturing capacity for alkaline electrolysers is much larger, withan estimated 2 GW per year available today. European
manufacturers have published plans to expand existing plants toachieve a capacity of over 6 GW per year. In China, where the
manufacturing base is being developed rapidly, the cheaper andmore familiar alkaline technology is also dominant.

Alkaline electrolysers have low capital costs, partly because of theiravoidance of precious metals. However, current designs do require
nickel in quantities of more than one tonne per MW, or 1 000 tonnes
for a 1 GW electrolyser plant, similar to some of the largest sizes
currently proposed. Reductions in nickel demand for alkaline
electrolysers are expected, but nickel is not expected to be eliminatedfrom future designs. However, if today’s state-of-the-art design thatuse around 800 kg per MW were representative of future
requirements, and even if alkaline electrolysers dominate the market,
then nickel demand for electrolysers would remain much lower thanthat for batteries in the SDS. Nonetheless, in such a case, if nickel
prices rise strongly due to challenges in the battery supply chain,electrolyser costs would be affected. In addition to nickel, 1 MW ofalkaline electrolyser could today require around 100 kg of zirconium,
half a tonne of aluminium and more than 10 tonnes of steel, alongwith smaller amounts of cobalt and copper catalysts.

Proton exchange membrane (PEM) electrolysers
PEM electrolysers have the advantages of smaller size, more flexible
operation and higher-pressure output than alkaline, but are lessmature, more costly and currently have shorter lifetimes. However,PEM represents the majority of current hydrogen demonstration

PAGE | 112

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

projects outside China, partly because there are incentives forelectrolyser users to test the options and determine whether theoperational benefits of PEM are worth the additional costs comparedwith alkaline electrolysers.
The largest PEM facility – 20 MW – began operation in Canada in
2021, and others near this scale are in development in Europe.
Globally, PEM manufacturing capacity stands at less than 500 MW
per year, but two sites in Europe are under development to raise thisto more than 1 GW per year by 2023. As more experience is gained
and manufacturing scales up, capital costs are expected to decline

production. The primary mineral demands of SOECs are nickel(150-200 kg per MW), zirconium (around 40 kg per MW), lanthanum(around 20 kg per MW) and yttrium (less than 5 kg per MW). It is
expected that each of these quantities could be halved through better
design in the next decade, with technical potential to drop nickel
content to below 10 kg per MW. To enable comparison with otherelectrolysers, these quantities need to be adjusted downwards in linewith the higher efficiencies of SOECs.

significantly.
If PEM were to dominate the hydrogen market, it would increaseenergy-sector demand for platinum and iridium. PEM catalysts
currently use around 0.3 kg of platinum and 0.7 kg of iridium per MW.
Experts believe reductions to one-tenth of these amounts are
possible in the next decade in order to minimise costs (Kiemel et al.,2021). A separate approach in development, using anion exchange
membranes, could avoid the use of these metals altogether.

Solid oxide electrolysis cells (SOECs)
SOECs are currently being tested at smaller scales and have higher
efficiencies and low material costs. It is not expected that they will
come to dominate the market, but they have significant promise,
especially because they can operate in reverse as fuel cells and canbe integrated into other high-temperature processes or synthetic fuel
PAGE | 113

Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

In the SDS, platinum demand for vehicles in 2040 remains dominated by catalytic converters
and not fuel cells

tonnesDrivers of demand for platinum and palladium for vehicles in the SDS
800
700
600
500
400
300
200
100
2019

Expanded regulations

Palladium for catalytic converters

Fewer ICE sales

Fuel cell sales

Platinum for catalytic converters

Innovation to lower
fuel cell Pt needs

2040

Platinum for fuel cells
IEA. All rights reserved.

Note: Pt = platinum.

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Mineral requirements for clean energy transitions

The Role of Critical Minerals in Clean Energy Transitions

Major improvements that reduce the platinum intensity of fuel cells have been made in the past
decade, with the amount of platinum in fuel cell cars halving
In clean energy transitions, internal combustion engine vehicles
might be largely replaced by EVs, including fuel cell electric vehicles(FCEVs), with other important roles for non-vehicular transport andbiofuels. While the automotive sector is set to become a dominantsource of global demand for lithium, nickel and cobalt for EV
batteries, it already leads demand for platinum and palladium for use
in catalytic converters. For these so-called platinum group metals, a
key issue is whether new demand from fuel cells will offset declining
demand from internal combustion engine vehicles.

Fuel cells
While fuel cells for converting hydrogen to electricity have been in
production for many years, the introduction of commercial passenger
FCEVs has spurred innovation to reduce the use of platinum to limit
costs. In 2014 Toyota’s first-generation Mirai car used around 40g of
platinum, around three-quarters less platinum per kW of output thanthe 2008 prototype (James et al., 2018). The second-generation
Mirai, released in 2020, reduced this by roughly a further third per kW
and increased the maximum power output from 114 kW to 158 kW.
Plans are in place in Japan to reach 5g per car in 2040. Similartargets for reduced platinum loading per kW have also been set by
US DOE, including targets for trucks, which require three times more
power than cars. If these targets are met, demand for FCEVs in the
SDS would grow platinum demand to just over 100 tonnes by 2040.

Catalytic converters
Catalytic converters represent around 40% of global platinum
demand today, and are also the major source of demand for two otherplatinum group metals: rhodium and palladium. Despite all earlycatalytic converters using mostly platinum, gasoline-based systems
now have a palladium to platinum ratio of 5:1 or higher, partly
because palladium has been cheaper historically. Catalytic
converters for diesel engines use a more equal share of platinum andpalladium, while all systems use smaller quantities of rhodium forcontrolling nitrogen oxides.
The higher prevalence of catalytic converters in gasoline vehicles
means that palladium demand now outstrips platinum demand in theautomotive sector by between 200% and 300%. Tightening
regulations and responses to car emissions scandals have pushed
up palladium prices to double those of platinum per tonne. While
substitution between the metals is possible, it requires a redesign ofthe catalyst system and therefore needs more certainty about future
relative prices than exists today. In the SDS, an increase in the
coverage of emissions regulation to include all new cars by 2030,
coupled with continued sales of internal combustion engine,especially hybrids, keeps demand for platinum group metals for use
in catalytic converters above that for fuel cells by 2040.

PAGE | 115

Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Reliable supply of minerals

PAGE | 116

Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Introduction
In Chapter 2 we explored how the material-intensive nature of a clean
energy system is set to drive a huge rise in demand for criticalminerals. This naturally raises questions about whether this growth –in most cases well above the historical pace – can be supplied in a
reliable manner, and whether the environmental and social
consequences associated with mineral production can be managed
properly.
For some minerals, demand and supply were delicately balanced
before the pandemic, and there were expectations that supply
imbalances might emerge in the coming years. While Covid-induced
demand reductions alleviated some of these pressures, concerns
about the adequacy and affordability of future supply are everpresent as the world emerges from the crisis and many countries put
renewables and batteries at the heart of their economic stimulus
packages. The price rallies in the latter part of 2020 and early 2021
may have provided a preview of what could happen when the world
accelerates onto a decarbonisation pathway, although these priceincreases were not always linked to physical market balances.
If history is any guide, the market responds to strains on supply by
reducing demand, substitution or increasing supply. But this is
typically accompanied by price volatility, considerable time lags orsome loss of performance or efficiency. In the context of clean energy
transitions, inadequate mineral supply could result in more
expensive, delayed or less efficient transitions. Given the urgency of
reducing emissions, this is a possibility that the world can ill afford.
In this chapter we examine some of the major vulnerabilities that mayhinder adequate supply and lead to greater price volatility, focusing
on the five focus minerals (copper, lithium, nickel, cobalt and rareearth elements [REEs]) that play a particularly important role in manyclean energy technologies. We also consider the specific challenges
that each mineral faces. We then discuss policy approaches toensure reliable supply of minerals, drawing lessons from historicalepisodes of disruption as well as the IEA’s long-standing experiencein safeguarding oil market security. Finally, the chapter assesses thepotential contributions from secondary supply, via recycling, anddiscusses what can be done to scale up recycling to reduce primary
supply requirements and in turn security risks.
How policy makers and companies handle the challenges aroundreliable and sustainable supply will determine whether criticalminerals are a vital enabler of clean energy transitions or a bottleneckin the process.

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

In the SDS, the required level of supply growth for most minerals is well above the levels seenin the past decadektAnnual average total demand growth for selected minerals by scenario
600

60

240

30

400

40

160

20

200

20

80

10

2010-20 2020-40 2020-40(STEPS) (SDS)

2010-20 2020-40 2020-40(STEPS) (SDS)

2010-20 2020-40 2020-40(STEPS) (SDS)

2010-20 2020-40 2020-40(STEPS) (SDS)

CopperLithium

NickelCobaltIEA. All rights reserved.

Notes: Total demand includes both demand from clean energy technologies and other consuming sectors. kt = thousand tonnes; STEPS = Stated Policies Scenario;
SDS = Sustainable Development Scenario.
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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Meeting primary demand in the SDS requires strong growth in investment to bring forward new
supply sources over the next decadeCommitted mine production and primary demand for selected minerals
Lithium

30

25

20

Cobalt

3 200

kt

35

kt of lithium carbonate equivalent

Mt

Copper

400

2 400

300

1 600

200

800

100

15
2020 2022 2024 2026 2028 2030

2020 2022 2024 2026 2028 2030

Production

Under construction

OperatingPrimary demand

STEPS

SDS

2020 2022 2024 2026 2028 2030

IEA. All rights reserved.
Notes: Primary demand is total demand net of recycled volume (also called primary supply requirements). Projected production profiles are sourced from the S&P
Global Market Intelligence database with adjustments to unspecified volumes. Operating projects include the expansion of existing mines. Under-construction
projects include those for which the development stage is indicated as commissioning, construction planned, construction started or preproduction. Mt = million
tonnes.
Source: IEA analysis based on S&P Global (2021).
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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Current supply and investment plans are not yet ready for accelerated energy transitions
In today’s markets, most minerals that are vital to clean energy
technologies are relatively well supplied. Prices for certain minerals
have risen strongly since the second half of 2020, with some reaching
multi-year highs. This was due to expectations of strong future
growth, as well as demand recovery in the People’s Republic of China(“China”). While it is too early to brace for the next price cycle, if weslightly extend the time horizon, we see ample reasons to be vigilant
about the ability of supply to meet demand – especially as many
governments redouble efforts to accelerate energy transitions.
In the SDS, the scale of demand growth is well above the levels seen
in recent decades. For example, in the period to 2040 annual average
demand growth for nickel and cobalt is two and five times higher
respectively than the levels seen in the 2010s. In the case of copper,
the SDS sees a continuation of strong demand growth in the 2010s
through the coming decades.
The picture for near-term supply is mixed. Some minerals such aslithium raw material and cobalt are expected to be in surplus in thenear term, while lithium hydroxide, battery-grade nickel and certain
REEs (e.g. neodymium and dysprosium) might face tight supply inthe years ahead as demand rises. However, after the medium term,
projected demand surpasses the expected supply from existing
mines and projects under construction for most minerals, meaningthat significant additional investment will be needed to support
demand growth.
This is especially the case to meet requirements in the SDS. Current
supply and investment plans are geared to a world of gradual,
insufficient action on climate change (the STEPS trajectory), but not
sufficient to support accelerated energy transitions. While there are ahost of projects in the pipeline at varying stages of development,
several risk factors may, if unchecked, increase the possibility ofmarket tightness and new price cycles, slowing energy transitions.
These include (i) higher geographical concentration of production, (ii)a mismatch between the pace of change in demand and the typicalproject development timeline, (iii) the effects of declining resource
quality, (iv) growing scrutiny of environmental and social performanceof production, and (v) higher exposure to climate risk such as water
stress, among others (which are explored in more detail in thefollowing pages).

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Geographical concentration: Analysis of project pipelines indicates that, in most cases, thegeographical concentration of production is unlikely to change in the near term
Major producing countries of selected minerals, 2019 and 2025
100%

80%

OthersArgentina

Argentina

China
OthersOthersChina

OthersOthersOthersOthersRussiaAustralia

OthersRussiaAustralia

Chile
DRC

40%

Canada

DRC

China
Peru

Peru

Philippines

Australia

20%
Chile

Chile

2019

2025
CopperAustralia

Australia
US

CanadaRussiaRussiaChina

OthersMyanmar

US

Chile
60%

OthersMyanmarPhilippines

DRC

DRC
China

China

2019

2025

Australia

2019

2025
LithiumIndonesia

Indonesia

2019

2025
Nickel2019

2025
CobaltREEs
IEA. All rights reserved.

Note: Due to the availability of data on projections for future production, REEs here comprise neodymium, praseodymium, terbium and dysprosium only. DRC =Democratic Republic of the Congo; US = United States; Russia = Russian Federation.
Source: IEA analysis based on the project pipeline in S&P Global (2021) complemented by World Bureau of Metal Statistics (2020) and Adamas Intelligence (2020)(for REEs).
PAGE | 121

Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Project development lead times: Market tightness can appear much more quickly than new
projects
Global average lead times from discovery to production, 2010-2019
Global average, 2010-2019
Discovery, exploration to feasibility
12.5

3

6

9

Construction
planning

Construction
to production

1.8

2.6

12

15

18 Years

12

16

20 Years

Average observed lead time for selected minerals (from discovery to production)
Lithium (Australia)
Lithium (South America)
Nickel (Sulfide)
Nickel (Laterite)
Copper
4

8

IEA. All rights reserved.
Note: Global average values are based on the top 35 mining projects that came online between 2010 and 2019.
Source: IEA analysis based on S&P Global (2020), S&P Global (2019a) and Schodde (2017).

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Resources: There is no shortage of resources. Economically viable reserves have been
growing despite continued production growth
Reserves and production for selected mineral resources
NickelCopper
12

0.3

75

10

0.2

5

0.1

0.4

15

2011 2013 2015 2017 2019

1 000

80

9

750

60

50

6

500

40

25

3

250

20

2011 2013 2015 2017 2019

Production (right axis)

Mt

100

20

Mt

Mt

Lithium

2011 2013 2015 2017 2019
Reserves
IEA. All rights reserved.

Sources: USGS (2021); USGS (2020).

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Resources: However, declining ore quality poses multiple challenges for extraction andprocessing costs, emissions and waste volumes
Average ore grade in Chile and estimated energy intensity by quality
Estimated energy intensity

1.2

Energy use (GJ per Mt copper)

Copper ore grade (%)

Copper ore grade in Chile by production route

1.0

0.8

0.6

0.4
2005

40

30

20

10

2007
Concentrate

2009

2011

2013

Heap leaching

2015

2017
Average

2019

1.0%

0.8%

Concentrate

0.7%

0.5%

Heap leaching
IEA. All rights reserved.

Notes: Energy use for concentrate covers mine, concentrating plant, smelter, refinery and services. For heap leaching, energy use covers mine, leaching, solvent
extraction, electro-winning processes and services. GJ = gigajoule.
Source: IEA analysis based on COCHILCO (2019) and Rötzer and Schmidt (2020).
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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Scrutiny of ESG issues: Growing imperative to improve environmental performance could also
put upward pressure on production costs of energy-intensive mining and processing activities
Share of energy cost in total mining cash cost and electricity intensity for selected materials
Share of electricity cost in total refining/smelting cost

Share of energy cost in total mining cash cost
25%

50%

20%

40%

15%

30%

10%

20%

5%

10%

0%

CopperNickelLithium

Zinc

Zinc

Iron ore

Aluminium Copper

Nickel

Steel
(EAF)

Steel
(BOF)

IEA. All rights reserved.
Notes: ESG = environmental, social and governance; EAF = electric arc furnace; BOF = basic oxygen furnace. Energy and electricity costs show global averagevalues, and can vary by region and operational practice.
Source: IEA analysis based on S&P Global (2021) for mining, BHP (2011) for iron ore and Eurometaux (2020) for refining/smelting.
PAGE | 125

Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Scrutiny of ESG issues: The majority of current production volumes come from regions withlow governance scores or high emissions intensity
Distribution of production of selected minerals by governance and emissions performance, 2019100%
Low governance score andhigh emissions intensity

80%

Low governance score andlow emissions intensity

60%

High governance score andhigh emissions intensity

40%

20%

High governance score andlow emissions intensity
CopperLithium

NickelCobaltIEA. All rights reserved.

Notes: Analysis using the World Bank Worldwide Governance Indicator (as a proxy for governance) and electricity CO2 intensity (as a proxy for emissions
performance). Composite governance rank scores below 50 were classified as low governance; electricity CO2 emissions intensity above 463 g CO2/kWh (global
average value in 2019) was classified as high emissions intensity.
Source: World Bank (2020), IEA (2020).
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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Climate risk: Mining assets are exposed to growing climate risks and water stress
Location of copper and lithium mines and water stress levels, 2020

IEA. All rights reserved.
Note: The exact water stress levels vary by location. While we assessed the share of mines located in water stress areas according to granular regional
representations (shown on the following page), we aggregated them at the sub-national level on the map for the sake of simplification. Water stress levels are as
defined in the Aqueduct 3.0 dataset according to the ratio of total water withdrawals over the total available surface and groundwater supplies.
Source: IEA analysis based on WRI Aqueduct 3.0 dataset.

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Climate risk: Around half of global lithium and copper production is concentrated in areas ofhigh water stress
Share of production volume by water stress level for selected minerals, 2020
CopperLow (< 10%)

Lithium

Low-Medium (10-20%)

Zinc

Medium-High (20-40%)

NickelHigh (40-80%)
BauxiteExtremely high (> 80%)and Arid

Cobalt
0%

20%

40%

60%

80%

100%
IEA. All rights reserved.

Note: Water stress levels are as defined in the Aqueduct 3.0 dataset according to the ratio of total water withdrawals over the total available surface and groundwatersupplies.
Source: IEA analysis based on WRI Aqueduct 3.0 dataset.
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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Several vulnerabilities may hinder adequate mineral supply and lead to greater price volatility
As countries step up their climate ambitions, securing reliablesupplies of critical minerals may have major impacts on theaffordability of clean energy technologies and the prospects forcountries to nurture a clean technology manufacturing industry.
Several risk factors are in play.
Geographical concentration: Today’s production and processing
operations for many energy transition minerals are highly
concentrated in a small number of countries, making the systemvulnerable to political instability, geopolitical risks and possible export
restrictions (see Chapter 1).
Our analysis of today’s project pipeline indicates that this picture isunlikely to change in the near term. With the exception of copper,
where planned production growth in the United States, DRC andIndonesia helps diversify the pool of supply, most of the output growth
for lithium, nickel and cobalt are expected to come from today’s major
producers, implying a higher degree of concentration in the years
ahead. Under these circumstances, physical disruptions(e.g. earthquakes, tsunamis and flooding)or regulatory andgeopolitical events in major producing countries can have large
impacts on the availability of minerals, and in turn on prices. Recent
events, such as Indonesia’s ban on nickel ore export and China’s
export ban on REEs, serve to highlight these concerns. Morerecently, the military coup in Myanmar has raised concerns oversupply disruption of heavy REEs, fuelling a surge in prices (Reuters,
2021a). Natural disasters have also become one of the most frequentcauses of mineral supply disruption, third only to accidents and labour
strikes (Hatayama and Tahara, 2018).
Project development lead times: The recent pick-up in investment
in many minerals offers some support for near-term supply, but
additional investment will be required to satisfy rising demand,
especially in the SDS. Despite growing momentum behind energy
transitions, uncertainty over the trajectory of future demand may holdback company investment decisions needed to achieve orderly
energy transitions. Long project lead times exacerbate the risk of amismatch in timing between demand and the industry’s ability to bringon new projects.
Analysis of major mines that came online between 2010 and 2019shows that it took 16.5 years on average to develop projects fromdiscovery to first production, although the exact duration varies bymineral, location and mine type (S&P Global, 2020). On average, It
took more than 12 years to complete exploration and feasibility
studies, and 4-5 years for the construction phase. These long leadtimes raise questions about the ability of supply to ramp up output if
demand were to pick up rapidly (although some supply sources suchas expansion from existing mines and artisanal small-scale mining
have shorter lead times). If companies wait for deficits to emerge

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

before commiting to new projects, this could lead to a prolonged
period of market tightness and price volatility.
A further complication is that mining is only one part of the value
chain. Whether investment occurs in a co-ordinated manner
throughout the value chain is another significant issue, as pricesignals may not be passed efficiently along the value chain. The
recent rise in lithium carbonate prices (and a possible tightening oflithium hydroxide supply) amid ample supply of lithium raw material
is one indication of possible strains arising from different parts of thevalue chain. REE processing is another example of complication,
where growth in mined output does not necessarily guarantee greater
supply of certain rare earth oxides in high demand (see section on
REEs).
Resource quality: Like other commodities, minerals are not freefrom concerns over the availability of resources. Resources are
known metallic concentrations with reasonable prospects foreventual economic extraction, whereas reserves are theeconomically mineable part of resources under today’s
circumstances. There are generally no signs of shortages in theseareas: despite continued production growth over the past decades,
economically viable reserves have been increasing for many energy
transition minerals. For example, lithium reserves increased by 30%
between 2011 and 2019, while production expanded two-and-a-halftimes. The volume of copper reserves also rose by 30% in the last 10
years. This is because reserves have been replenished by

exploration activities triggered by growing demand. In Australia
lithium reserves increased by 70% in 2017 as price spikes in 201617 motivated the country to tap its under-explored resources.
Concerns about resources relate to quality rather than quantity. In
recent years, ore quality has continued to decline acrosscommodities as high-quality deposits (and higher-grade parts of thedeposits) are exploited earlier. Technological improvement thatallows the exploitation of lower-grade deposits has also played a role.
For example, the average copper ore grade in Chile has decreasedby 30% over the last 15 years. This brings about multiple challenges.
Extracting metal content from lower-grade ores requires moreenergy, exerting upward pressure on extraction and processing costs
and carbon dioxide (CO2) emissions. Lower-grade ores also generatelarger amounts of rock waste and tailings that require careful
treatment. This means that, over time, strengthened efforts would beneeded to offset underlying upward pressures on production costs.
Growing scrutiny of ESG issues: While minerals play a vital role insupporting clean energy transitions, energy is also crucial in the
production of minerals. Due in part to declining resource quality, theproduction and processing of energy transition minerals are energyintensive, involving higher emissions to produce the same quantity of
product. In recent years, mining and processing companies have
faced growing pressure to address these and other issues related totheir social and environmental performance (see Chapter 4). A
growing number of consumers and investors are requesting

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

companies to disclose targets and action plans on these issues.
Tightening scrutiny of ESG issues could have an impact on costs andsupply prospects, especially in areas reliant on artisanal mines orwhere requirements are uneven across different jurisdictions or types

located in high water stress and arid areas. This has triggeredcompanies to invest in desalination capacity to mitigate the risk.
Moreover, the share of mines located in high water stress areas is
set to increase over time. As climate change causes more frequentof company. For example, around 10-15% of copper, lithium andcobalt production and almost half of nickel production in 2019 camefrom regions with low governance scores and high emissions
intensity.

droughts and alters water flows, the availability of high-quality water
resources will become a crucial factor affecting stable minerals

Exposure to climate risks: In recent years, a combination of more
frequent drought events in major producing regions and higher water
intensity in ore processing has brought the critical importance ofsustainable water sourcing to attention. For example, in 2019 theworst drought in more than 60 years severely affected some
operations in Chile, with similar events having occurred in Australia,
Zambia and others. The El Teniente mine, the largest undergroundcopper mine in Chile, implemented water rationing to deal with severe
droughts (CRU, 2020a).
Among minerals, copper and lithium are particularly vulnerable towater stress given their high water requirements. Over 50% of today’slithium production is concentrated in areas with high water stresslevels. Some 80% of copper output in Chile is produced in mines

supplies.
In addition to water shortage, several major producing regions suchas Australia, China, and Africa are also subject to other forms ofclimate risk, including extreme heat or flooding, which posechallenges to ensuring reliable and sustainable supplies. For
example, flooding can lead to spills of hazardous waste from minesites or waste storage, and tailings dam failure, with extensive
environmental damage (see Chapter 4; Rüttinger et al., 2020). Thisrequires companies to assess physical risks from climate change intheir operations and integrate climate resilience planning in theirsustainability strategies. For example, BHP periodically reviews thepotential vulnerabilities of their operating assets and investment
portfolio to climate risks, and devises strategies to address them.

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Supply prospects forthe focus minerals

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Each mineral faces a different set of challenges in ensuring adequate supply
MineralCopperLithium

Key challenges••••

Challenging to substitute due to its superior performance in electrical applications
Mines currently in operation are nearing their peak due to declining ore quality and reserves exhaustion
Declining ore quality exerts upward pressure on production costs, emissions and waste volumes
Mines in South America and Australia are exposed to high levels of climate and water stress•

Possible bottleneck in lithium chemical production as many smaller producers are financially constrained after years ofdepressed prices
Lithium chemical production is highly concentrated in a small number of regions, with China accounting for 60% of global
production (over 80% for lithium hydroxide)
Mines in South America and Australia are exposed to high levels of climate and water stress•••

Nickel•••CobaltRare earth
elements

•
•
•
•
•

Possible tightening of battery-grade Class 1 supply, with high reliance on the success of HPAL projects in Indonesia; HPAL
projects have track records of delays and cost overruns
Alternative Class 1 supply options (e.g. conversion of NPI to nickel matte) are either cost-prohibitive or emissions-intensive
Growing environmental concerns around higher CO2 emissions and tailings disposal
High reliance on the DRC for production and China for refining (both around 70%) set to persist, as only a few projects areunder development outside these countries
Significance on artisanal small-scale mining makes the supply vulnerable to social pressures
New supply is subject to developments in nickel and copper markets as some 90% of cobalt is produced as a by-product ofthese minerals
Dominance of China across the value chain from mining to processing and magnet production
Negative environmental credentials of processing operations
Differences in demand outlooks for individual elements bring risk of price spikes for those in high demand (e.g. neodymium)and slumps for those in low demand (e.g. cerium)

Notes: HPAL = high-pressure acid leaching; NPI = nickel pig iron.

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Copper: From resource to consumer

Resources

Processing

Scrap

Sulfide ore

Pyrometallurgy(Electrorefining)

Oxide ore

Total copper demand by sector and scenario
Mt

Copper supply chain
40

100%

30

75%

Hydrometallurgy(Sx-Ew process)End usesHydrogenEVs and storage

20

50%

10

25%

Copper cathodePrimary
products

Other sectors

Semi-fabricated products(castings, sheet, tube, wire rod)

Electricity networks
Low-carbon power
generation
Share of clean
energy technologies(right axis)

2020 2030 2040 2030 2040

Industry, construction, transport,
electrical applications

STEPS

SDS
IEA. All rights reserved.

Notes: EVs = electric vehicles. Sx-Ew = solvent extraction and electrowinning. High-grade oxide ore is processed in pyrometallurgy. Demand does not include thevolume reused in a semi-fabricated form.

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Copper: Copper is the most widely used mineral in clean energy technologies
Thanks to its unmatched thermal and electrical conductivity, copper
is widely used in a broad range of electronic and industrial
applications. Its attributes make it challenging to substitute.

followed by Chile, Japan and Russia. However, as China accounts
for 50% of global demand for refined copper, it also imports refinedcopper products from abroad.

The western part of South America, notably Chile and Peru, is thelargest producer of mined copper, responsible for 40% of global

Copper demand for clean energy technologies remains one of thelargest both by weight and monetary value. Clean energy

output. China, the DRC, the United States and Australia are the othertechnologies are also the fastest growing segment for copper
demand. Their share of total copper demand rises from 24% today to
30% by 2040 in the STEPS and 45% in the SDS.

major producing countries.
There are two main types of copper ore; copper sulfide (about 80%
of production) and copper oxide (about 20%). Sulfide ore isprocessed via a pyrometallurgical process (known as smelting); theore is crushed and ground, then transformed into concentrates, which
are then exported to China and other countries to produce refined

Copper processing processes
Pyrometallurgical processconcentrateOre

copper through electrorefining. Oxide ore is processed through ahydrometallurgical process known as Sx-Ew (solvent extraction andelectrowinning), which extracts copper from the ore to the solvent andthen separates copper cathode from the solvent by electrowining. SxEw processes are usually conducted near mining sites. In addition tomining, recycled scrap also plays a role. Depending on the purity,some scrap (e.g. discarded metal in manufacturing processes) iseasily remanufactured, whereas less pure scrap (e.g. post-consumer
products) needs to go through a pyrometalliurgical process. China is
the largest copper refining country, with around 40% market share,

Crushing
Grinding

Flotation

Smelting
Converting
Refining

tailings

slagElectrorefining

CoppercathodeHydrometallurgical processraffinate
Ore
Acid

Leaching

spent electrolyte
Solvent
extraction

pregnant leach solution

Electrowinning

Coppercathodeforward electrolyte

IEA. All rights reserved.
Sources: Hawker et al. (2014); Forsén et al. (2017).

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Copper: New projects under development could bring a sizeable boost to near-term supply, butmore is needed to support rising demand

greater than 10 years ago.
However, past trends may not be a good guide to what could happen
in the coming decades. Production at today’s major copper mines has
already peaked or is expected to peak in the early 2020s due todeclining ore quality and reserve exhaustion. For example, theworld’s largest copper mine, Escondida in Chile, appears to havereached a peak and its production in 2025 is expected to be at least
5% lower than today (S&P Global, 2021).

expected to continue its dominant position in the near term, with its
capacity growth to 2025 accounting for nearly half of all planned
additions to global capacity. As China’s processing share increases(but not its mining share), the country is set to have more influenceon the trade and pricing of intermediate products.
Beyond the near term, few projects are planned to start operations in
the late 2020s, while output from exsting mines is expected tocontract further. Meeting rising demand in the longer term would
require continued new project development.

Primary supply requirements for copper by scenario
Mt

Copper supply has been expanding rapidly over the past decades tosatisfy rising demand caused by strong economic growth in emerging
and developing economies. More than 250 mines currently operate
in nearly 40 countries, producing around 21 Mt of copper. This is 30%

On the back of optimism for copper’s role in the energy transition,
investment has been picking up. A few large projects, such as
Quellaveco in Peru and Kamoa-Kakula in the DRC are underconstruction. Several expansion projects such as Oyu Tolgoi in
Mongolia are also in progress. These projects could deliverconsiderable near-term supply, if completed on schedule.
While Chile and Peru remain the largest producers through to 2025,
the picture is set to become slightly more diverse, with the DRC andIndonesia increasing their production. As for processing, China is
PAGE | 136

40
30

Secondary supply

20

Primary supply
requirement

10

2020

2030

2040

STEPS

2030

2040
SDS

IEA. All rights reserved.

Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Copper: Declining ore quality exerts upward pressure on production costs and emissions,requiring additional efforts for technology innovation and efficiency improvement
While there is no shortage of resources (e.g. the size of copper
reserves has increased by 30% over the last 10 years), developing
new projects has become challenging due mainly to declining ore
quality in major producing regions. As noted above, the average
grades of concentrate in Chile have decreased by 30% since 2005.
The feed for hydrometallurgical processes has also deteriorated inquality. Currently the copper content in Chilean ore is about 0.7% on
average. The deposits in some major mines are depleting anddevelopments are moving towards the fringes of exploited deposits.
Extracting metal content from lower grade ores gives rise to
additional cost and energy use, not just for on-site procesing, but also
for operations along the value chain (e.g. dust suppression andreclamation). Moreover, the deeper the production site, the more costand energy are required.
While cost escalations are a major challenge for the copper industry,
the impacts of resource depletion can be offset by technology
innovation. Until the late 19th century, average ore grades were 1020%; then they decreased to 2-3% in the early part of 20th century(Henckens and Worrell, 2020). More recently, technologies such as
aerial surveys, satellite imagery, geographic information systems andcomputer models have unlocked new supplies in a cost-effective

manner, enabling a dramatic increase in output (Rötzer and Schmidt,
2018). In particular, the emergence of Sx-Ew processes since the1970s has allowed greater efficiency in dealing with oxide resources.
This process accounts for 20% of global copper production today. As
with other minerals, continued technology innovation is pivotal tosustain affordable copper supply.
There are also environmental challenges. Major copper producing
areas in South America face water scarcity, as discussed above.
Moreover, hazardous elements such as arsenic are highly concernedin the copper industry. Deteriorating ore grades bring a problem ofhigher impurity including arsenic content, which can cause serious
water and air pollution. The average arsenic content in Chilean
concentrate has doubled since the beginning of 2000s, leading tohigher costs to manage wastewater and mine tailings. Smelters also
face challenges to remodel their processes to meet theenvironmental regulations related to arsenic. For example, newsmelters in Chile are required to capture 99.97% of arsenic emissions(COCHILCO, 2018). Some smelters are planning to redesign theirprocesses in response, and others are conducting R&D for copperarsenic separation technologies.

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Lithium: From resource to consumer
Lithium supply chain

Total lithium demand by sector and scenario

Chile, Argentina
Brine

Spodumene ore

ktMining/extraction

Australia

1 200

100%

900

75%

Beneficiation
Evaporation/
chemical process

Processing

China

EVs and storage

Chemical process
Lithium carbonate

Lithiumchemical600

OthersBattery cathode(low Ni content)

50%
Share of clean
energy technologies(right axis)

Lithiumcarbonate

300

Lithium hydroxide

End uses

Other sectors

Battery cathode(high Ni content)

Greases

25%2020 2030 2040 2030 2040
STEPS

SDS
IEA. All rights reserved.

Note: Some spodumene ore is directly consumed for ceramic material.

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Lithium: The fastest-growing mineral, driven by surging EV deployment
Lithium is mainly used for lithium-ion batteries, followed by ceramics,
glass and grease. It is supplied from two very different types ofresource: brine and spodumene (a type of pegmatite).
Brine resources are located in dry areas such as Atacama(northwestern South America) and western China, where the dry
climate accelerates brine evaporation and accumulates mineralelements including lithium. Chile has been the largest producer frombrine resources. Production occurs in three steps: (i) accumulating
lithium contents to about 1-6% through a solar evaporation process
in large pools for hundreds of days; (ii) removing other elements(e.g. boron, magnesium) via chemical processes; and (iii) extracting
lithium carbonate from the solvent. Lithium carbonate is widely tradedas the main material for battery cathodes, especially for relatively low
nickel-content cathodes. Another major lithium product is lithiumhydroxide, which is made through an additional process of adding
slaked lime to heated lithium carbonate.
Spodumene is a mineral composed of lithium and aluminium, and its
mines are mainly located in Australia, where lithium concentrate is
produced via beneficiation processes. Concentrates are mainly
exported to China by offtake contracts and refined to lithium
carbonate or lithium hydroxide. Although brine was the dominantsource of lithium historically, soaring demand for lithium has recently

spurred the development of spodumene mines. As a result, Australia
has emerged as the largest lithium mining country since 2017.
With regard to refining, China accounts for close to 60% of global
lithium chemical production, importing increasing volumes ofconcentrate from Australia. Some companies in Australia are
pursuing an integrated scheme to produce lithium chemicals in the
country. These are likely to gain traction as producing lithiumhydroxide directly from spodumene is less expensive than convertingbrine resources to carbonate and then to hydroxide.
Lithium demand for clean energy technologies is growing at thefastest pace among major minerals, largely reflecting the dramaticincrease in EV deployment. While other minerals used in EVs are
subject to uncertainty around different chemistry choices, lithium
demand is relatively immune to these risks, with additional upsides if
all-solid-state batteries are widely adopted (see Chapter 2). Clean
energy technologies represent around 30% of total lithium demand
today (up from a minuscule share in 2010), and the rapid uptake of
EV deployment raises the share to some 75% in the STEPS and over
90% in the SDS by 2040. While lithium carbonate is currently themain chemical product used in EVs, lithium hydroxide is expected totake its place as it is more suitable for battery cathodes with highnickel content.

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Lithium: The adequacy of lithium raw material supply depends critically on the demand
trajectories. New extraction technologies could help broaden the supply pool
As EV deployment started to take off in earnest in the mid-2010s,
surging demand sent major shockwaves through the lithium market,
lifting prices threefold between 2015 and 2017. This triggered a wave
of investment in supply in Australia and other regions, which resulted
in the plunge in prices seen in the late-2010s (lithium resources canbe developed with relatively short lead times compared to otherenvisaged in the SDS. Satisfying SDS demand would require allthese projects to be developed and be complemented by additional
exploration. There is a host of projects at varying stages ofdevelopment, with their combined production totalling around 2 500
kt of lithium carbonate equivalent per year.

Primary supply requirements for lithium by scenario

The production expansion is set to continue until the mid-2020s, withmajor producers (both brine and spodumene resources) planning to
expand their capacity through to the medium term. Both the largest
mine and brine production site, Greenbushes in Australia and Salarde Atacama in Chile, are expanding their production capacity by morethan 2.5 times. Additional production from these two sites amounts to
320 kt of lithium carbonate equivalent per year, equivalent to over
70% of today’s global production. In addition, at least six projects arescheduled to start operations by 2025, including Cauchari-Olaroz in
Argentina and Maricunga in Chile. Whether these supplies are
sufficient to support demand critically depends upon how demand
evolves.
Expected production volumes from existing mines and projects underconstruction look able to cover projected demand in the STEPS until
the late 2020s, but they are not sufficient to support demand growthktminerals).

1 500

Secondary supply

1 000

Primary supply
requirement
500

2020

2030

2040

STEPS

2030

2040

SDS

IEA. All rights reserved.

New types of resources and development technologies may play animportant role in the decade to come. Efforts are ongoing to recoverlithium from unconventional resources. For example, processing clay

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

New technologies for lithium production

minerals is simpler and less energy-intensive than spodumene as
calcination processes are not needed, but their lower ore grades andcomplicated compositions pose challenges for commercialisation. At
least three clay mineral projects are under development in the United

Technology

Mechanism

Developer

Unconventional resourcesStates. Rio Tinto has invested AUD 14.5 million (USD 11 million) in apilot project to produce lithium from waste rock at the Boron mine site
in California (The West Australian, 2021).
Direct lithium extraction technologies are also on the horizon. Insteadof evaporating all the water and chemically removing all the
impurities, this process extracts the lithium directly from an
unconcentrated brine to produce a lithium eluate, which can beprocessed to lithium chemicals without evaporation ponds (Grant,2019). This holds the potential to reduce cost and lead times as brine
accumulation takes more than a year and represents a major part ofthe capital expenditure of a brine project. Some developers arefocusing on technology to recover lithium from oil and gas produced
water and geothermal brine. Together, these new technologies could
widen the pool of future lithium supply.

Sedimentaryrocks

Lithium production from hectorite(clay mineral), lepidolite andsearlesite

Lithium Americas,
Lepidico, Lithium
Australia, ioneer

Waste rocks

Lithium production from waste of
borate production

Rio Tinto

Direct lithium extraction(Brine/oil and gas produced water/geothermal water)
Phosphate
precipitation

Lithium phosphate precipitatedupon addition of phosphoric acid

POSCO

Ion
exchange

Lithium ions intercalated intolayers of metal hydroxide or oxide

Dow, FMC, Simbol,
Eramet, JOGMEC,
Neometals

Solvent
extraction

Selectively recover lithium from
diluted water using solvent

TenovaNano
filtration

Lithium ions concentrated bymembrane

MGX

OthersUtilising subsurface technology
expertise, etc.

NeoLith Energy(Schlumberger)

Sources: Kumar (2019); JOGMEC (2019a).

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The Role of Critical Minerals in Clean Energy Transitions

Lithium: The supply of lithium chemicals, lithium hydroxide in particular, could become abottleneck
While lithium raw material is expected to remain well supplied in thenear term, major strains are likely to come from the midstream value
chain that converts raw materials into lithium chemicals. Only ahandful of companies can produce high-quality, high-purity lithiumchemical products – five major companies are responsible for threequarters of global production capacity. While several planned
expansion projects are in the pipeline, there is a question mark over
how rapidly their capacity can come online to keep up with demand
growth given that there are few deep-pocketed companies that canfinance expansion projects, especially after several years ofdepressed prices. Many smaller companies are financiallyconstrained and some have delayed planned expansion projects.
The recent price rally for lithium carbonate partly reflects the potential
concerns. Looking ahead, the strains could be particularly great forlithium hydroxide, which is set to drive future demand growth (as it ishydroxide was produced in China. Some projects to produce lithiumhydroxide are being planned in Australia, the United States, theEuropean Union and others, which could help diversify sources ofsupply, if successfully implemented.
As in the case of copper, mounting water stress poses a further
challenge for lithium raw material producers in drought-concerned
regions such as South America and Australia. In the case of brine
resources, production operations may have adverse impacts on thewater balance in the region. Recent studies identified a negative
correlation between the continuous expansion of lithium extraction
activities and the soil moisture index, a proxy for drought conditions(Liu et al., 2019). New direct lithium extraction technologies could
help alleviate pressure around water sourcing.

favoured for high-nickel cathode chemistries).
A higher level of concentration is another challenge. Close to 60% of
global lithium chemicals are produced in China. Chinese companies
have also invested in companies in South America. For example,
Tianqi Lithium, a large lithium chemical producer in China, acquireda minority stake (23.8%) in Chilean company SQM. The picture iseven more skewed for lithium hydroxide – in 2019 over 80% of lithium
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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Nickel: From resource to consumer
Nickel supply chain

Total nickel demand by sector and scenario

Russia, Canada,
Australia

Processing

Primary
products

End uses

Oxide ore

Sulfide ore

Limonite

Pyrometallurgy

Class 1 nickel(> 99.8%)(e.g. metal)

BatterycathodeHydrometallurgy(e.g. HPAL)kt

MiningIndonesia, Philippines,
New Caledonia
8 000

100%

6 000

75%

Saprolite

China,
PyroIndonesia,
metallurgy JapanClass 2 nickel(< 99.8%)(e.g. ferronickel, NPI)

4 000

50%

2 000

25%

Other sectors

HydrogenEVs and storage

Low-carbon power
generation
Share of clean
energy technologies(right axis)

Stainless steel, industrial
alloys, etc.

2020 2030 2040 2030 2040
STEPS

SDS
IEA. All rights reserved.

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Nickel: A versatile mineral used in a wide range of clean energy technologies
Historically nickel has been used mainly for industrial alloys, to whichit contributes corrosion resistance and workability. Around two-thirdsof stainless steel currently contains nickel. However, lithium-ion
batteries have recently emerged as a new source of demand. They
account for around 7% of nickel demand today.
There are two types of primary nickel products: high-purity Class 1
products (containing 99.8% nickel or above) and lower-purity Class 2
products (containing less than 99.8% nickel). Battery cathodes neednickel sulfate, which is synthesised from Class 1 products.
There are complex relationships between different resource types(sulfide, saprolite and limonite) and product types (Class 1 andClass 2).

mainly absorbed in clay in the ore rather than in minerals. Saprolite
has a relatively higher grade (1.8-3.0%) than limonite (0.8-1.8%). Dueto these differences, methods of producing nickel products differ by
resource type.
Sulfide ore is suitable for pyrometallurgical processes, as ore grades
are relatively high and it is easy to concentrate the grade by flotation.
Currently sulfide ore is the main source of high-purity Class 1
products. Limonite ore is usually processed via hydrometallurgicalprocesses such as HPAL (high-pressure acid leaching), as it is easy
to leach the absorbed nickel from clay and has less acid-consuming
magnesium than saprolite. Also, there are many existing limonite
tailings, which were once discarded during saprolite mining before
HPAL technology became commercialised. Although the number of

Sulfide deposits are mainly located in Russia, Canada and Australia,
and have been the main source of supply for over a century. Nickel
is concentrated in the ore at a relatively high grade, typically in therange of 0.4-3.2%.

operating HPAL projects is currently small, several new projects arebeing built or are planned. Saprolite ore is generally not suitable forClass 1 products, and is mainly used to produce Class 2 products forstainless steel (e.g. ferronickel and nickel pig iron).

Meanwhile, oxide resources (often called laterite) such as saprolite

Around 10% of nickel demand is used for various clean energy
technologies, either as a cathode material for batteries or in the form

and limonite are located mainly in Indonesia, the Philippines and New
Caledonia. Laterite resources are formed by weathering in a hightemperature and humid climate. More weathered upper soil is called
limonite, and less weathered lower soil is called saprolite. Nickel isof alloys for renewables and hydrogen. Clean energy technologies’
share of total nickel demand grows further to over 30% in the STEPS
and to around 60% in the SDS by 2040. In the SDS, batteries takeover from stainless steel as the largest consumer of nickel by 2040.

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The Role of Critical Minerals in Clean Energy Transitions

Nickel: All eyes on Indonesia
Global nickel production has increased by 20% over the past five
years, mainly driven by expansion projects in Asia Pacific, mostnotably Indonesia and the Philippines. These two countries represent

companies invested and committed some USD 30 billion in theIndonesian nickel supply chain, with Tshingshan’s investments in the
Morowali and Weda Bay industrial parks being the most prominent

45% of global output today.

examples.

Primary supply requirements for nickel by scenario

years, as they are responsible for around 70% of global production
growth over the period to 2025. Indonesia alone accounts for aroundhalf of the growth. In the longer term several projects are being
planned outside Indonesia, such as the Kabanga project in Tanzania

ktTheir domination of nickel production is set to intensify in the coming(one of the largest nickel sulfide deposits, with 2.6% high-grade ore)and the Wingellina project in Australia.
This suggests that future nickel supply is highly likely to be driven byprogress in Indonesia, and therefore global nickel supply chains may
be affected significantly by physical events or policy change inIndonesia. On 1 January 2020 the government of Indonesia
implemented a ban on nickel ore exports, two years ahead of thepreviously announced date, with the aim of processing its ore indomestic smelters (instead of exporting to China) and thereby
nurturing a downstream industry. In 2020 nickel ore exports to China
dropped by nearly 90% and nickel pig iron exports doubled compared
to 2019 (Reuters, 2021b). This in turn forced Chinese refiners to find
new sources of ore supply from the Philippines or New Caledonia,
but also to seek investment opportunities in Indonesia. Chinese
PAGE | 145

8 000
6 000

Secondary supply

4 000

Primary supply
requirement

2 000

2020

2030

2040

STEPS

2030

2040

SDS

IEA. All rights reserved.

Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Nickel: Quality challenge compounded by resource challenge, with Indonesia pivotal on both
The prospects for nickel supply are mixed. The overall nickel market
is likely to remain well supplied, but the picture becomes vastlydifferent for battery-grade Class 1 products. Class 1 nickel is in slightsurplus, but the rapid rise in demand from batteries is soon set tochange this to deficits. In general, sulfide resources are a good fit for
producing battery-grade Class 1 nickel. However, most of the
production growth in the coming years is poised to come from theregions with vast amounts of laterite resources, such as Indonesia
and the Philippines, which are generally more suitable for Class 2
products.
As such, HPAL is gaining traction as a way to produce Class 1
products from laterite resources. The five hydrometallurgy projects
under development in Indonesia all employ HPAL. However, thisbrings several challenges. First, past HPAL projects have trackrecords of large cost overruns and delays. Second, HPAL istechnically difficult to operate stably, as it processes low-grade ore
under high temperature and pressure. Third, as HPAL uses acid toleach metals from the deposits, acid production facilities are requiredon site, which incurs additional cost. Capital costs for HPAL projects
are typically more than double those for conventional smelters foroxide ore (BloombergNEF, 2020). And fourth, HPAL projects tend to
take four to five years to ramp up to 80% capacity.

HPAL’s past track record may not be a good guide to the prospects
for Indonesian HPAL projects. They are planned to leverage existing
infrastructure, which could help reduce capital costs. Two of the
projects are planned to be built at the Morowali Industrial Park, anickel mining and export hub in Indonesia. As a result, the capital costof the planned HPAL projects in Indonesia is estimated to be 60% of
the average for a typical HPAL project (BloombergNEF, 2020a).
While promising, it remains to be seen if these projects come online
as scheduled. The first, PT Halmahera Persada, plans to start
operations in 2021. If it comes online successfully, other projects
could follow using the first project as a template.
There are environmental issues that need to be addressed, such as
higher CO2 emissions arising from the use of coal-based electricity
and tailings disposal. While land-based tailings storage facilities arewidely used globally, deep-sea tailings placement is being
considered as an option in Indonesia because of the country’s uniquegeographical conditions (e.g. high precipitation and frequent seismic
activities) and its lower cost. However, deep-sea tailings placement
is causing concern about the marine environment. Economic andsustainable tailings treatment is set to remain a major challenge for
HPAL projects in Indonesia.

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The Role of Critical Minerals in Clean Energy Transitions

While the prospects for HPAL projects in Indonesia are crucial, there
are other pathways that could meet the demand for Class 1 products :•Some of the current Class 1 consumption in the non-battery
sector could be switched to Class 2, freeing up Class 1 nickel
supply for batteries. Higher prices would be required to incentivise
such a switch.

•

Increasing stainless steel production from scrap materials would

If all planned HPAL projects in Indonesia go smoothly, it would
provide sizeable volumes of Class 1 supply, easing pressure on
prices in the medium term. Several options are available to satisfy
the need for Class 1 products in the case of failure or delay, but all
options have some drawbacks and would need higher prices for themto materialise. Given that there is no long list of projects in the pipeline
outside Indonesia, progress in Indonesia will be key to future nickel
supply for batteries, at least in the near term.

make some Class 1 supply available for other uses.
•

Conventional oxide smelters, instead of HPAL, could produce
Class 1 products from saprolite resources: Tsingshan, the world’s
largest nickel producer, plans to convert nickel pig iron to nickel
matte from its operations in Indonesia, which could then be further
refined into Class 1 products (Roskill, 2021a). This is, however,highly energy-intensive and adds more cost.

•

Given that Class 2 products are expected to be well supplied, it isconceivable to use Class 2 products such as ferronickel or nickel
pig iron as feedstock to produce nickel sulfate for batteries. While
technically possible, this process is likely to be cost-prohibitive.

•

As explored in Chapter 2, recent movements towards high-nickel
chemistries in battery cathode could be slowed if Class 1 nickel
supply becomes tight and prices remain elevated, which could
instead raise demand for cobalt.

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Cobalt: From resource to consumer
Cobalt supply chain

DRC

Australia, Indonesia
Copper ore

Hydrometallurgy/pyrometallurgy(extracting cobalt as by-product)

Processing

Cobalt hydroxide
Primary
products

Nickel ore

kt

MiningTotal cobalt demand by sector and scenario

Cobalt metals/
other chemicals

China

800

100%

600

75%

400

50%

200

25%

Cobalt sulfate

End usesBattery cathode

Super-alloys,
carbide tools,
magnets, etc.

Other sectors

EVs and storage

Low-carbon power
generation

Share of clean
energy technologies(right axis)

2020 2030 2040 2030 2040
STEPS

SDS
IEA. All rights reserved.

Note: There are mines that produce cobalt as a primary product, but volumes are smaller than those produced as a by-product.

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The Role of Critical Minerals in Clean Energy Transitions

Cobalt: Strong EV-driven demand growth despite uncertainties around cathode chemistrydevelopment
Lithium-ion batteries are the main user of cobalt today, followed bysuper-alloys, carbide tools and magnets. As in the case of lithium, therapid increase in EV deployment in the mid-2010s shook therelatively smaller cobalt market and underpinned rollercoaster pricemovement. As rapid demand growth put strains on supply, prices
registered a fivefold increase between 2016 and early 2018. This
triggered a range of supply responses, both large-scale project
investment and a surge in artisanal small-scale mining activities,
which helped to stabilise prices.
Some 70% of cobalt is produced in the DRC as a by-product of its
copper mines. Cobalt is also produced as a by-product of nickel
mines in some countries. The Bou Azzer mine in Morocco is the only
major active mine that produces cobalt as a primary product. In the
DRC, Glencore produced around 40% of the country’s production in
2019, followed by China Molybdenum (12%). In recent years
Eurasian Resources Group has emerged as a major producer in the
country as its Metakol RTR mine ramps up. While Glencore recently
reduced production due to mine maintenance and low market prices,
the facilities could restart and expand production capacity once
maintenance is completed. Gécamines, a state-owned trading andmining company, is participating in production by owning stakes of

20-50% in certain mines. Some 10-20% of cobalt production in the
DRC occurs in the form of artisanal and small-scale mining (Roskill,2021b).
China processes around 70% of mined cobalt globally, followed by
Finland, Belgium and Canada. The DRC exports intermediatechemical products (cobalt hydroxide) to China, which are thenconverted to cobalt sulfate for use in batteries.
The development of cobalt demand is highly dependent on the
direction in which battery cathode chemistries evolve. The
composition of cathode chemistries is increasingly shifting towards
those with high-nickel content, which could weigh on the appetite forcobalt. However, even under our default assumptions where thistrend is sustained, the strong uptake of EVs underpins sevenfold
growth in cobalt demand for clean energy technologies in the STEPS
and over twenty-fold growth in the SDS over the period to 2040. This
raises the share of clean energy technologies in total demand from
15% today to 40% by 2040 in the STEPS and over two-thirds in the
SDS.

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The Role of Critical Minerals in Clean Energy Transitions

Cobalt: Production of cobalt is likely to remain concentrated in the DRC and China
the two countries. The supply chains for cobalt could therefore behighly affected by regional incidents on the trade route or policychanges in these countries. In addition, China has influence overmany assets in the DRC through foreign direct investment. It isestimated that one-third of China’s imported intermediate products
are from mines or smelters in which it has a stake.

Primary supply requirements for cobalt by scenarioktGlobal cobalt production has increased by 10% over the past five
years, mainly driven by the DRC. While some capacity has been
subject to temporary suspension due to the recent plunge in prices,
two large mines (Kamoto and Metalkol RTR) are under expansion
and a new project (Musunoi) is set to start operations in the early2020s. These projects together would add around 20 kt of annual
production by 2025. The Metalkol RTR project alone plans to produce
20 kt by processing cobalt-copper tailings through ahydrometallurgical process. The planned projects in the DRC accountfor the majority of the current project pipeline, implying that the DRC
is set to remain the dominant source of cobalt supply for the time
being.
However, outside the DRC, Australia, Canada, Madagascar andRussia have plans to increase cobalt production, mainly throughenhanced recovery of cobalt from nickel and copper mines. For
example, the CleanTeQ Sunrise project in Australia plans to produce
cobalt from one of the world’s largest cobalt-rich nickel laterite
deposits. Overall, the expected output from existing mines andprojects under construction would be sufficient to serve STEPS
demand until the medium term, but meeting SDS demand requires afurther acceleration in project development.
Mining and processing operations for cobalt are highly concentrated
in two countries, the DRC and China, and there is a close tie between

PAGE | 150

800
600

Secondary supply

400

Primary supply
requirement

200

2020

2030

2040

STEPS

2030

2040

SDS

IEA. All rights reserved.

Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Cobalt: Efforts to formalise the ASM sector and promote enhanced recovery could mitigate
negative social impacts while reducing uncertainty around future production volumes
The significant share of artisanal and small-scale mining (ASM) in the
DRC is another challenge in cobalt supply. On the one hand, ASM
production can have a stabilising effect on markets, as producers are
sensitive to price changes and can reduce or ramp up production
quickly. On the other hand, ASM may be more vulnerable toeconomic and social events such as the Covid-19 pandemic. While

companies have established formalised or semi-formalised ASM pilot
projects. However, the long-term viability of this approach is unclear
as early pilot projects closed down in 2020 due to the Covid-19
pandemic (Mining Technology, 2020). Separately, a number ofindustry initiatives exist to provide additional support for formalisation.
For example, the “Cobalt for Development” project was launched bylarge-scale mining also has environmental and social impacts, ASM
sites often present particular challenges due to their unregulated andinformal nature, including unsafe conditions for workers and theBMW, BASF, Samsung SDI and Samsung Electronics (recently
joined by Volkswagen), aiming to improve working and living
conditions for surrounding communities. However, given the scale ofpresence of child labour.

the problem, further efforts would be needed to reduce uncertainty
and provide more stability to the market.

Given these risks, there is a temptation for companies to disengage
from the ASM supply chain entirely. However, disengagement may
paradoxically worsen the situation. ASM provides an importantsource of income for many local communities, which, with appropriate
mitigation efforts, can help to address the root cause of child labour:
poverty. In recognition of this, a growing number of companies are
adopting due diligence practices aimed at identifying, assessing andmitigating these risks (see Box 4.8).
Companies and governments are also developing “on the ground”
efforts to formalise the sector and prevent irresponsible practices.
The DRC government has announced support for formalising ASM
through the state-owned Entreprise Générale du Cobalt, and some

Another complication is that cobalt is usually produced as a byproduct of copper and nickel. It means that investment decisions for
new project development or capacity expansion are not necessarily
linked to cobalt market dynamics, but rather more susceptible to themarket conditions for copper and nickel. While this raises uncertainty
about future supply, efforts to adopt processing methods thatmaximise cobalt recovery can play an important role in mitigating
risks. For example, Kamoto Copper Company in the DRC has
adopted a new leaching method – whole ore leach – which improvescobalt recovery rates from 34% to 65% (JOGMEC, 2019b). Methodsof this kind have the potential to provide sizeable by-product volumes
and ease supply-side pressure if widely adopted.

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Rare earth elements: From resource to consumer
Rare earth elements supply chain

China, US, Australia

Total neodymium demand by sector and scenario

China, Myanmar

MiningLight rare earth elements(LREEs)China, MalaysiaktMinerals containing rare earth elements
Heavy rare earth elements(HREEs)

100%

75

75%

50

50%

Low-carbon power
generation

25

25%

Share of clean
energy technologies(right axis)

Other sectors

EVs and storage

China

Processing

LREE
Separation/refining

HREE
Separation/refining

REE products(Metals/alloys)

Neodymium (Nd),Praseodymium (Pr),Lanthanum (La),
Cerium (Ce), etc.

Dysprosium (Dy),
Terbium (Tb),
Ytterbium (Yb),
Yttrium (Y), etc.

End uses100

Permanent magnets (Nd, Pr, Dy), catalysts (Ce, La, Nd),
phosphors, ceramics, etc.

2020 2030 2040 2030 2040
STEPS

SDS
IEA. All rights reserved.

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Rare earth elements: A story of concentration and diversification
REEs are a family of 17 elements comprising 15 elements in thelanthanides group (ranging from lanthanum to lutetium), plus
scandium and yttrium. On the basis of atomic weight, among thelanthanides group the lighter six elements are classified as the lightrare earth elements (LREEs) and the other nine elements as theheavy rare earth elements (HREEs) (IUPAC, 2005). REEs arecontained in the same orebody, the composition of which varies
widely by deposit. Typically mined orebodies have LREEs as a large
proportion of cerium and lanthanum and a modest amount ofmagnetic rare earths, plus a small fraction of HREEs (CRU, 2020b).
To separate individual elements, mineral concentrate is fed into hightemperature concentrated acids to liberate the REEs they containand remove radioactive elements (e.g. thorium, uranium).
While each REE is used in different applications, four elements –neodymium, dysprosium, praseodymium and terbium – are ofparticular importance to the clean energy sector. One of the major
uses is permanent magnets for motors. Demand for permanent
magnets accounts for the majority of total REE demand today indollar terms, and is expected to grow faster than any other sector,
driven by the strong rise in demand for clean energy technologies.
REEs are also used in the catalytic converters of conventional cars
to remove pollutants.

Demand for neodymium – one of the most important REEs in theclean energy sector – more than doubles in the STEPS and triples in
the SDS, reaching 70 kt and over 90 kt by 2040 respectively. Clean
energy technologies represent 15% of total neodymium demand
today, and their share is set to increase to 25% by 2040 in the STEPS
and over 40% in the SDS.
The United States had been leading the production of REEs until the
mid-1990s, when China started to emerge as a major producer. Since
then, China’s share of global production rose to over 95% in 2010,
since when its share has fallen to just over 60% in 2019, as the UnitedStates, Myanmar and Australia started to boost production (USGS,2021).
However, separation and refining operations are still heavily
concentrated in China, with almost 90% market share in 2019. Thereare currently four plants operating outside China, in Malaysia,
France, India and Estonia. These plants, however, process only
LREEs and the processing of HREEs is entirely dominated by China.
This is due in part to the fact that China hosts abundant ionadsorption clay deposits, which are easy to mine and often rich in
HREEs. For example, the highest HREE composition outside China
and Myanmar is only 5% (Mt. Weld in Australia), while the HREE
content in Xinfeng in China is nearly 50% (JOGMEC, 2020).

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The Role of Critical Minerals in Clean Energy Transitions

holding some 90% market share across the value chain.
China’s attempt to limit REE exports in 2010 was an alarm bell formany countries that rely on imports. In the immediate aftermath,prices spiked by more than 10 times for many REEs, although prices
subsequently declined. This extreme price movement triggered many
countries to consider options to reduce material intensity, findsubstitutes and diversify sources of production. Japan introduced acomprehensive policy package (“ABCD+R” initiative) thatencompasses measures to reduce consumption, secure diversified
supply sources and promote recycling. As part of the package, thecountry offered a USD 250 million loan to Lynas, an Australian REE
producer, which was the only sizeable non-Chinese company in theby Texas Mineral Resources is under review. In addition, MP
Materials plans to upgrade inactive refining facilities at a mine site.
Meanwhile, the Chinese government has been trying to control theillegal mining of REEs. Before 2014 the country used an export quota
to restrict unsanctioned production, which was not effective incontrolling production. The quota was lifted in 2014 after the decisionby the World Trade Organization (see Box 3.4). In 2015 the country
consolidated the REE industry into six state-owned enterprises aspart of efforts to bring the industry under control and strengthen
environmental oversight. These companies account for 80-85% of
REE production in China today and production from illegal mining has
registered a notable decline since 2015 (BloombergNEF, 2020b).

Primary supply requirements for neodymium by scenariokt

While China’s share of mining has declined in recent years, itspresence in the downstream operations – from processing to metals
production to magnet making – has continued apace, with the country

100business at that time, to secure non-Chinese supply options.
Several new projects have been launched outside China, and today
some 20 projects are under development in Australia, Canada andthe United States, of which 5 projects plan to start operations in theearly 2020s.
On the processing side, a plant in Malaysia run by Lynas is the only
large non-Chinese facility in operation today, but several others areunder development. In 2020 the US government funded two projects– one by Lynas and the other by MP Materials – while another project

PAGE | 15475

Secondary supply

50

Primary supply
requirement

25

2020

2030

2040

STEPS

2030

2040

SDS

IEA. All rights reserved.

Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Rare earth elements: Demand soaring to new heights, imbalances looming
While the surge in EV sales and renewables deployment presage aperiod of booming demand for the four REEs that are vital to clean
energy technologies, it is not yet clear if supply can keep up with thedemand trajectory as bottlenecks are hampering investment
decisions.

from REE production, implying that higher prices for neodymiummight not necessarily trigger new investment.

A key consideration is China’s position along the value chain. A
country could open a mine site or build a processing plant, but, as
things stand, it would need to bring the output to China for further
processing as it would be difficult for a single country to build a

fatalities. This has been a serious issue in China. The Chinese
government started to tackle this issue, although further efforts will
be needed. On 1 September 2020 the country announced the revised
law on the Prevention and Control of Solid Waste Pollution, which

presence along the whole value chain. Limited transparency about
the market and pricing further complicates investment decisions.

raised penalties and introduced a credit record system.

The second issue arises from a unique feature of REEs. All naturally
occuring REEs co-exist in the same orebody. They are therefore
produced together when processing the ore despite the fact that eachelement faces different market prospects. While the four elements
widely used in clean energy technologies are poised to be in highdemand in the years to come, other elements such as cerium andlanthanum, which are used for polishing powders, alloy
manufacturing and refining catalysts, do not share the same positive
outlook. If a company is to produce neodymium to meet risingdemand, it also needs to deal with surplus cerium, the price of which
is likely to remain subdued. This could weigh on aggregate profits

There are also environmental concerns: processing REEs often
generates toxic and radioactive materials. These can leak into
groundwater, causing major health and safety issues, including

Given the rapid rise in projected demand, production would need toincrease both within and outside China, but these volumes need to
be produced under higher environmental standards. In Chinatightening environmental regulations would help avoid an influx of
unregulated volumes and incentivise investment. At the same time, itwould be important to secure diversified sources of supply, which
would need international co-ordination and policy support.
New technologies could also unlock additional supply. For example,
REEs could be recovered from the deposits of nuclear fuels. The US
Department of Energy has funded several projects to develop
commercially viable technologies to extract REEs from coal and coalby-product sources.

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The Role of Critical Minerals in Clean Energy Transitions

Box 3.1. Can deep-sea mining be an answer to the need for more critical minerals?
After decades of experience with deepwater oil and gas production,
many countries and companies are increasingly eyeing resourcesbeneath the sea as a response to declining high-grade deposits on

However, there are economic, technical and environmental hurdles.
The technologies required are different from onshore mining or
deepwater oil and gas extraction. Cutting machines and collecting

land. Several exploration projects are progressing in the exclusive
economic zones (EEZs) of Japan, Norway and Papua New Guinea.
Following the discovery of large sulphide deposits, Norway plans to
issue licences to kick-start deep-sea mining as early as 2023, which
could place it among the first countries to harvest minerals on theseabed. Around 30 projects are waiting for the formulation of official
rules outside the EEZ by the International Seabed Authority (ISA).

vehicles need to work remotely under high water pressure, andpumping a mixture of ore and slurry requires different skills from theextraction of oil and gas. While a pilot ore lifting for massive sulfide
succeeded in Japan in 2017, further technology development is

Deep-sea mining is the process of exploiting mineral resources fromthe area of the ocean below 200 metres. There are three main typesof deposits: (i) cobalt-rich crust that contains manganese, iron,cobalt, copper, nickel and platinum; (ii) polymetallic nodules which
are rich in manganese, nickel, copper, cobalt, molybdenum andREEs; and (iii) sea-floor massive sulphides which contain copper,
gold, zinc, lead, barium and silver. In an area of 4.5 million square
kilometres in the eastern Pacific Ocean, reserves of polymetallic
nodules are estimated at 274 Mt for nickel and 44 Mt for cobalt,
multiple times the global terrestrial reserves (Hefferman, 2019).

needed to make the process commercially viable (METI, 2017).
Studies also suggest potentially significant environmental impacts.
Machines often cause seafloor disturbance, which could alter deepsea habitats and release pollutants. Sediment plumes, which arise
from stirring up fine sediments, could also affect ecosystems, whichtake long time to recover. Ecosystems in some old test sites have
not yet recovered after 30 years (Hefferman, 2019). The impacts on
biodiversity are largely unknown. Despite the vast opportunities,
rigorous assessments would be needed to understand the full
extent of environmental damage and develop proper regulatory
measures. BMW, Samsung SDI, Volvo and Google recently
announced moratorium on materials from deep-sea mining until therisks are fully understood (WWF, 2021). The ISA is developing
regulatory frameworks for the international seabed, aiming topromote deep-sea mining while minimising environmental risks.

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Approaches to ensure
reliable mineral supply

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Periodic price spikes and volatility have characterised mineral resource markets, just as they
have for crude oil
350

700

300

600

250

500

200

400

150

300

100

200

50

100

Magnesium

Steel

Platinum

1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020

1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020

Index (1950 = 100)

US price trends for several commodities in real terms, 1950-2020

Tin

NickelSources: IEA analysis based on USGS (2013) for historical prices to 2010 and S&P Global (2021) for recent prices.

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Crude oil
IEA. All rights reserved.

Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Governments and industry responded to previous episodes of supply concern with
substitution, innovation and supply responses, but with price increases and time lags
Analysis of historical episodes of tight mineral supply provides useful
insight into the factors that could help to mitigate future risks fromprice spikes. Mitigating activity includes mineral substitution or
innovation in supply and demand technologies, although not all pricespikes can be avoided entirely. As mineral extraction and processing
are often energy-intensive, mineral prices are influenced by trends inenergy prices in addition to factors such as geological concentration,
production capacity and supply chain bottlenecks.

Lower-grade US iron ore: Time lags limit substitution
When the production of natural iron ore peaked in Minnesota in 1953,
research into the extraction of iron from taconite was ramped up in
the state (Manuel, 2017). Producing iron from abundant taconite
requires processing of over three times more rock than natural ore.
Although the quality of iron from taconite had been rejected by theFord Motor Company in the 1920s, its viability improved as prices ofsteel rose. A mine was opened in 1955, but this could not prevent theshare of Minnesota iron ore in the United States slipping from 68% in
1946 to less than half by 1960. A tax incentive for taconite producers
was added to Minnesota’s constitution in 1964, but by that time ironore trade had become more globalised and the problem that taconite
mines had sought to address was not as pressing. Most taconite

mines had closed by the 1980s, by which time their favourable tax
treatment had also put the natural ore mines out of business.

Trade rules drove (and cooled) magnesium price spikes
Magnesium’s military importance has shaped its production since theearly 20th century, with all major countries seeking to host a domestic
industry. However, not all countries have equal magnesium
resources, which has periodically driven intensive research into
thermal processes that extract magnesium from ore-bearing rocks
and electrolytic processes to extract magnesium from brine. Since
1950 US magnesium prices have surged four times: in response toinflation in 1973; in response to a jump in aluminium demand in 1987;
in response to the barring of Candian imports in 1995; and in
response to the closure of plants in Canada and Russia, combinedwith anti-dumping duties on Chinese imports, in 2007 (USGS, 2013).
Price spikes have largely been resolved by relaxing importconstraints, while innovation has not enabled local production despitehigh prices. The price jolt in 1987 was resolved by new capacity
coming online in Canada (though this was itself subject to US antidumping measures by 1992). Trade policy-induced volatility
continues to affect incentives to invest in new capacity in several
major economies.

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Aluminium substituted for copper, but with time lags
In electrical cabling, aluminium performs similarly to more expensive
copper but has some technical downsides. It became a serious
competitor for copper in electrical conductors after World War II,
when copper demand could not be met by producer countries. In
Germany copper prices rose sixfold in the 20 years to 1966, whilealuminium prices were more constant. Aluminium has enjoyed a priceadvantage ever since, but has not penetrated the market accordingly.
One reason is the time it took for innovation to overcome safetyconcerns and match the cumulative experience of engineers using
copper. Research launched in the United Kingdom in the 1950s tookaround a decade to resolve key issues, by which time the relative
prices had converged and certain applications were using
underground cables where the weight advantage was nullified. In thesecond half of the 20th century, aluminium demand for electricalcabling was seen to respond to copper price spikes, but with a lag ofyears or decades (Messner, 2002). Its impact was muted by thecyclicality of relative prices and the dominant foothold that copper had
already gained.
Aluminium also substituted for tin, notably in packaging. This was
initially in response to high tin prices resulting from international
cartelisation that was intended to benefit tin producers and user
countries. It provides a lesson in the unanticipated effects of suchmeasures.

As total aluminium demand has risen, technological advances havemade it possible to use lower-grade resources – the maximum
allowable silica content of bauxite has doubled in 30 years – without
prices ever reaching more than 40% above their 1950 level in realterms. Due to price advantages, major consumers such as the UnitedStates continue to rely on imports rather than exploit advances in theuse of bauxite-containing clays and non-bauxite sources.

Platinum prices spurred innovation in substitution
Since 1979 the automotive sector has been the principal platinum
consumer for catalytic converters. Initial platinum purchases by carcompanies fuelled speculation that pushed up prices. One response
to higher prices was more commodity trading and fewer bilateral
trades with South African producers. However, volatile platinum
prices remained an issue for the automotive sector in the 1980s,
spurring research into substitution (USGS, 2013). In 1988 Fordannounced a platinum-free catalyst, and by the late 1990s catalytic
converters for gasoline cars contained more palladium than platinum.
However, a subsequent spike in the palladium price caused
producers to return to platinum briefly, before platinum prices
outpaced those of palladium again when catalytic converters fordiesel engines were introduced. While today’s relative prices would
suggest a return to platinum in gasoline catalytic converters, this is
not widely expected for reasons of well-established designs andsupply chains, and past experiences of cyclical prices.

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The biggest risk from inadequate mineral supply could be less affordable and delayed clean
energy transitions
Current share of mineral cost in total investment in selected clean energy technologies

EV batteries

Electricity networks

0%

20%

40%
Minerals

60%

80%

100%

Other
IEA. All rights reserved.

Note: Mineral cost for EV batteries (based on 40 kWh NMC622) covers copper, lithium, cobalt, manganese, nickel, graphite and aluminium, and that for electricity
networks covers copper and aluminium.
Source: IEA analysis based on Argonne National Laboratory (2020), BatPac 4.0.
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Countries and regions are stepping up efforts to ensure reliable supplies, although their policy
approaches differ
While policy makers have been concerned about critical minerals
since the 1950s, export restrictions on REEs introduced by China in2010 triggered many countries to adopt formal strategies andimplement measures to ensure reliable supplies of minerals. Over the
past decade, the European Union, the United States, Japan, Canada
and Australia have all introduced critical material strategies. The
issue of critical minerals has risen further up the policy agenda due
to growing momentum behind clean energy transitions. Although
ensuring undisrupted supplies is a common feature of the strategies,
specific directions and policy priorities vary depending on national orregional circumstances.
Meanwhile, China has emerged as a major force in global supply
chains for critical minerals and clean energy technologies over recent
decades. The country’s rise to becoming the kingpin of clean energy
supply chains has largely been underpinned by its long-term
industrial policies, such as five-year plans for economic development,
the Made in China initiative and the Belt and Road Initiatives. In thissection, we examine major policy directions and approaches toensuring mineral security across global regions.

The European Union: Diversified and sustainablesupplies to support clean energy transitions
In September 2020 the European Commission published a set ofpolicy documents to make Europe's raw materials supply moresecure and sustainable. It updated its policy directions from previous
studies to align with new 2030 and 2050 climate ambitions. The policy
package extended the list of critical minerals to 30, compared to 14
in 2011. Together with bauxite, titanium and strontium, lithium wasadded to the list for the first time in 2020, reflecting the region’s
ambition to nurture a battery and EV manufacturing industry. Some
EU member states have a strong metal refining and manufacturingbase. Finland refines around 10% of global refined cobalt output.
There are major manufacturers of solar PV components, windturbines and EVs in the region. However, the region is almost entirely
reliant on external mining supplies for many energy transition
minerals such as lithium, cobalt and REEs.
The European Union plans to seek opportunities for sourcing criticalminerals domestically, for example by tapping opportunities forenhanced metal extraction in post-mining regions. The EU Action
Plan estimates that this could lead to 80% of Europe’s lithium demand
being supplied from European sources by 2025 (European

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The Role of Critical Minerals in Clean Energy Transitions

Commission, 2020a). Other measures include encouraging circularuses of resources, including establishing advanced recycling
capacity, strengthening efforts for sustainable product sourcing, andpromoting technology innovation for material substitution. Europe
holds a leading position in recycling critical minerals, with over 50%
of its base metals coming from recycled sources (Eurometaux, 2019).
To implement the plan, the European Union established theEuropean Raw Materials Alliance, which involves industrial actors
along the value chain, member states and regions, trade unions, civilsociety, research organisations, investors and non-governmentalorganisations. The alliance aims to diversify supply chains, attract
investment into the raw material value chain, foster technology
innovation and create an enabling framework for the circular
economy.

The United States: Revitalising domestic production
and building resilient supply chains
From the 1960s until the late 1980s, the Mountain Pass mine in
California was the largest source of rare earth oxides in the world. In
1992 China surpassed the United States as the world’s largest
producer. Since then, China has dominated the global supply of
REEs. After the Chinese export embargo in 2010, the US Departmentof Energy issued its first Critical Materials Strategy that year. The
strategy identified 14 critical minerals, which were extended to 35 inlater years. Since then, critical minerals have become a prominent

feature in US national security and defence strategies, highlighting
the interdependence of economic security with national security.
The 2019 Federal Strategy to Ensure Secure and Reliable Supply of
Critical Minerals highlighted that the country is reliant on imports for
31 of the 35 critical minerals, and has no domestic production for 14of them. The strategy included 24 policy goals under the six major“calls to action” categories, alongside over 60 recommendations
aiming to revitalise production and processing operations in the
country and alleviate vulnerability against supply disruption. In
addition to rebuilding domestic production, the strategy
acknowledged the important role of strategic partnerships with otherregions such as Canada, the European Union, Australia and Japan.
The Energy Resource Governance Initiative (ERGI), launched by the
Bureau of Energy Resources of the US Department of State in June
2019, expanded the scope further to engage other major producers
across the globe. Its aim is to promote sound mining sector
governance and resilient global supply chains for critical minerals.
This initiative brings countries together to engage in advancing
governance principles, sharing best practices and encouraging alevel playing field for investment. The founding partners – Australia,
Botswana, Canada, Peru and the United States – released the ERGI
Toolkit to share and reinforce best practices.

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Japan: Securing critical mineral deposits overseas andinvesting in demand-side innovation

Japan is also eyeing the potential of mineral resources on the seabedand conducted the first probe exploration in 2017.

Due to its natural circumstances and highly industrialised economy,
Japan realised early on that it had to meet its demand for natural
resources through active foreign engagement and emergency
preparedness. This has been the case both for oil and natural gas

The government also supports R&D for recycling, material efficiency
and substitution technologies to reduce the primary supply
requirements. These have been among the most active areas ofand also for critical minerals. In accordance with Ministry of Economy,
Trade and Industry policy, it defined over 30 minerals as “rare metals”
to ensure security of supply. Although Japan has no domestic
resources, it does have a significant REE processing and refining
industry, including 15% of global permanent magnet production(CSIS, 2021). Japan’s official target is to raise the self-sufficiency rateof mineral resources (base metals) to more than 80% by 2030. For
this, the country has been taking action on both demand and supply
sides. For example, in the aftermath of the Chinese export ban in
2010, Japan introduced a comprehensive policy package (“ABCD+R”
initiative) that encompasses both supply and demand to reduce therisk of REE supply disruption.
On the supply side, Japan has been operating a strategic stockpilingprogramme since 1983, through Japan Oil, Gas and Metals National
Corporation (JOGMEC). The government also provides financial
support (loans, guarantees and equity) to Japanese companies
working to develop overseas critical mineral resources, through
JOGMEC. JOGMEC also directly conducts exploration activities in
co-operation with foreign companies. These activities tend to belinked to direct supply guarantees for Japanese manufacturers.

Japan’s co-operation with the United States and the European Union.

Canada: Aiming to be a supplier of sustainable andresponsible minerals for global markets
Canada holds some of the world’s most substantial reserves of many
minerals, including some 15 million tonnes of rare earth oxides(NRCAN, 2020). The Canadian Minerals and Metals Plan released in2019 sets a policy vision for establishing Canada as the leading
mining nation of sustainable and responsible minerals. In response
to growing momentum for clean energy transitions, it aims to bolster
Canada’s standing as an exploration and mining powerhouse,increase foreign direct investment, promote the competitive mining
service industry, and therefore boost the local economy. An
additional task identified in the plan is to assess Canada’s recycling
capacity to determine how it can support sustainability andcompetitiveness.
In January 2020 Canada and the United States signed a Joint Action
Plan on Critical Minerals Collaboration to advance mutual
co-operation. Additionally, Canada joined the US-led ERGI toadvance its goals of securing sustainable supply chains for critical

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minerals. The country also has strong bilateral relations on criticalminerals with both the European Union and Japan through regularpolicy dialogue. It is also working with the Global Battery Alliance todevelop a circular and sustainable EV battery value chain.
The country is putting a strong focus on sustainable development ofminerals. It implemented a range of initiatives aiming to accelerate
R&D for green mining technologies and promote sustainable
development practices under the umbrella of the Green Mining
Innovation initiative by the Department of Natural Reources. In 2016
CanmetMINING, a research branch of the department, initiated aninternal programme called Mining Value from Waste to examine
opportunities to reprocess mine waste to recover minerals andrepurpose other inert materials. The Mining Association of Canada
Toward Sustainable Mining Initiative is a widely recognised
sustainability programme that supports mining companies’ efforts tomanage environmental and social risks. It was among the first to seta sustainability standard requiring site-level assessments.

Australia: Strengthening the critical minerals sector to
support its economy through foreign investment,
infrastructure and innovation
Australia is a major producer of many critical minerals: it is the world’s
largest producer of lithium and zirconium concentrate, and the fourthlargest producer of REEs. The country is well placed to support global
clean energy transitions as a reliable and responsible supplier ofmany minerals that are vital to clean energy technologies. Australia’s
Critical Minerals Strategy 2019 outlines the government’s ambition to
expand this potential by promoting investment into its minerals
sector. The focus includes downstream processing and refining,
boosting innovation to lower production costs, and connecting
mineral development projects with infrastructure development. At the
beginning of 2020 the government established the Critical Minerals
Facilitation Office within the Department of Industry, Science, Energy
and Resources. The office’s main goals include: (i) enabling andattracting investment; (ii) partnering internationally on global supply
chains; (iii) helping finance prospective domestic critical minerals
projects; and (iv) facilitating critical minerals research.
In March 2021 Australia launched the Resources Technology andCritical Minerals Processing road map and allocated funds under thegovernment's AUD 1.5 billion Modern Manufacturing Strategy. The
intention is to help manufacturers increase their competitiveness andbuild scale in the global market in the areas of resources technology
and critical mineral processing. The road map aims to enhance thecountry’s critical mineral processing capabilities, develop processing
and refining industries, and maximise the value of country’s
resources.

China: A major force in the global supply chain for
critical minerals through decades of industrial policies
China’s recognition of the strategic value of minerals dates back tothe seventh National Five-Year Plan for Rare Earth Industry (1986–

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1990), which highlighted the need for research and production ofadvanced rare earth applications and new materials (CSIS, 2021).
During the 1990-2010 period the focus was to secure resources toserve the country’s burgeoning appetite for infrastructure build-out.
Where domestic resources were lacking, China pursued a “going out”
strategy and invested in overseas mining projects. A combination ofstate-directed investment and financing support based on long-term
strategic plays saw Chinese firms take major positions in supplies ofminerals from other countries, often in higher-risk jurisdictions. It isestimated that China today owns or has influence over half of the
DRC’s cobalt production through large stakes in its mining industry(FP, 2019).
At the same time, the country has been active in nurturing
downstream capacity through supportive regulation, state-backed
financing and subsidies. In some cases (e.g. REE), export andproduction quotas were used to favour companies that create
additional value through processing, although export restrictions
were lifted following the decision by World Trade Organization. The
country currently accounts for some 40-70% of global copper, lithiumand cobalt refining and almost 90% of REE processing.
While these approaches enabled China’s rise in the critical mineral
supply chain, in some cases they were accompanied by side effects
such as financial losses, overcapacity and weakened environmental
performance. As such, approaches in the 2010s shifted gear fromlarge investment in bulk materials to focused investment in strategic“new materials”, reflecting the changing pattern of consumption andthe evolving ambition in the clean energy space (STRADE, 2018).
In 2015 the government announced the Made in China 2025 initiative,
which identified the “new materials” industry as one of ten important
areas for government support. The new materials included
permanent magnets (made from REE) that are central to many clean
energy applications such as EV motors and wind turbines. While
recent investment in overseas mineral assets does not appear to be
as large as before, strategic investment continues. Examples include
Tianqi Lithium’s equity acquisitions in Chilean company SQM(23.8%) and Australia’s Greenbushes lithium mine (51%).
Due to the strong foothold of its downstream industries, China’s
consumption of mined material has been increasing, often at a fasterpace than domestic production growth (e.g. copper, REE). This
triggered the country to introduce policies to mitigate risks frompotential supply disruption. China’s National Mineral Resource Plan
for 2016–2020 called for a warning mechanism to safeguard its REE
supply chains against potential disruption, and a more systematic
demand and supply analysis of mineral products. More recently
China passed a law to allow export controls on items considered tobe critical to the state’s interest and security. The country alsoannounced draft legislation to strengthen the approval process for
REE development projects (CSIS, 2021).

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IEA’s six pillars of a comprehensive approach to mineral security
While each country has different motivations and approaches to theissue of critical minerals, their experiences provide useful lessons fordesigning frameworks to ensure reliable mineral supplies. Past
approaches have varied depending on whether the country is a
producer or a consumer, but this distinction is increasingly becoming
blurred as producer countries strive to build a domestic industry to
produce clean energy equipment, and consumer countries seek torevitalise domestic production or secure overseas production assets.
This suggests that an approach to ensuring reliable mineral supplies
needs to be multi-faceted, covering a wide range of aspects fromto bring forward new supplies at the right time. Governments can takea variety of measures to attract investment into the sector, but theforemost action is to provide clear and strong signals about energy
transitions. As noted in Chapter 2, the largest uncertainty arounddemand comes from questions about countries’ real commitment totheir climate ambitions. If companies do not have confidence incountries’ climate policies, they are likely to make investment
decisions based on much more conservative expectations. Given thelong lead times for new projects, this could create a bottleneck when
deployment of clean energy technologies starts to grow rapidly, as

supply to demand to recycling.

envisaged in the SDS.

Based on the IEA’s long-standing experience in energy security, we
identify six pillars of a broad approach to minerals security,

Governments can also play a role in creating conditions conducive toinvestment in the mineral supply chain. Measures could include

complementing countries’ existing initiatives. They are: (i) ensuring
adequate investment in diversified sources of new supply; (ii)promoting technology innovation at all points along the value chain;(iii) scaling up recycling; (iv) enhancing supply chain resilience andmarket transparency; (v) mainstreaming higher environmental andsocial standards; and (vi) strengthening international collaboration
between producers and consumers.

strengthening national geological surveys, streamlining permitting
procedures to shorten lead times and, in some cases, providing
financing support to de-risk strategic projects (which can be definedaccording to each country’s own assessment of which, and how
much, critical minerals they might need in the future). They can also
support the unlocking of additional sources of supply by supporting
enhanced metals recovery from low-grade ores and waste streams
or revisiting the potential of abandoned mines. Further, governments
can work together to improve data availability and comparability
across regions, and raise public acceptance.

Beginning with adequacy of supply, the supply of minerals and metals
needs to keep up with the rapid pace of demand growth to ensureorderly energy transitions. This requires strong growth in investment

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Box 3.2. What would be the right metrics to assess mineral security?
Any efforts to improve security of supply start with understanding
where we stand and what progress is being made. The rising
importance of critical minerals in energy transitions raises aquestion about the right metrics to measure the status and progressof mineral security.
The most commonly used metrics today are (i) import dependencyand (ii) the level of supplier concentration. Import dependency is
calculated as the amount of imported material as a percentage ofdomestic consumption. The level of supplier concentration is often
measured using the Herfindahl–Hirschman Index, a widely usedmetric to assess the level of market concentration. In some cases,
these are complemented by measurement of the economic
importance of a certain mineral, such as the contribution of minerals
to the value added of end-use sectors. Many countries have defined
a list of critical minerals using variations of this approach.
While these remain highly valuable, most of the metrics naturally
focus on the sovereign boundary, and the question remains as to
how these measures can trigger action to improve security ofsupply. Given the need for a wider security approach, there may be
scope to develop metrics that encompass wider aspects of supply,
demand, resilience and sustainability to complement the traditional
criticality indicators.

For example, to assess the adequacy of future supply, the actuallevel of investment spending against the level required to meet longterm demand could be measured, as has been done for the energy
sector in the IEA’s World Energy Investment reports. This could givean indication of possible market tightness.
Public R&D spending on technologies that can reduce material
intensity, allow substitution and unlock new supplies can beassessed. The IEA’s Energy Technology RD&D Budgets reportassesses this for energy technologies in IEA member countries.
There is scope to track material intensity in clean energy
technologies in a systematic manner. This will be crucial for a moreaccurate view about future material requirements.
On supply chain resiliency, the measurement of supplierconcentration could be expanded to include the processing andrefining value chain. Some countries assess the political and social
risks of the major producers, which can be a useful complement.
Finally, progress on recycling (e.g. collection rates and the share ofsecondary production) can be an important part of security metrics.
Both traditional and complementary metrics will require greater datatransparency. Governments have a role in collecting anddisseminating reliable data in this regard.

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Stepping up efforts for technology innovation and recycling can yield multiple benefits
History suggests that innovation in demand-side technology can playa major role in alleviating strains on supply and reducing material
costs, which could in turn help enhance the affordability of clean
energy technologies. As noted in Chapter 2, costs associated withraw materials are likely to represent a larger portion of total
investment costs for clean energy technologies in the future as othercost components continue to decline thanks to technology learningand economies of scale. This underscores the important role ofinnovation in demand-side technology to mitigate upward costpressure.
There are many positive examples. Efforts to reduce the use of silver
and silicon in solar cells have helped to enable a spectacular rise insolar PV deployment in recent years. Technology advances inaluminium helped ease strains on copper supply in the 1950s and tin
supply in the 1980s. A host of emerging technologies have thepotential to reduce the use of critical minerals, if successfullycommercialised (e.g. induction motors or switched reluctance motors
to reduce REE consumption). There is, however, a need to assess
trade-offs that substitution could trigger (e.g. all solid-state batteries
reduce the need for nickel and cobalt, but require more lithium).
The possible contributions of technology are not confined to thedemand side. Innovation in production and processing technologies
can unlock sizeable amounts of new supplies and contribute to

reducing primary supply requirements. The emergence of Sx-Ew
processes in the 1970s opened up the possibility to tap into extensive
copper oxide resources. More recently, emerging technologies suchas direct lithium extraction, or enhanced metal recovery from waste
streams or low-grade ores, could lead to a step change in future
supply volumes. Technologies that help reduce water use or energy
consumption can also bring additional environmental and operational
benefits. In 2021 the US Department of Energy announced USD 30
million in funding research to secure domestic supply chains.
Countries endowed with huge resources are naturally putting more
effort into supply-side technology innovation, but consumer countries
can also benefit from reduced import dependency.
Policy support to scale up recycling efforts can bring multiple benefits.
It can help reduce primary supply requirements and alleviate theenvironmental burdens associated with primary supply. Also, thesecurity benefits of recycling can be far greater for regions with wider
deployment of clean energy technology, as they stand to benefit fromgreater economies of scale. Government support may be necessary
to incentivise recycling at the end-of-life stage of products, support
collection and sorting activities and fund R&D into new recycling
technologies. In the last section of this chapter, we examine theprospects and policy approaches to scaling up recycling in moredetail, with a focus on batteries and electricity network

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Governments can play a role in enhancing supply chain resilience and market transparency
Ensuring that critical minerals enable clean energy transitions
requires a broad view of the supply chains, from mining to processing.
Even if raw materials from mining are well supplied, a bottleneck inprocessing capacity could elevate prices for refined products andaffect clean energy investment. In addition, a higher degree ofconcentration of production implies that disruption can have wider
ripple impacts on the entire value chain.

been operating stockpiling schemes for many years as a tool toensure supply security. Such programmes need to be carefully
designed, based on a periodic review of potential vulnerabilities. In
general, such schemes can be more effective for minerals withsmaller markets, opaque pricing and a concentrated supply structure
than those with well-developed markets and ample liquidity.

Periodic stress-tests coupled with emergency response exercises
can help policy makers identify points of potential weakness, assess

There is scope to improve market transparency. Many base metals
such as copper are widely traded in the market with reliable pricing
mechanisms. However, this is not the case for some energy transition

potential impacts and devise necessary actions. For example, some
European countries conduct a regular “N-1” stress test to assess theresiliency of gas supply infrastructure. The test assumes the loss ofthe single largest element of supply infrastructure and evaluates theimpact on the country’s energy supply. Another example is the
emergency response exercises the IEA regularly organises with its
member countries to ensure quick and effective responses to major
supply disruptions. Safeguarding security of oil supply has been theminerals with smaller markets, such as lithium and cobalt (seeBox 3.3). These minerals have been historically regarded as “minor
minerals” and traded on a bilateral basis, resulting in low pricing
transparency and liquidity. Buyers need to rely on information
provided by suppliers, making it difficult to manage price risks andaffecting investment decisions down the value chain. However, as
demand grows, end users will increasingly call for more transparency
around pricing to hedge risks. Establishing reliable price benchmarks

main focus so far, but the concept is expanding to encompass otherareas as well. In 2016 the IEA worked with the Japanese government
to conduct a gas resiliency assessment, aimed at identifying risks andchallenges related to natural gas supply in Japan.

will be an important step towards enhancing market transparency andsupporting market development. While this process takes time, theexperience in the LNG market shows the potential benefits: the riseof hub-based pricing for LNG, alongside long-term supply contracts,
has made gas markets more responsive to changes in global andVoluntary strategic stockpiling, where applicable, can also help
countries weather short-term supply disruption. Some countries haveregional supply-demand balances.

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The Role of Critical Minerals in Clean Energy Transitions

Box 3.3. Towards a transparent pricing system: A story of lithium and cobalt
The predominant approach to trading lithium has not changed muchover the past few years. Lithium has not been listed on an exchange
and does not have a reliable benchmark price. The vast majority of

Cobalt is currently traded on the LME and the Chicago Mercantile
Exchange (CME). The LME launched a physically settled contract
in 2010, followed by a financially settled contract in 2019. CME

lithium raw materials and chemicals are sold under bilateral longterm contracts between suppliers and end users. There is a spot
price index based on Chinese custom data, but a question markremains as to whether the index reflects market dynamics in an
accurate and timely manner. It is rarely used for large-scale
negotiation or hedging in practice (McKinsey, 2018).

launched new cash-settled cobalt futures contract in 2020. So far,the LME’s physically settled cobalt contract has not been widely
accepted by industry participants as a tool for hedging. The
financially settled contracts faced similar issues. The major barriers
to cobalt trade have been the lack of liquidity in the spot market, as
well as cargo heterogeneity.

However, there are signs of change. The duration of contracts is
becoming shorter, and the London Metal Exchange (LME)
introduced a tradeable price benchmark in partnership with
Fastmarkets, a price reporting agency. The LME also plans to

However, the situation is clearly improving with more pricing
information being available. Fastmarkets releases a daily metal
price and twice-weekly hydroxide payable assessment. These havebeen adopted into the majority of cobalt contracts. Some companies

launch the LME lithium futures contract in the first half of 2021 – thefirst of its kind. These developments are expected to allow
stakeholders to mitigate against price volatility.

started to hedge cobalt exposure through financial swaps and banks
are also getting involved.

There are, however, challenges. While a growing number of buyers
are entering the market, only four companies supply the majority oflithium raw materials. The ambiguity of standards and classifications
is another obstacle. Lithium is a speciality chemical that comes in avariety of material grades. This calls for a standardised
methodology to enable comparability and accuracy of prices.

Over time, as demand grows and more market participants enter
the market, more liquid contracts are likely to be evident in themarket. The development of new financial instruments will be
important to provide some level of risk mitigation and increased
levels of transparency (Lee et al., 2020).

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Improved environmental and social performance contributes to enhanced mineral security
As a sector, mining is often cited as having the greatest exposure to
ESG risks (S&P Global, 2019b). Recognising this, investors,
consumers and civil society increasingly push companies to sourceminerals that are sustainably and responsibly produced, withinstitutional investors particularly visible in these efforts. It is
becoming increasingly difficult for mining companies to ignore theseconcerns. Higher environmental and social performance is also
crucial for governments to gain public acceptance for project
development.

shutdowns and large remediation and repair costs. At the same time,
criminal and civil liability related to environmental damage or corrupt
practices can raise the cost of production, with severe reputational

There is a significant degree of variation in environmental and social
performance in the market. This makes it challenging for consumers
to exclude poor-performing minerals as there may not be sufficientquantities of high-performing minerals to meet demand. Efforts toimprove environmental and social performance can therefore
contribute to enhanced mineral security by increasing volumes
produced with higher environmental and social standards andlowering the cost of sourcing them.

same time, some of the worst social impacts caused by mining, suchas child labour, are ultimately a product of widespread poverty. To
address these impacts, co-ordinated policy efforts will be needed:

Poor environmental and social performance can also lead to supply
disruption. Production sites may be shut down or disrupted due to
disputes over water access or as a consequence of regulatory
actions to enforce child labour or human rights violations. Meanwhile,
dam failures at tailings storage facilities can lead to extended

and financial implications for the companies concerned.

A level playing field
Environmental and social performance tends to be better for minerals
produced in countries with well-developed regulatory systems, strong
enforcement and institutionalised transparency practices. At the(i) to provide technical and political support to countries seeking to
improve legal and regulatory practices; (ii) to incentivise producers to
adopt more sustainable operational practices; and (iii) to ensure thatcompanies across the supply chain undertake due diligence toidentify, assess and mitigate these risks (see Chapter 4).
Establishing a level playing field may also help to support innovative
strategies to address these risks, which can ultimately lead to greater
diversification among supply. If strong environmental and social
performance is rewarded in the marketplace, new entrants will havean incentive to develop new approaches to addressing these risks.

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International co-operation is vital for ensuring reliable and sustainable mineral supply
As noted above, many governments have developed strategies toensure the reliable and sustainable supply of minerals. Whileencouraging, given the complex nature of the mineral supply chains
spanning across the globe and involving multiple minerals, no
individual country will be able to drive the necessary changes on its
own. For example, in the case of REEs, while there is growing interestin securing diversified supply options, it would be challenging andcost-prohibitive for a single country to build a presence along theentire value chain and some efforts so far have given rise to tradedisputes (see Box 3.4).
Governments can steer better market outcomes and improve thesecurity of mineral supply by working together. For the moment, there
is no overarching international governance framework for criticalminerals and co-ordinated policy action is lacking. Individual efforts
are often fragmented and tend to focus on narrow issues. There is astrong case for strengthened international co-operation to ensure
reliable and sustainable mineral supply. To this end, the UN
Environmental Programme’s International Resource Panel
highlighted the need for a framework to inform policy strategies andco-ordinate international efforts surrounding mineral security (IRP,2020).

There are many ways in which a multilateral framework could play arole in ensuring reliable and sustainable mineral supply:•

Provide clear market signals on decarbonisation targets to reducedemand uncertainty and help de-risk investment decisions.

•

Facilitate a dialogue between producers and consumers to
identify key bottlenecks and co-ordinate investment decisions.

•

Mobilise public funds to accelerate R&D efforts for technology
innovation.

•

Conduct regular assessments of potential vulnerabilities acrossthe supply chains and discuss collective action to respond topotential disruption.

•

Promote knowledge and capacity transfer to spread sustainable
and responsible development practices to a wide range ofcountries.

•

Strengthen environmental and social performance standards
through international standardisation and other mechanisms, tomaintain a social license and ensure a level playing field.

•

Co-ordinate diplomatic efforts to prevent restrictive export
policies.

•

Collect reliable data to assess the level of risk and help informed
decision-making.

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Box 3.4. Export restrictions on critical minerals
As security of supply comes into sharper focus, potential distortions
to the free trade of critical minerals become increasingly sensitive.
Export restrictions introduced by China, Indonesia and the DRC
reflect the varying objectives being pursued, and the mixed results
achieved. Quantitative restrictions are largely prohibited under
GATT article XI, but may be justified under certain limited
exceptions such as environmental conservation or national security.
China started introducing export restrictions on REEs in 2006, which
resulted in an increase in prices and the United States filing a WTO
case in 2012. Plaintiffs argued that the export controls were part ofa deliberate industrial policy, and not resource conservation efforts.
In 2014 the WTO Appellate Body ruled in their favour and China
lifted the measures (WTO, 2015). Moves by third countries to invest
in non-Chinese sourcing, the subsequent collapse in prices and theultimate WTO ruling underline the mixed benefits of such measures.
In January 2021 the Chinese government issued its draft version of
the Regulations on Rare Earth Management. The regulations aim
to protect national security and prohibit unsustainable practices
such as illegal mining and environmental degradation. Exports
would become subject to government approval through the Chinese
Export Control Law (China Briefing, 2021). The compatibility of any
potential measures with WTO provisions remains unclear.

Policies aimed at adding local value are also subject to economic
conditions and WTO rules. For instance, while Indonesia’s nickelore export prohibition has been successful at enticing theconstruction of smelters (UNCTAD, 2017), it has not attracted adiverse investment profile, with mostly Chinese companies
investing so far, and the European Union is now challenging it at theWTO (DG Trade, 2021). The DRC pursued a similar strategy
through an export ban on copper and cobalt concentrates startingin 2013. However, this ban has largely stalled due to operators’
inability to develop local processing facilities (Africa Oil & Power,2020). This reflects the inherent challenges to interventionist trade
policies in commodity-dependent countries.
These examples illustrate how growing concerns over local
development and environmental conservation could lead to anincrease in export restrictions. However, importing countries arelikely to dispute them as a proxy for industrial or geopoliticalstrategies. Empirical evidence also shows that despite the limited
geographic scope of production and/or processing of certain
minerals, export restrictions often have limited effect in the long run
due to potential diversification of supply (IRENA, 2019).

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Focus on recycling

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Growing recycled volumes have only managed to keep up with demand growth
Metal recycling has the potential to be a significant source of
secondary supply, although it comes with its own set of challenges.
Recycling comprises the physical collection and separation of metals,
and metallurgical processing to recover them. Taken together, these
combine multiple pathways with a wide range of technologies andpractices. Potential sources for recycling include tailings fromprocessing, scrap used in manufacturing and fabrication and scrap
from end-of-life products. For some metals, such as aluminium andcopper, global stock and recycling pathways are relatively wellestablished. However, for many metals, global stock assessments
are scant or only examine discrete sub-sectoral applications, making
recycling potential difficult to assess.
As noted in Chapter 1, recycling rates are typically measured by endof-life recycling rates and recycled input rates. End-of-life recycling
rates refer to the share of material in waste flows that is actually
recycled, and recycled input rates assess the share of secondary
sources in total supply. Both rates differ substantially by metal andregion. Higher end-of-life recycling rates do not necessarily mean
higher recycled input rates, as each end-use product has a different
lifetime and shows a varying pace of demand growth. For example,
a beverage can typically enters the waste stream within a month after

consumption, whereas building materials take over 40 years to becollected. The fact that collected products are often reused in a semifabricated form makes an additional difference. For many metals
such as copper and aluminium, recycled input rates have notchanged much in recent years, meaning that improved recycling
activities have only managed to keep up with demand growth.

Recycled input rates for selected metals and minerals
100%
Aluminium
80%
Copper

60%

Lead

40%
20%

Cobalt2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

IEA. All rights reserved.
Notes: Share of secondary production in total refined product consumption.
Does not include scrap volumes that are reused in end-use applications.
Source: World Bureau of Metal Statistics (2020).

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Scaling up recycling can bring considerable security and environmental benefits
Physical collection is a primary limiting factor on the level of recycling.
Metals such as aluminium, iron, nickel and often copper have beenable to achieve high rates of recycling for simple, bulk products or forindustrial applications that are easier to collect and morehomogeneous in nature. As a result, these metals have a higher
potential for continuous recycling and maintaining global stock.
Many new products such as personal electronics or alloyed materials
make physical and metallurgical separation difficult. New iron andcopper alloys, for example, bring superior functionalities but result inenergy-intensive recycling pathways. Recycling of these products
may require the physical, chemical and metallurgical separation ofover 50 materials with different thermodynamic and metallurgic
considerations from a single product.
Recycling technologies need to take into account current available
stock and anticipate stock changes. Minerals that enter stock today
may not be recoverable for decades depending on product life.
Technologies must adapt to the stock life and the nature of the stock’s
evolving thermodynamic and metallurgical properties. While stock
descriptions are moderately robust for copper, aluminium and nickel
at a global level, most critical minerals lack information anddescription of stock at country, regional or global levels. For manyenergy transition minerals, stock descriptions and estimates areneeded to inform policy measures to efficiently support thedevelopment of new markets (Nicolli et al, 2012).
But the potential for increased secondary supply from recycling, whilechallenging, is apparent. Recent analysis indicates that recovery of
key minerals (copper, palladium, gold and silver) from printed circuitboards could require as little as 5% of the energy as compared toprimary supply from mining (Seabra and Caldeira-Pires, 2020). In aworld increasingly looking to reduce emissions, this is an important
advantage. Critical to achieving these potential rates are increased
collection rates, developing knowledge of global and regional stocks,
market incentives, and collaboration, often beyond country borders,to encourage secondary market development. The digital revolutionis also seeing its mark across recycling processes. Approaches spanfrom the use of data analytics to track and understand global andregional metal stocks to the use of new sensors to improve physicalcollection and separation.
In addition to established waste streams (e.g. industrial applications),
emerging waste streams from clean energy technologies(e.g. batteries, solar panels) could be a significant source of
secondary supply after the 2030s, although they do not eliminate theneed for continued investment in the primary supply of minerals.

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Enhanced metal recovery from mining and processing waste provides additional opportunities
for secondary supply
Enhanced metals recovery from mining and processing waste(e.g. mining residues, slag, sludges and tailings) provides a clear
opportunity to increase supply. Better treatment of waste streams canalso reduce the risk of hazardous materials entering the environment.
Governments are increasingly taking notice of the opportunities toimprove metal recovery from waste streams, as shown by Australia’s

handling of radioactive elements (e.g. thorium) (USGS, 2020). Rio
Tinto is tapping an opportunity to extract lithium from waste rocks at
its Boron mine in the United States (see section on lithium). Several
laboratory studies demonstrated the potential of bioleaching torecover copper, cobalt, nickel and others from mine tailings and othersecondary sources (e.g. electronic waste) in Germany, Spain, Serbia,

recently announced National Manufacturing Priority roadmap(DISER, 2021) aimed at increasing the country’s share of criticalmineral supply.

Iran, China and Uganda (Schippers et al., 2014, Zhang et al., 2020).

New technologies, coupled with in-depth assessments of thepotential from mining and processing waste, can help generate
further supply and reduce the dependence on imported materials. For
example, the Kiruna iron ore mine tailings in Sweden are estimatedto contain approximately 5 000 parts per million of REEs after
beneficiation and are considered a new REE resource for theEuropean Union (Peelman et al., 2016). US scientists found thatwaste rock from long-closed iron ore mines in the eastern Adirondack
Mountains, New York, may provide valuable REEs. This is triggering
further analysis of the potential of waste rock and tailings from oldmines, although there are challenges associated with the proper

Similarly, stockpiled and annually produced bauxite residue can beconsidered a resource for extracting REEs, titanium and vanadium.
In the European Union the combination of enhanced metal recovery
from low-grade ores, fine grained landfilled sludges, iron-rich sludges
from metal production (from zinc production) and fayalitic slag (mostly
from primary and secondary copper production) could yield additional
volumes of zinc, nickel, copper, cobalt and others, with a combined
market value estimated at EUR 2.9 billion per year (Eurometaux,2019).
While secondary supply from waste streams is becoming increasingly
cost-competitive with primary sources (Spooren, 2020), challenges
remain to be addressed such as minimising emissions from recycling
processes and removing hazardous substances.

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Policy intervention may be necessary to build demand for secondary supply…
In certain contexts, secondary markets for specific metals havedeveloped in recent years even in the absence of policy support. Thishas occurred where market prices were high enough to encourage
investment in recycling and a sizeable, readily available supply of
waste stock existed. This is not currently the case for many minerals
and metals that are vital for energy transitions. Barriers to further
development of secondary supplies include competition from primary
supply (the prices of which often do not account for negativeenvironmental externalities), information deficits and limited waste
collection (Nicolli et al, 2012; Söderholm, 2020). In these cases, arange of policy options can support the development of secondary
supply markets and consequently reduce many of the environmental
and social impacts associated with mining.

Support for secondary supply markets
Many countries have set overall recycling rate targets for consumer
products – particularly for end-of-life vehicles and electronic waste.
However, these product-specific recycling targets are less likely to
encourage recycling of energy transition metals than more targeted,metal-specific policies. Weight- and volume-based metrics that are
not metal-specific may allow companies to meet the targets byfocusing on high-volume materials that are more readily recyclable
than those found in small or trace quantities (UNEP, 2013).

Targeted policies, including minimum recycled content requirements,
tradeable recycling credits and virgin material taxes all have potential
to incentivise recycling and drive growth of secondary supplies(Söderholm, 2020). Alternatively, governments can consider direct
subsidies for recycling. California’s Covered Electronic Waste
programme, for example, charges a fee to consumers on purchasesof electronics, which is used to offset the cost of recovery andrecycling. Each of these policy options increases the cost of using
non-recycled materials vis-à-vis secondary supplies.
While these policies can, in theory, all yield similar outcomes, theirimpacts may vary in practice depending on the specific market
dynamics (e.g. how a certain tax level would affect prices for primary
products and in turn the uptake of secondary supply in each market).
It is therefore crucial for policy makers to choose policy tools basedon an understanding of the specific market context in order toadequately account for the costs of negative externalities.
International co-ordination will be critical because of the global natureof metal markets. If policies designed to stimulate demand forsecondary supply are enacted unilaterally, they may have unintended
consequences that lead only to a geographical change in use rather
than a change in market supply. In addition, collaboration between
countries or regions may be needed to sufficiently understand market
stock, costs and dynamics.

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The Role of Critical Minerals in Clean Energy Transitions...and to ensure a sufficiently large waste stream to justify infrastructure investment
In addition to policies driving demand for secondary supplies, it will
be important for policy makers to address other potential externalities
associated with secondary supplies. They include supporting thedevelopment of collection and sorting programmes and incentivising
manufacturers to develop products that are easier to recycle.

Enhanced support for collection and recycling
Economies of scale play a major role in improving the economic
viability of recycling, and increasing collection and sorting rates is a
crucial starting point. In this context, government policies can play amajor role in facilitating waste collection. For example, althoughtraditionally applied to drinks containers, deposit-refund schemes
may have potential to increase collection rates of electronics andbatteries. Denmark introduced such a system in the 1990s toincrease collection of nickel-cadmium batteries (OECD, 2014).
Lower-volume minerals, such as cobalt, lithium or REEs, may require
collaboration across country boundaries, for example across theEuropean Union, to drive sufficient waste streams to warrant
infrastructure investment. Furthermore, concerted action may beneeded to discourage waste from being exported for the purpose of
avoiding recycling requirements and to ensure that products exported
for secondary use are held to similar end-of-life standards in thedestination country – for example, batteries contained in exported
used cars.

Extended producer responsibility
Waste collection can also be encouraged by making the
manufacturer responsible for the treatment or disposal of postconsumer products. In addition to incentivising collection, thisencourages manufacturers to reduce waste and to adopt productdesigns that facilitate recycling processes. Schemes like these havebeen deployed across a number of different product types, including
batteries, tyres, vehicles, packaging and electronic waste. Althoughsome extended producer responsibility schemes have led to very
high recycling rates, there can be major differences in performance
depending on policy design (Bio by Deloitte, 2014). Therefore, it isimportant that policy makers set clear definitions and objectives,apply those criteria equally to all market players, and take an activerole in enforcement.
Ultimately, a mix of policies will be necessary to ensure thatcompanies across the value chain incorporate recycling into theirbusiness activities. Depending on the market and national/regional
considerations, combinations of trading credits, subsidies and otherpolicy instruments can successfully support regional secondary
supply value chains that ultimately influence global markets.
In the remainder of this section, we will consider two potential
recycling cases in greater depth: batteries and electricity networks.

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Battery recycling: The amount of spent EV and storage batteries reaching the end of their firstlife is expected to surge after 2030, reaching 1.3 TWh by 2040 in the SDS

GWhAmount of spent lithium-ion batteries for EVs and storage by application in the SDS
1 400
Energy storage
1 200
Electric trucks
1 000
Electric buses
800
Electric two- andthree-wheelers

600

Electric cars
400
STEPS
200

2020

2025

2030

2035

Note: GWh = gigawatt hour.

2040
IEA. All rights reserved.

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Battery recycling: The battery recycling industry is in its nascent stages, but the picture is set
to change significantly from 2030 as an influx of spent batteries arrives
Although the volume of lithium-ion batteries available for recycling orreuse today is modest and largely dominated by batteries in waste
electronic products, the fast-paced growth of EV sales and thedemand for energy storage are poised to alter this situation
significantly by the end of the decade. As the share of electric cars in
the total car stock grows from today’s 1% to 18% in the STEPS and

There are two main ways to deal with the stream of spent lithium-ion
batteries – recycling and reuse. The first route involves recycling theused batteries to recover the valuable minerals like cobalt, lithium andnickel. This approach has several advantages. Recycling materials
can curb the volatility of the supply chain and prices of raw materials
for battery manufacturing, and can therefore play a pivotal role in

50% in the SDS by 2040, an influx of spent batteries is expected toarrive in the market, and is likely to pose serious waste management
challenges. For example, when all the electric cars sold in 2019 reachalleviating the energy security concerns of countries that are heavily
dependent on imports of these minerals.

the end of their lifetime, this would result in 500 000 tonnes of
unprocessed battery pack waste (Harper et al., 2019).
The total amount of spent batteries from EV and storage applications
is under 2 GWh today. Under the WEO 2020 EV and energy storage
deployment trajectories, the volume reaching the end of their first life
rises modestly over the period to 2030 to the tune of 100 GWh, andgrows rapidly thereafter to reach 600 GWh in the STEPS and over
1.3 TWh in the SDS by 2040. This represents over 20% of newbattery requirements in that year. At over 80%, the majority of thesespent batteries under the SDS in 2040 come from electric cars, while
over 10% will be from electric two- and three-wheelers, more than 5%from buses and trucks, and just over 1% or about 15 GWh from theenergy storage domain.

It could also reduce the environmental, social and health impacts
arising from mining large quantities of these minerals that are needed
to meet the expanding demand for batteries. Further benefits ofrecycling include reducing the energy used for and emissions fromthe production of lithium-ion cells. Argonne National Laboratory foundthat the use of recycled materials reduces both (Gaines et al., 2018).
The study reported that the most sizeable reductions in energy use
come from the recovery of the metals, whose initial extraction fromlow-concentration ores is very energy-intensive. Additionally, sulfur
dioxide emissions arising from cobalt, nickel and copper develoments
can be reduced by 65% to 90% depending on the recycling process
employed.

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Battery recycling: The projected surge in spent volumes suggests immense scope for recycling
Several methods for recycling lithium-ion batteries are currently inuse either commercially or at the pilot level. Before being recycled,
battery packs must be first discharged, stabilised and thendismantled to at least the module level. Once discharged, the cellcomponents can be separated into different material streams forfurther processing. Three broad categories of techniques, either
employed alone or in combination, are currently used for battery
recycling. These are mechanical pretreatment, pyrometallurgicalprocesses and hydrometallurgical processes.

recover lithium, nickel and cobalt. Umicore (Belgium) and JX Nippon
Mining and Metals (Japan) are some of the representative companies
that use both pyrometallurgical and hydrometallurgical technology,
while Brunp (China) and Valdi (France) use mechanical andhydrometallurgical technology.

Mechanical pretreatment primarily involves shredding and sorting
plastic fluff from metal-enriched liquid and metal solids. However, it
must be combined with other methods (usually with hydrometallurgy)
to recover most cathode materials, other than copper, aluminium andsteel casings. Few companies focus on this process: they include
AkkuSer (Finland), Retriev Technologies (United States) and Li-cycle(Canada).

major benefit of avoiding long and expensive purification steps, there
is a limitation that recovered cathodes can only be used for the
manufacturing of the same battery type (Northvolt, 2019; IEA, 2020;
Harper et al., 2019).

Pyrometallurgical recovery uses high-temperature smelting to reducethe component to an alloy of cobalt, nickel and copper. It is afrequently used method to extract valuable metals such as cobalt andnickel, despite its environmental drawbacks (such as the productionof toxic gases) and high energy costs. Hydrometallurgical recovery
uses aqueous solutions to leach metals from the cathode. This could
be followed by solvent extraction and/or chemical precipitation to

Additionally, an emerging recycling method known as direct recycling
removes the cathode or anode from the electrode for reconditioning
and reuse in a remanufactured lithium-ion battery without breaking
them down into individual materials elements. Although this has theCurrently, the global capacity for battery recycling is around180 kilotonnes per year (kt/yr). China accounts for almost 50% of thiscapacity and it is expected to retain its dominant position given thelarge amount of additional capacity it has announced, amounting to
1 000 kt/y (BloombergNEF, 2019). Most of the companies involved
today are independent refiners, but a broad spectrum of players frombattery manufacturers, original equipment manufacturers, miners
and processors are beginning to show interest in entering the market,
especially in Europe.

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Battery recycling: The reuse of EV batteries for second-life applications offers additional scopefor reducing primary supply requirements
A complementary measure to recycling is the reuse of the rapidly
growing pool of EV batteries for “second-life” applications. Spent EV
batteries tend to have terawatt hours of unused energy that no longer
meet the standards for usage in an EV, although they typicallymaintain up to 80% of their total usable capacity (IEA, 2020).
Repurposing used EV batteries could generate significant value andremaining capacity) further complicates the economics. Clear
guidance on repackaging, certification, standardisation and warranty
liability of used EV batteries would be needed to overcome thesechallenges.

Existing and announced lithium-ion battery recycling capacity tocome online by 2021 by region
kt/yr

ultimately help bring down the cost of EV charging stations,residential and even utility-scale energy storage to enable further
penetration of renewable power into electricity grids. Initial trials for

120

Asia
Japan
South Korea

100

second-life batteries have already begun. For example, in January
2020 Nissan Motor Co. and American Electric Power launched a pilot
study in Ohio that reuses expired Nissan Leaf batteries to test theirstationary storage characteristics. BMW introduced a plan to sellstationary storage products for peak load reduction and backup

China
Europe80

Switzerland
FinlandDenmark

60

NorwayBelgium

power storage in homes by reusing batteries from the i3 EV model.

40

SwedenGermany

However, a number of technological and regulatory challenges
remain for second-life applications to grow at scale. Chief among
them is their ability to compete on price given the rapidly falling costof new systems. Retired batteries need to undergo costly refurbishingprocesses to be used in new applications, and a lack of transparency
regarding the state of used batteries (e.g. storage condition,

France20

North America
CanadaAsia

EuropeNorth America

United States

IEA. All rights reserved.
Sources: IEA analysis based on company announcements, press researchand Swedish Energy Agency (2019).

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Battery recycling: Scaling up battery recycling needs to overcome various technological andcommercial challenges
While many companies are active or showing interest in the field,
lithium-ion battery recycling has yet to reach the maturity oftechnology needed to scale up sufficiently and become economicallyprofitable. The commercial viability of recycling depends on the costsof collecting and disassembling the batteries, as well as the value ofthe materials recycled. Unlike the lead-acid battery recycling industry,
which is already mature, the lithium-ion battery recycling industry stillneeds to address several challenges in order to reach scale andprofitability. Some of these are technical constraints, and others
involve economics, logistics and a lack of streamlined policies.
Although some companies and organisations collect spent batteries,
there are no comprehensive systems that dictate and guide thematerial collection processes at a national level in most countries. In
2006 the Battery Directive proposed by the European Union was animportant step in this direction, but not all members have reached the
mandated collection targets and the directive did not include specifictargets for each mineral present in spent EV batteries. In December
2020, the European Commission proposed a new Batteries
Regulation as an update to the older directive, which placed aparticular emphasis on lithium-ion batteries. The proposed new
regulation suggests mandatory sustainability and safety
requirements (e.g. carbon footprint rules, minimum recycled content,labelling and information) and end-of-life management obligations(e.g. producer responsibility, collection targets and obligations,
recycling efficiency targets) (see Box 3.5).
Specific guidelines or regulations for discharging, disassembling andstoring spent batteries are also lacking in most countries. China is
one of the few with some technical guidelines on dismantling andrestoring spent EV batteries, and retraining staff at carmakers (MIIT,2018).
Transport logistics for end-of-life lithium-ion batteries pose anotherchallenge. The high energy density of their cells, coupled with thepresence of flammable organic electrolytes, creates a risk of thermal
runaway. This requires more stringent safety measures to handle andtransport spent EV battery packs.
Technology bottlenecks include the lack of standardisation of designs
for battery packs, modules and cells. Different vehicle manufacturers
have adopted different battery chemistries, especially for thecathode, and they tend not to disclose information on their cell
designs and chemistries. This wide variety of cell types andchemistries in the market poses a major challenge to recycling, andespecially to the automation of recycling processes, as each battery
pack and module type requires different approaches for disassembly.

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Battery recycling: Policy can play a pivotal role in preparing for the exponential growth involumes of waste EV and storage batteries
While there is no standard policy framework that governs the end-oflife management of lithium-ion batteries globally, several policies
have been announced, mainly in the European Union, China, Japanand at a state level in the United States. Recent progress also
includes the founding of the Global Battery Alliance in 2017, whichaims to establish a sustainable battery value chain, from sourcing, towhich closes the loop by supplying batteries to the OEM (Umicore,2018).

Policy makers can consider three specific actions: (i) facilitating theefficient collection and transport of spent batteries; (ii) fostering
product design and labelling that help streamline the recycling
process; and (iii) harmonising regulations on international movementof batteries.

Secondly, early action in the product engineering and design phasecan help facilitate an efficient recycling process. The current designof battery packs is not optimised for easy disassembly. A more
standardised battery design with recycling in mind will allow easierdismantling and automation. Measures such as including labels or
QR codes on battery cells or battery packs, with information on thebattery components, chemistries and substructures, would not only
help streamline the recycling process, but also enhance safety by
better preventing fire hazards and explosions during battery
disassembly and smelting (SAE International, 2016; USABC, 2014).

Firstly, clear guidance on collection, transport and storage of end-oflife lithium-ion batteries is crucial. Policies enabling the exchange ofdata between key stakeholders in the process, including original
equipment manufacturers, will be necessary. For example, BMW,
Umicore and Northvolt have recently embarked on a joint project thataims to create a “closed life cycle loop” for battery cells. In thistechnology consortium, the EV maker (BMW) collects and deposits
its end-of-life batteries directly at the recycler (Umicore), then therecycler uses the recovered material to produce active cathodematerial. This material is then shipped to the cell maker (Northvolt),

Lastly, concerted regulatory action across countries to ensure thesafe, eco-friendly and affordable transport of batteries is essential.
The Global Battery Alliance has launched the concept of a “battery
passport,” which is a digital representation of a battery that contains
information about all applicable lifecycle requirements of asustainable battery, making it easier to identify and track batteries
throughout their lifecycle. This could not only support data sharing on
battery chemistries, origin and the state-of-health of spent batteries,
but also help countries harmonise their regulatory actions ontransboundary movement of spent lithium-ion batteries (WEF, 2020).

repurposing and recycling.

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Battery recycling: By 2040 recycling and reuse of EV and storage batteries could reduce theprimary supply requirement for minerals by up to 12%
Contribution of recycling and reuse of batteries to reducing primary supply requirement for selected minerals by scenario
STEPS

SDS
16%

800

16%

600

12%

600

12%

400

8%

400

8%

200

4%

200

4%

kt

800

2030 2040 2030 2040 2030 2040 2030 2040
Lithium

CobaltCopperSecondary production from recycled minerals

2030 2040 2030 2040 2030 2040 2030 2040

NickelLithium

Reuse in second-life batteries

CobaltCopperNickelShare of recycled minerals in total demand
IEA. All rights reserved.

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Battery recycling: Recycling and reuse of batteries can bring significant security andenvironmental benefits, although the need for continued investment in primary supply remains
We analysed the possible contributions from recycling and reuse ofspent batteries to reducing primary supply requirements for lithium,nickel, cobalt and copper under base-case chemistry assumptions.
Key inputs to the model are the lifetime of the different batteries, thebattery collection rate, the yield rate for each mineral, the reuse rate
and the reuse efficiency. We assumed the collection rate to increase
gradually to 80% by 2040, and the yield rate to vary according to thetechnical limitations for the extraction of each mineral using thecurrently available recycling methods. The reuse rates are much
lower than the collection rate for recycling as the use of second-lifebatteries faces many technical and regulatory obstacles.
The recycled mineral volumes are negligible in the 2020s, but they
start to make larger contributions to the total supply from 2030 andbecome much more significant by 2040. While recycling and reuse
assumptions are identical in the STEPS and the SDS, the higher
absolute deployment of EV and storage in the SDS makes thecontribution of the recycled minerals far more sizeable than under the
STEPS.

In the SDS, recycled quantities of nickel, copper, cobalt and lithiumfrom spent EV and storage batteries in 2040 are around 500 kt,
350 kt, 100 kt and 60 kt respectively. By 2040 secondary production
from recycled minerals accounts for up to 12% of total supply
requirements for cobalt, around 7% for nickel, and 5% for lithium andcopper. The projected contribution of reused batteries is relatively
smaller, reaching only 1-2% of total supply requirements for eachmineral in 2040.
This implies that the recycling of end-of-life lithium-ion batteries torecover the valuable minerals, and to a smaller extent their reuse as
second-life batteries, can relieve a proportion of the burden frommining them from virgin ores. Although this does not eliminate theneed for continued investment in primary supply of minerals, thecontributions from recycled minerals could be even more prominent
in the total supply if effective recycling policies are adopted more
widely across the globe, with larger benefits particularly for theregions with higher EV deployment.

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Box 3.5. EU Sustainable Batteries Regulation
In line with the European Union’s circular economy and European
Battery Alliance objectives, the proposed regulation addresses thesocial, economic and environmental issues related to all types of

The regulation’s general objective is to mitigate the environmental
impact of batteries and their effects on climate change and publichealth by controlling toxic substances and mandating waste

batteries, including those imported into the bloc. The proposal
covers the entire battery life cycle, and directly applies to lithium,cobalt, nickel and copper supply chains. The shift from a directive
to a regulation is aimed at increasing harmonisation and legal
certainty by giving the instrument binding legal force in all member
states. The Commission states that the regulation sets out“mandatory requirements for the greenest, safest and mostsustainable batteries on this planet” (EURACTIV, 2020). It ismanagement. As part of the EU Sustainable and Smart Mobility
Initiative, it aims to facilitate the transition to cleaner mobility bycontributing to a 90% reduction in transport-related GHG emissions
by 2050. The deployment of clean batteries reduces GHG
emissions while improving air quality. The proposal sets out
minimum levels of recycled content (12% cobalt, 4% lithium and 4%
nickel by 2030) and material recovery (90% cobalt, 90% copper,
35% lithium and 90% nickel by 2026) which will gradually increase.
Batteries sold in the European Union will have to carry a carbon
intensity performance label and comply with carbon footprintthresholds. The carbon footprint, recycled content and responsible
sourcing will be verified by recognised third-party entities. The
Commission is supporting research on batteries in line with theseobjectives, in particular through H2020 projects receiving
approximately EUR 500 million (European Commission, 2020b).

scheduled to enter into force on 1 January 2022.
Proposals for mandatory requirements range from sustainability
and safety, end-of-life management, labelling, electronic exchange
of information and digital passports. The aim is to enhance separate
collection of portable batteries to achieve 70% collection by 2030,
against less than 50% in 2018 (EUROSTAT, 2020) and prohibit any
landfilling. It also places obligations on economic operators for
product requirements and supply chain due diligence. The OECD
Due Diligence Guidance is incorporated into the legal instrument,
ensuring that sustainable batteries do not come at the expense of
responsible and sustainable supply chains (see Box 4.8).

The regulation is a critical step towards achieving both clean
mobility and high penetration of renewables, ensuring a fully circular
economic model. By facilitating a market for recycled products andwaste, it lays the groundwork for sustainable minerals development.

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Reliable supply of minerals

The Role of Critical Minerals in Clean Energy Transitions

Grid recycling: Unlocking copper and aluminium from today’s electricity networks
copper is over 85% (Henckens, 2021). Achieving this would reduce
primary copper supply requirements by over 9 Mt in 2040 in the SDS.
Aluminium has a global recycling rate of around 40% (UNEP, 2011).
The potential end-of-life recycling rate of aluminium is estimated to
be around 75% (IAI, 2020). Achieving this would reduce primary
supply requirements by around 32.5 Mt in 2040 in the SDS.

source of supply to the market, via recycling or reuse.

Copper and aluminium demand for grid replacement
Mt

Transmission and distribution systems contain a large amount of“locked-in” copper and aluminium. Analysis of the globally installedbase of overhead lines, underground cables and transformers
suggests that 150 Mt of copper and over 220 Mt of aluminium arepresent in these grids today. These volumes are roughly seven times
higher than current annual copper demand and three times higher
than that for aluminium. With current technologies, the locked-involume is projected to grow by almost 60% in the STEPS and some
75% in the SDS by 2040. When efficient collection and processing
operations are put in place, these volumes can provide a sizeable

50

40Overhead lines, undergound cables and transformers in electricity
grids have usually a design lifetime of around 40-60 years. After thisperiod, these assets need to be replaced. The displaced grid assets
can then be reused in a semi-fabricated form or the locked-in copperand alumimium can be recycled. Over 60 Mt of aluminium and copper
attached to grid infrastructure needs to be replaced by 2030 and a

Transmission

30

20
Distribution
10

similar amount between 2031 and 2040.
High end-of-life recycling rates are essential to reduce primary supply
requirements for grid expansion and replacement. Copper has a highend-of-life recycling rate: current estimates of copper recycling fromelectricity grid infrastructure are around 60% (higher than the average
copper recycling rates). But the potential end-of-life recycling rate of
PAGE | 190

2021-2030

2031-2040

Copper2021-2030

2031-2040

Aluminum

IEA. All rights reserved.

Sustainable and responsible development

The Role of Critical Minerals in Clean Energy Transitions

Sustainable andresponsible development ofminerals

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Sustainable and responsible development

The Role of Critical Minerals in Clean Energy Transitions

Failure to manage environmental and social impacts from minerals development will slow clean
energy transitions
The growth of mineral supply not only plays a vital role in enablingclean energy transitions, but also holds great promise to lift some of
the world’s poorest people out of poverty. Mineral wealth can, if
exploited responsibly, contribute to public revenue and provide
economic livelihoods for many. However, if poorly managed, mineraldevelopment can lead to a myriad of negative consequences,including:•Significant greenhouse gas (GHG) emissions arising fromenergy-intensive mining and processing activities.

•

Environmental impacts, including biodiversity loss and social
disruption due to land use change, water depletion andpollution, waste-related contamination and air pollution.

•

Social impacts stemming from corruption and misuse ofgovernment resources, fatalities and injuries to workers andmembers of the public, human rights abuses including childlabour and unequal impacts on women and girls.

In addition, these risks may lead to supply disruption, which could
slow the pace of clean energy transitions. It is therefore imperative
for both companies and governments to manage the environmental
and social impacts of mineral production.

Companies have a clear business case to address these harms to
reduce risk and maintain a social licence to operate. Consumers andinvestors are increasingly demanding that companies take theseissues seriously. Failure to respond to these social demands could
not only undermine reputation, but also lead to difficulties in raising
capital or even to legal liability.
Companies have increasingly implemented responsible practices
over the years. The adoption of corporate responsibility policies andprocesses at company level and via industry-wide initiatives has led
to improvements throughout mineral supply chains. However,
performance varies significantly among industry actors, with somesegments showing limited effort and more progress being needed
across the board. Challenges are more substantial where regulatory
safeguards are inadequate, and where systemic issues such as
labour informality, weak fiscal capacity and high inequalities are
persistent, such as in artisanal and small-scale mining (ASM).
Governments play an important role in promoting improvements inenvironmental and social performance. As supply chains become
more global, international co-operation to apply appropriate
standards will be critical to ensuring that the extraction and trade ofminerals are carried out sustainably and responsibly, and that the
supply of energy transition minerals remains uninterrupted.

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Sustainable and responsible development

The Role of Critical Minerals in Clean Energy Transitions

Mineral development andclimate change

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Sustainable and responsible development

The Role of Critical Minerals in Clean Energy Transitions

Emissions from minerals development do not negate the climate advantages of clean energy
technologies

tCO₂e per vehicle lifetime

Comparative life-cycle GHG emissions of a mid-size BEV and ICE vehicle
45
40
35
30
25

Fuel cycle (well-to-wheel)

20

Electricity

15

Batteries - minerals

10

Batteries - assembly and other5

Vehicle manufacturing
Base

High-GHG minerals
BEV

ICE
IEA. All rights reserved.

Notes: The “High-GHG minerals” case assumes double the GHG emissions intensity for battery minerals (70 kg CO2-eq/kWh compared to 35 kg CO2-eq/kWh in thebase case; other assumptions are the same). The values are for a vehicle manufactured from today’s manufacturing lines assuming dynamic global average gridcarbon intensity in the SDS (including transmission, distribution and charging losses, weighted for mileage decay over a 20-year lifetime). The ranges shown for BEV
represent cases for charging with a static low-carbon (50 g CO2-eq/kWh) and high-carbon electricity mix (800 g CO2-eq/kWh). Vehicle assumptions: 200 000 km
lifetime mileage; ICE fuel economy 6.8 Lge/100 km; BEV fuel economy 0.19 kWh/km; BEV battery 40 kWh NMC622. BEV = battery electric vehicle; ICE = internal
combustion engine; NMC622 = nickel manganese cobalt in a 6:2:2 ratio; g CO2-eq = gramme of CO2-equivalent; kg CO2-eq = kilogramme of CO2-equivalent; tCO2eq = tonne of CO2-equivalent; km = kilometre; kWh = kilowatt hour; Lge = litre of gasoline-equivalent.
Sources: IEA analysis based on IEA (2020a); Kelly et al. (2020); Argonne National Laboratory (2020).

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Sustainable and responsible development

The Role of Critical Minerals in Clean Energy Transitions

However, there is a growing imperative to tackle emissions from mineral development asenergy transition minerals involve higher GHG emission intensities

80
40
Processing

MiningAluminium

Cobaltsulfate

30
70

...

tCO2-eq per tonne of metal content

Average GHG emissions intensity for production of selected commodities

20

10

Iron and
steel

Zinc

RefinedcopperLithiumcarbonateClass 1nickel(sulfide)

Neodymiumoxide
IEA. All rights reserved.

Notes: Includes both Scope 1 and 2 emissions of all GHGs (the majority of which are CO2) from primary production. The values for lithium carbonate refer only to
CO2 emissions based on the weight average of brine and hard-rock production (denoted on a lithium carbonate-equivalent basis).
Sources: IEA (2020b) and Rio Tinto (2020) (steel); Nuss and Eckelman (2014) (zinc); data received from Skarn Associates (copper and nickel); Roskill (2020) andS&P Global (2021) (lithium); IEA (2020b) and Tost et al. (2018) (aluminium); Argonne National Laboratory (2019) (cobalt); Marx et al. (2018) (neodymium).
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Sustainable and responsible development

The Role of Critical Minerals in Clean Energy Transitions

Changing patterns of demand and types of resource targeted for development are set to exert
upward pressure on emissions

Lithium

20

tCO2-eq per tonne of nickel

tCO2 per tonne LCE-equivalent

GHG emissions intensity for lithium and nickel by resource type and processing route

15

10

Nickel (Class 1)

60

45

30

15

5

Lithiumcarbonate(brine)Lithiumcarbonate(hardrock)

Lithiumhydroxide(brine)Lithiumhydroxide(hardrock)Today's main pathway

SulfideLaterite(HPAL)

Laterite(matte via NPI)

Areas of future growth
IEA. All rights reserved.

Notes: LCE = lithium carbonate-equivalent; HPAL = high pressure acid leaching; NPI = nickel pig iron. Includes both Scope 1 and 2 emissions from mining andprocessing (primary production). For lithium hydroxide, the value of brine is based on Chilean operations and the value for hardrock is based on a product that ismined in Australia and refined in the People’s Republic of China (“China”).
Source: IEA analysis based on Roskill (2020), S&P Global (2021) and Vulcan Energy (2020) (lithium); data received from Skarn Associates (nickel sulfide andlaterite HPAL) and Trytten Consulting Services (nickel matter via NPI).
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Sustainable and responsible development

The Role of Critical Minerals in Clean Energy Transitions

Stronger action will be required to counter upward pressure on emissions from mineralproduction
The process of producing various commodities, such as fossil fuels
and steel, is a significant contributor to global emissions. For the
moment, emissions from producing minerals vital for clean energy
technologies are relatively small, due to their low production volumes.
However, these minerals require much more energy to produce perunit of product, which results in higher emissions intensity than othercommodities. For example, emissions from producing the averagetonne of lithium carbonate and Class 1 nickel are three and ten times
higher, respectively, than those from producing a tonne of steel.
The higher emissions relate to the fact that most energy transition
minerals have a lower metallic concentration in ore. While the metal
content in iron ore is typically 50-70% (IEA, 2020c), the average ore
grade for nickel is less than 2% and under 1% for copper. Lower
grade ores require more energy to extract the valuable fraction, andto move and treat the waste fraction (the “gangue”).
The effects are aggravated by deteriorating ore quality. The averageore grade for copper in Chile declined from 1.25% in 2001 to 0.65%
in 2017. As a result, fuel and electricity consumption per unit of minedcopper increased by 130% and 32% respectively over the same
period (Azadi et al., 2020). Given their large electricity consumption,refining and smelting operations are also a major contributor toemissions, especially when relying on coal-based electricity.

Future production is likely to gravitate towards more energy-intensive
pathways. Lithium production has been moving from brine-based
recovery (mostly in Chile) to mineral concentrate production fromhardrock (mostly in Australia). The emissions intensity of hardrockbased lithium carbonate production is three times higher than that ofbrine production. This is due in part to higher energy requirements inmining and also in refining, the latter being mainly carried out in China
where coal plays a dominant role in the power mix. In this context,
several companies in Australia are looking to integrate projects within
the country to lower these emissions.
There is also additional pressure from changing demand patterns forlithium. Demand is moving from lithium carbonate towards lithiumhydroxide, as the latter is more suitable for batteries with higher nickel
cathode chemistries. However, lithium hydroxide involves more
emissions as it requires an additional processing step to convert
lithium carbonate to lithium hydroxide (when produced from brine
resources).
Battery-grade nickel faces a similar situation. While sulfide resources
played a major role in the past, future growth is increasingly comingfrom laterite resources, which require more energy to produce. These
underlying pressures highlight the need for companies to takestronger action to address emissions across their value chains.

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Sustainable and responsible development

The Role of Critical Minerals in Clean Energy Transitions

The emissions intensity of production can vary considerably across companies and regions…

kg CO2/kg refined copper

Energy-related CO2 emissions intensity for an indicative refined copper production project under different energy consumption scenarios
5
Fuels

Electricity

4

3

2

1

Base case

Natural gas

Fuel shift

High-carbon
electricity

Low-carbon
electricity
Power shift

Renewables

Low-carbon
electricity

Renewables

Electrification
IEA All rights reserved.

Notes: The base case assumes a fuel mix of 33% coal, 33% diesel and 33% natural gas with a global average emissions intensity for electricity (463 g CO2/kWh).
The high-carbon and low-carbon electricity cases assume 600 g CO2/kWh and 240 g CO2/kWh, respectively, and renewables are assumed to be carbon neutral. The
electrification case assumes 50% of the energy demand from fuel consumption becomes electrified.
Source: IEA analysis based on Cochilco (2020).

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Sustainable and responsible development

The Role of Critical Minerals in Clean Energy Transitions...depending on operational practices, power sources and production pathways

kg CO2-eq/kg nickel

GHG emissions intensity for an indicative nickel production project under different grid scenarios and production pathways

60
50
40
30
20
10

High-carbon Avg. carbon Low-carbon High-carbon Avg. carbon Low-carbon
electricity
electricity
electricity
electricity
electricity
electricity
Sulfide

HPAL

Importedacid

High-carbon Avg. carbon Low-carbon
electricity
electricity
electricity
Laterite (matte via NPI)IEA All rights reserved.

Notes: Avg. carbon electricity = global average emissions intensity for electricity (464 g/kWh). The high-carbon and low-carbon electricity cases assume
600 g CO2/kWh and 240 g CO2/kWh, respectively. Includes both Scope 1 and 2 emissions from mining and processing. Imported acid HPAL assumes average
electricity carbon intensity.
Source: IEA analysis based on data received from Trytten Consulting Services.
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Sustainable and responsible development

The Role of Critical Minerals in Clean Energy Transitions

The carbon footprint of the electricity mix and the pace of future decarbonisation havesignificant impacts on the emissions profile of mineral production
Electricity mix and emissions intensity of power generation in selected regions
Electricity generation mix, 2019

gCO2/kWh

100%

80%

1 000

800

60%

600

40%

400

20%

200

0%

Emissions intensity of power generation
under the current policy context

Indonesia
China
Australia
United States
Chile
European Union

CanadaEuropean United
Union
StatesCoal

CanadaNatural gas

Oil

Chile

Nuclear

China

Australia Indonesia

Renewables

2019

2025

2030

2035

2040

Other
IEA. All rights reserved.

Notes: The emissions intensity under the current policy context is based on the projections in the Stated Policies Scenario. The values for Australia also cover
New Zealand as the two countries are modelled together in the World Energy Model.
Source: IEA (2020b).
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Sustainable and responsible development

The Role of Critical Minerals in Clean Energy Transitions

Minerals are needed for clean energy transitions, and sustainable mineral development needs
clean energy
Many aspects of mineral production contribute to climate change, andforemost among these are direct and indirect sources of GHG
emissions. Direct emissions, also called Scope 1 emissions, include
vented CO2 from waste rocks, emissions from fuel used in mining andrefining operations and GHGs from acid neutralisation, mineralbeneficiation (e.g. flotation), extraction and waste streams(e.g. tailings). Indirect emissions are either associated with thegeneration of purchased energy (e.g. electricity, steam and heat)(Scope 2) or any other emissions that occur in the products’ value
chain (Scope 3). Overall, Scope 3 emissions are the largest sourceof GHG emissions from the mining sector, representing well over twothirds of the total (McKinsey, 2020), which is why many companies
are taking steps to curb these emissions by partnering with end users,
such as the steel industry.
Even within similar production routes, GHG emission intensities vary
greatly between operators, depending on the technologies employed
and mine characteristics. For instance, a time-series life-cycle
assessment study, which looked at copper mining and smelting inAustralia from 1940 to 2008, indicated that the carbon footprint ofcopper produced at all sites over the time period ranged from 2.5 to
8.5 kg CO2-eq/kg copper (Memary et al., 2012).

In the context of Scope 1 and 2 sources, emissions from mineralproduction are largely driven by electricity consumption and fuel use.
Electricity serves multiple purposes throughout mineral development,
but refining activities are particularly electricity-intensive,
representing a large share of emissions that are linked to the grid’s
carbon footprint. Comminution, the process of crushing and grinding
solid materials, is estimated to consume up to 3% of all the electricity
generated in the world (NRCan, 2016). Meanwhile, fuels are mostly
used by vehicles (e.g. diesel consumption by trucks in ore haulingand loading operations) and to generate heat for processing steps.
Emissions from mineral development can be significantly reduced bya shift in fuel sources and by using low-carbon electricity. A simulationof an indicative refined copper production project under different
energy consumption profiles reveals a wide variation in emissions
intensity depending on the type of fuel used and the intensity ofelectricity supplied by the grid. Shifting all fuels to natural gas would
bring emissions down by 10%, while using renewable-based
electricity reduces CO2 intensity by about two-thirds. Further
reductions could be achieved through the electrification of fuel use.
When combined, electrification and renewable-based electricity havethe potential to reduce emissions intensity by almost 80%. Similar
trends are also visible in nickel production.

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Sustainable and responsible development

The Role of Critical Minerals in Clean Energy Transitions

Fuel switching, low-carbon electricity and investment in energy efficiency can significantly
reduce the emissions footprint of mineral production in the near term
Near-term strategies to reduce energy-related emissions include
increasing the share of low-carbon electricity, acting on energy
efficiency and switching to cleaner fuels.
Emissions from electricity use can be lowered by using low-carbon
electricity via corporate power purchase agreements (PPAs) or onsite renewable generation. Glencore, for example, built a 3 megawatt
wind turbine at its Raglan Mine in Canada to replace diesel power
generation. The project received funding from the Canadiangovernment to couple leading-edge storage technologies with an
Arctic-grade wind turbine and demonstrate that such a system canoperate reliably (NRCan, 2021). Meanwhile, BHP stepped out ofnearly 800 million dollars in contracts for coal-fired power in Chile andestablished 6 terawatt hour renewables power purchase contracts(Reuters, 2019a). Of note, PPAs need to go hand-in-hand with efforts
to lower the grid’s carbon intensity to be more effective. For better
results, low-carbon electricity can be coupled with higher power
demand resulting from increased electrification of equipment and theincorporation of batteries to safeguard flexibility in operations.
Additional emission reductions can be achieved through investment
in energy efficiency, for example through digitalisation, automatedprocess management and technological improvements (e.g. using
high-efficiency burners in furnaces). Glencore’s Nikkelverk refinery in

Norway, for example, implemented a portfolio of energy management
technologies to save over 30 gigawatt hours annually (Eurometaux,2019). The plant reduced its energy consumption by installing newtanks, electrical contacts and energy-efficient anodes. Moreover,waste heat from its sulfuric acid plant replaced previously electricallygenerated steam.
In the medium term, reducing or displacing diesel use in trucks is an
important element of many companies’ efforts. Options include
optimising material handling practices, using other transport means(e.g. conveyors) or switching to electric trucks. Some companies arealso exploring the possibility of using hydrogen. For example, Anglo
American is partnering with ENGIE to develop a hydrogen-poweredmine haul truck (Anglo American, 2019).
Companies are also increasingly reviewing options to tackle Scope 3
emissions, by shifting their business portfolio away from polluting
fuels (such as coal), using low-carbon fuels for shipping and working
with customers to co-invest in emission reduction measures. Anotheroption to reduce emissions is to scale up secondary production. An
assessment of current copper production routes in China shows that
producing copper from scrap has the potential to reduce GHG
emissions intensity to about a quarter of conventional routes (Donget al., 2020).

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An increasing number of mining companies are committing to reduce emissions...
Net CO2 emission reduction pledges for top 20 mining companies
CompanyVale
BHP
Rio Tinto
Glencore
Freeport-McMoRan
Codelco (Corporación Nacional del Cobre)
Fortescue Metals Group
Norilsk Nickel
Barrick Gold
Southern Copper
Newmont
Hancock Prospecting
KGHM Polska Miedź
Teck Resources
AngloGold AshantiFirst Quantum Minerals
Zijin Mining Group
Anglo American
Sibanye-Stillwater
MitsuiScope 1 and 2
2021-2030
Long term
33%
100%
30%
100%
30%
100%
40%
100%
15%
70%
26%
100%
i
25%
10%
30%
100%
33%
100%
30%
100%
27%
50%
100%

2021-2030
30-40% i
15%
40%
15%
50%

Scope 3

Long term
15%
100%
100%
100%

Notes: Reductions can account for CO2 removal (e.g. through afforestation or direct air capture) and emission credits (generated by emission reductions in othersectors). Long-term targets include pledges to be fulfilled in 2035, 2040 or 2050. i = intensity target.
Source: IEA analysis based on company filings or websites.
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Sustainable and responsible development

The Role of Critical Minerals in Clean Energy Transitions... but a wider range of companies needs to come on board if overall emission levels are tofollow a sustainable development path
With mounting pressure from investors, governments and otherstakeholders, the industry is increasingly aware of its environmental
footprint. The Responsible Mining Index reports that the vast majority
of companies track their performance on Scope 1 and 2 GHG
emissions, with over half disclosing comprehensive tracking data
against publicly stated targets. However, fewer companies review theeffectiveness of measures taken to manage emissions, and fewer stilltake actions to respond to such reviews.
Announced emission reduction targets have proliferated in recent
years among major mining companies. Two-thirds of the top 20
mining companies have established Scope 1 and 2 emissions
reduction targets for 2030. A further one-third have extended targets
to include long-term and Scope 3 reductions, with Glencore, Mitsui &Co. Ltd, and Newmont Corp. setting full net-zero targets.
While encouraging, companies with emission pledges account for
only a small proportion of global mining output – 25% for cobalt, andless than 20% for copper and nickel. Greater pressure fromgovernments, investors and end-use customers is needed to expand
emission reduction initiatives across sectors and regions, to include
junior miners, refiners and Chinese players. Major companies, via
their influence in non-operated ventures, can also influence theperformance of the sector as a whole.

Mineral development can also contribute to clean energy transitionsin other sectors. It can act as an anchor consumer for renewable
power, support demand response and export residual energy to
nearby users. In Chile, copper mines consume substantial amountsof electricity in an area with one of the world’s highest levels of solar
irradiation. This, coupled with the declining cost of renewables, has
led to an increase in renewable power capacity, which contributed toreducing the carbon footprint of the grid (OECD, 2019a). Moreover,in the refining sector, many electricity-intensive facilities provide
services to the power grid (e.g. grid stabilisation and peakattenuation) by allowing for temporary interruption of power supply or
demand reduction in instances of lower supply. Automated process
management helped these services become competitive in many
countries, such as France and Germany, particularly for aluminium,
zinc and copper production (Eurometaux, 2019).
To achieve net-zero targets, mining companies will have to address
all GHG sources in their value chain, including those hard-to-abate
sources. In this context, carbon offsets may complement directemission reduction measures. However, for offsets to be effective,
mining companies must verify that they result in permanent,
additional, real and verified emission reductions.

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Industry and market-driven disclosures are starting to improve transparency on sourcing andsustainability…
Industry sustainability initiatives have pushed companies towards
voluntary environmental impact disclosures, bridging the gap
between consumer and investor expectations and regulatory
processes. For example, the Mining Association of Canada’s
Towards Sustainable Mining (TSM) initiative has developed anassessment tool, the TSM Energy and Greenhouse Gas Emissions
Management Protocol, which calls for companies to develop acomprehensive GHG emissions management system, track andreport GHG emissions metrics and set reduction targets. The
Initiative for Responsible Mining Assurance’s GHG emissions
requirements in their Standard for Responsible Mining similarly
encourage companies to quantify and report emissions and todevelop specific emission reduction strategies.

Market mechanisms
Trading platforms and metal purchasers can also play an importantrole in encouraging companies to adopt voluntary approaches toreduce emissions. The London Metal Exchange (LME) trading
platform is aiming to provide consumers with greater transparency ofthe carbon footprint of traded metals, building on recent efforts toincorporate responsible sourcing standards into its brand listing
requirements. The new voluntary disclosures will be introduced in

2021 starting with aluminium, in the form of an “LME passport” and a
spot-trading platform so that producers can substantiate their carbon
emission claims. This digital passport will then be phased in for all
LME’s physically settled metals requiring certificates of analysis,
including cobalt and nickel from 2023 (LME, 2020). Public disclosureof sustainability metrics can incentivise producers to measureemissions in a credible manner, and ultimately lower their carbon
footprint to meet consumer demands. This in turn may eventually
support a price premium for low-emission metals. It can also act as
an indicator to policy makers to assess industry and consumer buyin (IGF, 2018a).
These industry initiatives actively support greater disclosure ofemissions data, but it will take time for them to mature enough toprovide consistent data and indicators. Moreover, further effort isneeded to develop standardised accounting frameworks to ensure
emissions data is comparable across companies. So far, industry
sustainability standards remain voluntary, and thus their impact islimited to companies that choose to implement them. Althoughgovernments can encourage companies to adopt these standards –as Canada does for TSM – policy support will be needed to provide
incentives for further uptake of transparency norms.

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Sustainable and responsible development

The Role of Critical Minerals in Clean Energy Transitions…while regulatory approaches to reduce mining emissions are often incomplete
Once an industry standard is broadly accepted, governments canplay a key role in turning voluntary commitments into legal
requirements. For example, the EU Batteries Regulation will mandate
disclosure of key sustainability metrics already reported on a
voluntary basis under industry standards (see Box 3.5). Voluntary
climate-related financial disclosures, such as the Task Force on
Climate-related Financial Disclosures, are also being progressively
incorporated into law, for instance in the United Kingdom and New
Zealand (Davies et al., 2020).

Inconsistent reporting frameworks
Governments also have a role to play in driving standardisation
among emissions accounting frameworks. Although companies are
increasingly expected to disclose GHG emissions, including any
indirect emissions in the value chain (Scope 3), the lack ofconsistency in reporting makes it challenging to compare data. Even
under the Greenhouse Gas Protocol, which is designed explicitly tocreate a corporate standard allowing comparable reporting,companies are free to choose which values to report, emission
category boundaries and relevant categories. Empirical research on
the copper supply chain demonstrated that GHG accounting
protocols were often lacking and differed dramatically between
companies (Lee et al, 2020). As such, policy support to standardise
accounting principles is necessary to bolster emission disclosures.

A suite of policy options for mining emissions
Government policies can drive companies to adopt emission
reduction strategies across their operations, including fuel switching
and investing in low-carbon electricity and energy efficiency. Thesecan be addressed through a suite of policies such as renewable
portfolio standards, energy efficiency mandates, emission
regulations and carbon pricing. In particular, allowing independent
power producers to enter the market could facilitate less emissionintensive power generation. For instance, in 2015 Chile mandated
power distribution companies to conduct tender processes to provide
energy to regulated customers, thus facilitating the successful
development of renewable-powered mines (CCSI, 2018).
R&D and innovation support is also key to lowering emissions inmining. For instance, in the context of the European Battery Alliance,
the European Union financially supports a “Zero Carbon Lithium”
project in Germany to find less water- and carbon-intensive ways to
extract the mineral (Energy Storage News, 2020). The Australian
Renewable Energy Agency and other government entities also
provided financial support for solar-powered energy generation at the
DeGrussa copper mine in Western Australia, which has the potential
to meet up to 90% of the mine’s daytime demand (CCSI, 2018). Clean
fuel standards can also impact mining operations given their use of
liquid fossil fuels and freight services (Government of Canada, 2020).

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Carbon pricing can complement other policies by providing incentives to reduce emissions
Carbon pricing holds potential to become an important component ofclimate governance, at both national and international levels. Carbon
taxation and emissions trading schemes can be an effective tool for
driving reductions in emissions in line with the “polluter pays” principle
while encouraging innovation. However, so far the impact of carbon
pricing mechanisms on the minerals sector has been limited to only
a handful of contexts.
In many cases, the impact of carbon pricing mechanisms on minerals
has been limited to the indirect effects of carbon pricing applied toelectricity or fuel use. This indirect effect is small as long as carbon
prices remain low. The carbon tax in Chile is a good example of theselimits. The tax applies to power generation, which may ultimately bepassed on to mineral producers in electricity contracts. The actual
impact is minimal due to the low level of the price: USD 5 per tonne
CO2-eq (ICAP, 2021). Further, the mining sector has sometimes been
exempted or received free allocation of allowances due to carbon
leakage and competitiveness concerns.
However, there are encouraging efforts to apply carbon pricing
directly to mining and mineral processing operations. Canada’s
output-based pricing system, which applies to provinces andterritories that do not have their own carbon pricing systems withcomparable stringency and coverage, targets large industrial
emitters. Among the sectors covered, the system puts a price onemissions occurring from mining and refining base metals such as
nickel, copper, zinc, lead and cobalt, in addition to a charge on fossil
fuels (Government of Canada, 2019). By combining direct andindirect carbon pricing, such schemes can provide further incentives
to lower emissions.
For carbon pricing to have a more widespread impact on the mining
sector's emissions, rigorous implementation will be needed andgovernments should send clear policy signals to this effect. For
instance, the Canadian government has proposed increasing thefederal carbon price by CAD15 per year from 2023, reaching CAD170
per tonne CO2-eq in 2030 (Government of Canada, 2021a). Suchpolicies can incentivise investment in emissions reduction measuresin project planning. However, uncertainty over carbon pricing indifferent jurisdictions complicates the picture for companies.
Some companies have established an internal carbon price withincorporate account systems. For instance, BHP has established a“shadow” carbon price ranging from USD 10 to USD 110/t CO2-eq. It
uses the price in scenario modelling to determine thecompetitiveness of fuels across sectors, to inform investment
decisions and asset valuations (BHP, 2020). The use of shadow
prices within company decision-making is a positive step to track andreduce emissions, but clear signals from governments on carbon
pricing remain crucial.

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Sustainable minerals development

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A holistic approach can help integrate sustainable practices in mineral development
Mineral development affects the local and regional environment indifferent ways. Related interactions must be managed carefully to
mitigate negative impacts and reduce associated risks. In thissection, we focus on three chief challenges that are present
throughout the mining value chain:•Land use change – This is the main source of direct andimmediate impacts on people, biodiversity and ecosystems. It
can result in the displacement of communities and the loss ofhabitats that are home to endangered species.

•

Water use – Mining generally requires large volumes of water
for its operations. It can also be a source of watercontamination, be it through acid mine drainage, wastewater
discharge or the disposal of tailings.

•

Waste generation – Mineral development results in massive
amounts of residues, both during extraction and after
utilisation, some of which are hazardous to human health.

Mineral development also entails other environmental aspects andimpacts, including air pollution from particulate matter (e.g. minedust) and gaseous emissions (e.g. sulfur and nitrogen oxides), andnoise pollution due to blasting and transporting activities.

Experience suggests that it is possible to manage these impacts
effectively via a combination of policy measures, robust project
management and technological solutions. In particular, integrating
environmental concerns at the early stages of project planning can
go a long way to ensuring sustainable practices do not come at a highcost.
In this context, employing a holistic approach enables an integrated
assessment of the drawbacks and benefits of different project
alternatives. Often there are trade-offs between different
environmental objectives. Open-pit mining, for example, has lower
energy requirements than underground mining, generally leading tolower emissions, but results in more land use change. However, there
are also cases where an alternative presents synergistic outcomes.
The recovery of minerals from waste streams (e.g. reclaimed copper
production) illustrates this, as it can reduce the amount of waste thatneeds to be disposed of, lessen the ecotoxicity of effluents and leadto lower GHG emissions (Hong et al., 2018).
Furthermore, taking an integrated approach to sustainability canenable better resource use and systemic innovation, often resulting
in lower overall energy needs (Lèbre and Corder, 2015). For
example, extracting multiple minerals from the same ore or reworking
tailings to maximise recovery rates are ways to increase production,
reduce pollution and often minimise other risks in parallel.

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Land use: Mining can displace communities and threaten natural habitats
Mining brings major changes in land cover. Open-pit mines, inparticular, can spread across several kilometres and usher indramatic changes to the surrounding environment. Undergroundmines have a lower surface impact, but still generally require areasfor processing, waste management and transport systems that havea sizeable aboveground footprint. Furthermore, mining activities canhave spillover effects in nearby regions, such as increased
urbanisation or the conversion of land to plantation forestry, which isused in the supply chain of related industries (Sonter et al., 2014).
Global estimates for the area disturbed by mining activities lie
between 0.3% and 1% of total terrestrial land surface (Tost et al.,2018).
The amount of land needed for mining varies significantly according
to the technologies employed, the minerals produced and projectcharacteristics. A recent study used satellite image analysis toassess land use change at three copper mines, showing results
ranging from below 5 to about 20 hectares of built-up land needed
per thousand tonnes of copper ore extracted (Murakami et al., 2020).
The highest values were tied to an open-pit mine in a mountainousand forested location in Indonesia, which aggravated spatial
requirements and related impacts, whereas the lowest values camefrom an underground mine in a Chilean desert. Other influencing

factors included mine productivity, ore grade and afforestation
initiatives.
Impacts from land use change have a cumulative nature and cancause far-ranging repercussions. In sensitive areas, such as habitats
of endemic species or traditional indigenous territories, engaging in
new mining developments might present a lower societal value thanmaintaining healthy ecosystems.

Intensity of mining pressure on biodiversity for selected minerals
CopperLead
Zinc
Bauxite
Iron
2

4

6

8

...

65
10
thousand MiBiD/kg
IEA. All rights reserved.

Note: MiBiD is a non-dimensional index based on data regarding land cover,protected areas and mining operations.
Source: Kobayashi, Watando and Kakimoto, 2014.

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Land use: The effects of mining projects on people and biodiversity
Activities, impacts and risks of mineral development related to land use change
Segment

Production

Activities

Distribution
and useRisks• The installation of a mine involves theclearing of an area for exploration,
initial processing and logistics• Noise pollution from operatingmachines and the transport ofmaterials• Biodiversity loss, sometimes
increasing endemic species’
vulnerability to extinction• Open-pit mines expand as production
progresses, while underground minesremain mostly with the same
superficial area throughout theirdevelopment• Habitat reduction and fragmentation,
resulting in the loss of fauna, floraand ecosystem services• Loss of cultural heritage sites• Tailings (waste materials left over aftertarget minerals are extracted from theore) are often stored in large dams

Processing

Impacts• Potential displacement ofcommunities in the area of the
project• Landscape change and labour
migration with impacts on local social
settings and lifestyles• Refining involves large facilities andsubstantial material flows• Landscape change• Railways and waterways are the mainmeans of transporting minerals• Habitat fragmentation• Noise pollution from trucks andmachines• Noise pollution (both in land andaquatic environments)

PAGE | 211• Soil erosion can lead tochanges in topography, soil
quality and water pollution• Failure of underground mine
excavations can lead tosurface subsidence• Spills of hazardous materials
or the deposition of toxic dust
can lead to soil contamination• Accidents during transport
can harm people and fauna

Sustainable and responsible development

The Role of Critical Minerals in Clean Energy Transitions

Land use: Appraisal and management systems can ensure projects follow a sustainable profile
Mitigating the damage from land use change requires the potential
land use issues to be considered before a project is approved.
Integrated management of environmental and social impacts canhelp ensure projects conform to regulatory requirements.
Environmental and social impact assessments (ESIAs), which
evaluate project alternatives with regard to their environmental
impacts, can support decision making by providing an understandingof present environmental conditions and future consequences of
proposed actions. Thus, ESIAs may identify areas that should remain
untouched or options to reduce environmental impacts. For example,
the Carajás S11D iron-ore project in Brazil is a case where the ESIA
and project appraisal process led to reduced impacts on a national
reserve, the use of technologies that do not require tailings dams anda transportation system without trucks (IBAMA, 2016).
ESIAs are now mandatory for most mining developments; however,their implementation still faces major challenges related to poor
integration in project planning, monitoring and community
engagement (IGF, 2019). The Intergovernmental Forum on Mining,
Minerals, Metals and Sustainable Development has released a
guidance document for governments on improving ESIA-related legal
frameworks. Project appraisal can also provide an avenue for public
participation and enable conflict resolution at an early stage of thedevelopment process. To support citizen engagement, theEnvironmental Law Alliance Worldwide published a guidebook forevaluating mining project ESIAs.
A major component of ESIAs is a set of measures addressing boththe mitigation of impacts and their eventual compensation, such as
the provision of alternative settlements for displaced populations.
These are consolidated in environmental management plans (EMPs),
which integrate regulatory requirements and company mitigation
efforts, such as pollution control, environmental monitoring,compensation projects and risk management. EMPs commonly takea continuous improvement approach to ensure that problems are
identified, corrected and procedures improved to prevent similar
occurrences in the future. These plans should be present in all project
phases. For example, before the start of an activity, they may provide
for wildlife relocation. During operations, EMPs can address issues
such as fugitive dust emissions control and the management of
hazardous materials. Lastly, a major concern for mining undertakings
is closure and relinquishment. There are hundreds of thousands ofabandoned mines across the world, posing multiple hazards – fromcollapsing tunnels to soil and water contamination – with entities incharge of site clean-up often either foregoing remediation or
restricting actions to highly affected areas (Gutierrez, 2020). Closureplans are a part of EMPs that help mitigate these risks by outlining
costs, strategies and activities related to decommissioning.

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Box 4.2. Mine closure: Australia’s Leading Practice Sustainable Development Program
Australia is a major mineral resources holder, with over 300 mining
projects in operation and the world’s second-largest reserves ofcobalt, copper, nickel and lithium (Australia Minerals, 2021). It is

Closure plans should reflect local circumstances and build on local
strengths, which are often a key factor for a successful transition
after relinquishment. Future uses may comprise agricultural activity,

also home to biodiversity hotspots and reference environmental
management initiatives. One of these is the Leading PracticeSustainable Development Program for the Mining Industry, a seriesof handbooks developed by experts, industry, government and nongovernmental representatives to serve as a reference both to mine
operators and regulators.

industrial development, ecosystem conservation or community use.
In this sense, planning for mine closure and rehabilitation requiresa holistic approach and stakeholder engagement. Furthermore, it isan essential part of the various phases of a mining development's
life cycle, from feasibility studies to project design throughout
operations and decommissioning. This involves: continuous
planning efforts; progressive allocation of financial resources, asset
review and divestment evaluations; and implementation of closure,including remediation and monitoring, until agreed-upon completion
criteria are met.

Australia has about 60 000 abandoned mines and often it falls tothe authorities to address these sites, such as in 2015, when theWestern Australian government took on responsibility for a recently
abandoned nickel mine (Campbell et al., 2017). The mine closure
handbook sets out approaches on how to prevent or minimise
adverse long-term impacts from mining. It states that mostAustralian jurisdictions require mine closure planning as part of theapproval process for mining activities. Moreover, regulators usually
have significant enforcement powers over company commitments,
often linked to financial securities. Post-mining land use planning isthus incorporated in project design, including measures to minimise
disturbance, establish stable non-contaminated landforms, ensure

Even after infrastructure removal and site rehabilitation, there is stilla need for ongoing management and monitoring until final
relinquishment is approved and new users take ownership andresponsibility for the land. Poorly closed and derelict mines provide
a negative legacy for governments, communities and companies,
while also leaving lasting environmental impacts. Best practicerecognises that the mining sector is a temporary user of land andthat sites should be returned to a state that enables the sustainable

progressive rehabilitation and enable subsequent use.

development of present and future generations.

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Water management: Energy transition minerals have high water requirements and posecontamination risks
Indicators for water use and water pollution for selected minerals
Wateruse
use(m3/kg)(m3/kg)Water

Water pollution

1.000

100 000.000

1 000.000

0.100

10.000
0.010
0.100
0.001

0.000

0.001

BauxiteIron

Cobalt Copper Nickel

REE

Lithium

0.000

CobaltCopperNickelREE

LithiumFreshwater eutrophication potential (kgP-eq/kg)
Freshwater ecotoxicity (CTUeco/kg)
IEA. All rights reserved.
Notes: REE = rare earth element; CTUeco = comparative toxic unit for ecosystems; kgP-eq/kg = kilogramme of phosphorous-equivalent per kilogramme; m3/kg =cubic metres per kilogramme. Lithium data is for brine-based resources. REE refers to neodymium iron boron (NdFeB) magnet.
Source: IEA analysis based on Farjana, Huda and Mahmud (2019) (cobalt, copper, nickel); Jiang et al. (2020) (lithium); Marx et al. (2018) (REE); Tost et al. (2018)(bauxite and iron).
PAGE | 214

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Water management: Mining is a major water user and can cause long-lasting water pollution
Mining is a water intensive activity. Copper facilities alone withdrew
over 1.3 billion cubic metres of water in 2006 (Gunson et al., 2012).
Water is used along the production value chain, from exploration toprocessing (e.g. flotation uses water to concentrate mineral ores) andtransport. It is a major input of many standard operations, such as
cleaning, cooling, dust control and pumping. Energy transition
minerals often have higher water needs than other commodities,
although this varies according to the production process. Water
consumption levels for nickel and copper production, for example, aremore than double in hydrometallurgy compared with the morecommon pyrometallurgical method (Northey et al., 2014).
However, the most long-lasting impacts from mining do not comefrom water consumption. Acid mine drainage, resulting from waterflows coming into contact with sulfide-rich materials, can persist longafter a mine has been closed. Moreover, tailings ponds pose a risk ofcontamination to downstream water bodies, including extensive
damage resulting from potential dam failure. Meanwhile, mines that
employ dewatering operations (when groundwater inflows are
pumped out to maintain access to the site) can cause a decrease in
the surrounding water table or contaminate communicating aquifers.
Water pollution is particularly worrisome in the processing stage,
where grinding, milling and concentration methods generate toxic
effluents loaded with heavy metals and chemicals.

The associated contamination potential varies significantly among
different resources, processing routes and means of disposal.
Lithium production involves the highest eco-toxicity risks, mostly due
to its leaching process. Moreover, the shift from traditional brinebased production to rock-based lithium leads to an almost tenfold
increase in eco-toxicity values (Jiang et al., 2020). Water pollution isespecially problematic in China, where REE production was
conducted illegally or in unregulated small-scale activities until
recently. There are numerous wastewater ponds, formerly used forleaching activities, abandoned near mining sites. China is taking
steps to change this picture by remediating polluted areas andenacting stricter regulations to prevent new sources of contamination.
Mineral development can also affect the marine environment.
Seabed mining can lead to significant water pollution through therelease of dewatering waste or side cast sediment with fine particles
and heavy metals (Miller et al., 2018). Deep-sea tailings placement,
which involves the dumping of tailings in the ocean, also poses highcontamination risks. Indonesia is one of the few remaining countries
with mining activities that still use this disposal method. Legislationfrom 2001 outlawed marine tailings disposal, but two copper
developments that already used deep-sea disposal before thisremain in operation and a new nickel project is applying for a permit
despite the existing regulatory framework (BloombergNEF, 2020).

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Water management: The effects of mining projects on water resources
Activities, impacts and risks of mineral development related to water
Segment

Activities

Impacts

Risks• Reduced availability for other uses
due to increased overall demandor lower quality of sources• Increased water stress in thearea and depletion ofgroundwater resources• Mining frequently encounters water
resources, such as aquifers, creating
the need for mine dewatering• Pollution of water bodies bydischarged effluents, including
leachate, process water and othereffluents• Contamination of aquifers or
downstream water by acids,
sulfates and metals• Mining often encompasses a large area
subject to rainfall and related drainage• Acid mine drainage and sedimentbuild-up in nearby waterbodies• Water is required for exploration(e.g. drilling), extraction, initialprocessing (e.g. ore crushing) andrelated operations

Production• Reduced surface water storage
capacity• Tailings with high water content are
typically stored in artificial ponds

Processing

Distribution
and use• Water is used to separate andconcentrate minerals as well as for
operational needs such as dust control• Processing operations reducewater availability and generate
effluents rich in chemicals andmetals• Increased water stress in thearea• Water is used in pumping and totransport minerals through pipelines• Pollution of water bodies• Spills can occur during thetransport of minerals by ship,
rail or pipeline

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Water management: An integrated approach can help to address water needs sustainably
Water availability and demand depend on geographical conditions,the number of users and their different needs. That is the reason whywater management increasingly requires an integrated catchment
approach, addressing water systems at a basin level to betterco-ordinate water uses and flows. This generally involves engaging
stakeholders to address two major topics in a participatory manner.

Fulfilling water needs
There are several policy options to regulate surface and groundwateruse, including the control of withdrawal through permits, economic
instruments – such as pricing and setting a market for water rights –and defining standards for efficiency of use. These regulations often
rely on monitoring systems that cover related flows and reservoir
levels, to both verify compliance and ensure the sustainability ofwater sources.
Mining can improve its water footprint by reducing its water needs orby using alternative sources. Efficiency can be gained by reducing
losses (e.g. minimising wet areas, filtrating tailings, monitoring
pipelines), using dry processing technologies and by replacing
evaporative cooling with less water-intensive methods. Furthermore,mining operations can often use water that has lower quality, such as
water from mine dewatering and surface runoff, as well as recycled
process water, treated wastewater or desalinated seawater. The

Mining Association of Canada’s TSM initiative has a Water
Stewardship Protocol and Framework that sets benchmarks forcompany water management programmes.

Ensuring water quality
Effluents from the mining industry contain toxic substances, such as
residual metals and chemicals used for extraction and processing.
Comprehensive standards for the discharge of wastewater are a wayof guaranteeing that polluting substances remain within acceptable
limits, with acidity and metal toxicity being two key parameters toaddress (Opitz and Timms, 2016). These can be complemented byquality norms for water bodies, which align uses with requiredconditions and support the monitoring of affected ecosystems.
To reduce the load of pollutants discharged and meet establishedstandards, mining facilities can reduce the volume of water that iscontaminated (e.g. by managing runoff or covering waste rock andore piles) and prevent it reaching waterbodies (e.g. implementing adrainage system or designing the project to avoid contact withgroundwater). Furthermore, multiple treatment technologies allow theindustry to remove the different contaminants present in its effluents.
These include both simple measures (e.g. pH correction and the useof coagulants to precipitate metals) and advanced technologies, suchas membrane filtration or photochemical oxidation.

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Box 4.3. Managing groundwater: Lessons from Chile, where copper mines stand next toearth’s driest non-polar desert
Chile is the world’s largest copper producer, responsible for about
28% of global supply in 2019. It is also the most water-stressedcountry in the Americas, ranking 18th globally in terms of baselinewater stress (WRI, 2021). Moreover, most of its copper mines arelocated in the Andean mountain range in the dry northern part of thecountry, with approximately 54% of copper production occurring in
the Antofagasta province (Lutter and Giljum, 2019), which lies next
to the Atacama desert.
In this region, groundwater faces competing interests fromagricultural, domestic and industrial activities, including mining. The
development of copper, in particular, not only demands water fordust control and the extraction, separation and transport of ore, but
can also potentially contaminate the scarce water resources due toacid mine drainage, dewatering and the disposal of tailings.
However, until the mid-2000s Chile did not have a specific legal
framework to regulate groundwater use. The Water Code of 1981,
which implemented a water permit trading scheme, was designed
to address surface water use. In 2005 this legislation was amended
to include procedures related to groundwater management(Donoso, Lictevout and Rinaudo, 2020).

These included defining and allocating groundwater property rights,
regulating its use, establishing user associations and enabling thereallocation of rights through market mechanisms. Restrictions on
use apply when there is a decline in reservoir levels, exploitation
generates a risk of contamination, and to safeguard water flows forsensitive ecosystems. The industry has been looking to keep pacewith these developments. Anglo American, for example, took
measures to allow its Los Bronces mine to recycle over 78% of thewater it uses, upgrading a water transport system and using an
automated circuit for recirculation (Copper Alliance, 2021).
Chile has put in place new legal instruments to address water
stress. However, it could still benefit from a more integrated
approach to water management, as it is not able to manage
resources at river basin level or involve multiple stakeholders inco-ordination efforts (Donoso, 2018). Moreover, it faces a numberof implementation challenges, such as inadequate monitoring andenforcement, often leading to the over-allocation of use rights(Donoso, Lictevout and Rinaudo, 2020). This is aggravated by thefact that many reservoirs were already overexploited before therelevant legislation came into place, highlighting the importance ofregulating groundwater at the early stages of its use.

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Waste: Growing production volumes and declining ore quality are leading to a substantial
increase in waste volumes from mining operations
Waste generation from copper and nickel mining
Tailings

25

1.0%

20

Waste rock
250x

0.8%

4 000

15

0.6%

10
5

2010

2017

Mined output
Ore quality (right axis)

12 500750x

200x

10 000

600x

3 000

150x

7 500

450x

0.4%

2 000

100x

5 000

300x

0.2%

1 000

50x

2 500

150x

2010

2017

Mt

5 000

Mt

Mt

Mined output

2010

2017

Tailings

Waste rockTailings per mined output (right axis)

Waste rock per mined output (right axis)
IEA. All rights reserved.

Source: IEA analysis based on data updated and expanded from Mudd and Jowitt (2016).

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Waste: Mineral development generates vast volumes of residues that have, on more than one
occasion, led to large-scale environmental disasters
Mining is generating increasing volumes of waste. This includes
overburden (materials covering mineral resources), waste rock(uneconomic materials removed in ore extraction), and tailings (finegrained materials left after separating the valuable fraction of the ore).
The total amount of residues generated during mining can varydepending on the extracted commodity, methods employed andresource conditions (e.g. ore grade), but is usually quite significant.
In 2018 the mining and quarrying sector accounted for over a quarterof the total waste generated in Europe (Eurostat, 2021).
Typically, the volume of waste rocks is governed by the stripping
ratio, which refers to the amount of material removed to extract one
unit of ore. This ratio spans from 2:1 to 8:1 in surface extraction andis much lower in underground mining (EC JRC, 2018). Waste rocks
are often stored close to the mine, in piles or heaps. Meanwhile, theamount of tailings is related to the ore grade (i.e. the share of valuable
minerals in the ore). For copper and nickel, of which ore grades are
low, the waste rock and tailings generated to produce one tonne ofproduct amounted to almost 700 tonnes in 2017, 30% more than in2010 due to deteriorating ore quality and the predominance of
surface mining. Tailings are usually transported through pipes to a
tailings storage facility. The number of these facilities are estimatedat around 32 000 globally – among active, inactive and abandoned

facilities – containing around 223 billion tonnes of tailings (World Mine
Tailings Failures, 2020). The most common type is an embankment
dam that is designed to retain tailings and the associated water.
These facilities pose contamination risks for nearby soil and water
bodies and the hazard of dam failure. The locally called Rare EarthLake, for example, covers over 10 square kilometres of Bayan Obo,a mining town in China, and the soil surrounding it is highly enrichedwith heavy metals (Pan and Li, 2016). In 2019 the collapse of thetailings storage facility at Vale’s mine in Brumadinho, Brazil, led tomining waste surging across the surrounding areas and the death ofover 270 people (see Box 4.6). In 2015 Brazil had already seen thecollapse of the Fundão dam, which released 43 million cubic metresof iron ore tailings, polluting 668 km of watercourses from the DoceRiver to the Atlantic Ocean (Carmo et al., 2017).
Mining and mineral processing also generates hazardous waste, an
output related not only to the metals and chemicals handled in these
activities, but also to the presence of naturally occurring radioactive
material (NORM) in some ores. NORM can be further concentrated
during mineral processing and end up in waste, with the highest
activity concentrations having been found in scales from wet
chemical processes and in precipitator dust from high-temperatureprocesses (IAEA, 2005).

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Waste: The impact of mining operations on residues
Activities, impacts and risks of mineral development related to waste
Segment

Production

Processing

Distribution
and useActivities

Impacts

Risks• Excavation removes overburden, while
initial processing generates waste rockand tailings• Formation of waste piles, often withthe potential to result in aciddrainage• Soil contamination due to theleaching of waste piles• Seabed mining might discharge
plumes of contaminated waste
sediments and slurry in the seafloor• Generation of hazardous waste,
including heavy metals and, in somecases, radioactive material (NORM)• The beneficiation of minerals
frequently requires the use ofchemicals and the comminution ofores (e.g. grinding)• These processes generate waste
streams with fine metal particles and,in many cases, high toxicity• Processing equipment canconcentrate NORM, resulting intechnically enhanced substances(TENORM)• Products that reach their end of life
are discarded by users• Waste with higher radioactivity(TENORM) generally must be
disposed of through permanentstorage in specialised facilities• Generation of hazardous waste,often with mixed substances, such as
a combination of plastics and metals

Note: TENORM = technologically enhanced naturally occurring radioactive material.

PAGE | 221• Pollution of downstream water
bodies, including adjacentaquifers• Hazardous waste poses
health threats to workers aswell as environmental
contamination potential• Improperly managed waste
can end up being handled inunsafe environments orcontaminating ecosystems

Sustainable and responsible development

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Waste: A robust waste management framework can ensure that companies take steps to reduce
waste generation and handle waste safely
Sustainable waste management can ensure that instead of causing
environmental harm, mining residues are used as resources andsupport economic development. This usually follows a “reduce, reuse
and recycle” hierarchy, with disposal as a last resort.

Policies and plans to manage waste
Effective waste management policies ensure that companies takeaction to reduce the risks to the environment and public health fromwaste streams, take steps to reduce waste generation and undertake
proper disposal or recovery. The European Union’s Directive on
Management of Waste from Extractive Industries, 2006/21/EC, forexample, requires the use of best available techniques, including
techniques to reduce the volume of extractive waste and use ofresidues for backfilling or construction purposes. In addition, the EU
directive requires operators to develop waste management plans thatcover all aspects of waste management, including waste reduction,
storage, transport, monitoring and reporting, for each phase of
production.
Waste management plans typically involve establishing proceduresfor each type of residue. The International Finance Corporation
indicates measures for management of key mining waste categories
in their Environmental, Health and Safety Guidelines for Mining.

Dewatering tailings to reduce waste volumes and risks
Tailings dewatering techniques offer several benefits, including lessland use, lower risk of dam failure and reduced scope for aciddrainage. Thickened or dried tailings can be disposed of as a pasteor through dry-stacking, both of which create more stable disposal
structures and allow water recovery. Many methods exist to dewater
tailings, including pressure filtering and thickening agents, but until
recently, these methods had been used primarily at high-grade, lowthroughput operations due to technical limitations and high capitalcosts. However, a recent pilot project in the Escondida copper minein Chile demonstrated their feasibility at higher-throughput projects,
indicating that the economics of these technologies are improving.
Furthermore, increasing water scarcity and safety requirements
created in the wake of the Brumadinho disaster may provide the pushneeded to scale up tailings dewatering (Leonida, 2020).
Thickened tailings can also facilitate tailings reprocessing andsupport a more recovery-focused management strategy. This
enables waste reduction while also increasing mineral supply. Most
types of waste generated by mining can be used by other sectors, forexample, in cement production. Moreover, metals contained in
products that reach their end of life can generally be recycled, even
if this potential is still widely underexplored (see Chapter 3).

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Box 4.4. Managing tailings: Challenges for a Global Industry Standard
An analysis of tailings incidents showed that about 80% of the root
causes of dam failures are related to controllable factors (e.g. slope
stability), while only the remaining 20% result from uncontrollable
failures, such as earthquakes (Accenture, 2019). The most common
cause identified was overtopping (i.e. when water flows over thedam) as a result of overfilling. This suggests that improving tailings
management can mitigate associated risks. Best practicebenchmarks are a step towards better management, even if
companies’ actions often face shortcomings. In the Brumadinho
case, the German TÜV SÜD had certified the dam as safe months
prior to the collapse, and Vale’s automated monitoring equipment
had displayed worrying signs days before the event (BBC, 2019).

1. Respect the rights of project-affected people and meaningfully
engage them at all phases of the tailings facility life cycle.
2. Develop and maintain an interdisciplinary knowledge base withassociated technical, environmental and social information.
3. Design plans and criteria for the tailings facility to minimise risk
for all project phases – including closure and post-closure – andimplement a related monitoring system.
4. Establish systems and accountabilities to support the safety andintegrity of the tailings facility.

The Global Industry Standard on Tailings Management aims toprovide global best practices for tailings storage facilities and enable
zero harm to people and the environment. It is the result of a joint
effort of the International Council on Mining and Metals, the United
Nations Environment Programme, and the Principles for
Responsible Investment. Underpinned by an integrated approach totailings management, the standard’s goal is to prevent catastrophic
failure and enhance the safety of mine tailings facilities worldwide.
It is directed at operators and will be supported by implementation
protocols that provide detailed guidance for certification.

The standard comprises six key topics and related principles:

5. Prepare for emergency response to accidents and long-term
recovery in the event of catastrophic failure.
6. Publicly disclose and provide access to information about thetailings facility to support public accountability.
As is often the case, managing impacts can help mitigate relatedrisks and vice versa. The use of tailings for backfilling, for example,
can lower water consumption and minimise land use impacts, aswell as reduce subsidence or dam failure risks.

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Air quality: Tailored solutions for tackling air pollution
Sources of air pollution are concentrated in mine exploration anddevelopment, but also present further down the value chain during
smelting, refining and distribution. The main sources of air pollution

Typically, each source of emissions requires a different control
technology. Dust control can be addressed during mine planning withthe aid of air dispersion modelling and the development of windinclude (ELAW, 2010):

barriers. During operations, dust management may involve the useof containment measures, including soil stabilisation and vegetation
growth, as well as moisture control (e.g. by spraying water onto•

Particulate matter mobilised due to excavations, blasting, ore
crushing, transport of materials and wind erosion. It is alsopresent in fugitive dust from tailings facilities, stockpiles, waste
dumps and haul roads – as well as in exhaust emissions fromstockpiles and roads).

Gaseous emissions from fuel combustion in stationary
sources (e.g. drying and smelting operations) and mobile
sources, explosions and mineral processing.

Stationary sources can reduce emissions by using filters, wet
scrubbers, electrostatic precipitators and other treatment
technologies. Meanwhile, mobile sources can benefit from increased
electrification and the use of clean fuels (e.g. low-carbon hydrogen),which enable both lower gaseous emissions and a reduced overall
carbon footprint.

Particle emissions contribute to the majority of air quality problems at
mines, whereas gaseous emissions can affect a broader area and be
more problematic in smelting and refining. Gaseous emissions
include sulfur, nitrogen and carbon oxides; photochemical oxidants;
volatile organic compounds and hydrocarbons. These pollutants
have detrimental health effects and cause environmental impacts,
such as those associated with acid rain. Of note, some pollutantspresent in mineral deposits are released into the air during mining
activities, such as heavy metals and radioactive emissions in REE
extraction, posing occupational hazards.

Air pollution can be tackled by many of the same policy instruments
presented earlier in this section. For example, ESIAs and EMPs canaffect project design and ensure the implementation of measures tocontrol particulates and stationary sources. Additionally, jurisdictions
often set requirements for pollutant emissions, define overall air
quality standards and monitor pollution levels. In this context, theInitiative for Responsible Mining Assurance outlines requirements
related to the management of air contaminants in its Standard for
Responsible Mining and references the European Union’s Air Quality
Standards.

mobile sources (e.g. trucks).
•

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Responsible minerals development

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Mineral wealth has great potential to bring social and economic benefits to the local population,
but many challenges remain to ensure responsible development of energy transition minerals
Incidents at mine sites in the Democratic Republic of the Congo
categorised by type of risk

In most countries, mineral deposits are public resources and thegovernment is charged with managing them in a manner that brings
a public benefit. As demand grows for energy transition minerals, sodoes the potential for these public resources to contribute toeconomic growth and deliver just outcomes for national governments,
companies and communities. Unfortunately, there are myriad

Environment2%
Human rights
15%

examples where development of resources has not led to sustainableeconomic growth or has caused corresponding social harm.
There are many causes for this so-called “resource curse”. In manycases, public officials may act to subvert entrusted power over publicresources into private gain – i.e. corruption. These problems may beparticularly problematic in countries where mineral extraction
contributes a large share of fiscal revenues. In addition to corruption,mining operations may have negative impacts on people andcommunities due to environmental damage, inadequate safety andhealth protections and human rights violations. Downstream
consumers also contribute to these problems.
Some forms of harm are more attention grabbing than others,
particularly child labour concerns. However, other impacts may
ultimately be more widespread than child labour. Governments andcompanies increasingly cannot afford to ignore any of these impacts.

Legality
20%

Security
1%
Traceability
32%

Working
conditions
30%
IEA. All rights reserved.

Notes: The data reflects the proportion of registered incidents fitting the risk
category at artisanal and small-scale mine sites.
Source: RCS Global Group (2019).

This section begins with a discussion of the potential for mineraldevelopment to contribute to economic growth and create
sustainable jobs. Then, it turns to the primary forms of social harm
associated with energy transition minerals, including public
corruption, risks to public safety and health, child labour and gender
discrimination, with a focus on policy and regulatory strategies tomitigate these risks.

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Many mineral-producing countries rely heavily on revenue from mineral extraction,
underscoring the need for transparent management of mineral wealth
Share of minerals and metals in total product exports for mineral producing countries, 2019
Share between 50% and 30%

Share over 50%
Armenia
Bolivia
Tajikistan
Mongolia
Zimbabwe
Papua New Guinea
Ghana
New Caledonia
Uzbekistan
Sudan
South Africa
Mozambique
LebanonUgandaLiberia
Tanzania
Madagascar
Lesotho
Niger

Botswana
GuineaSuriname
DRC
ZambiaBurkina Faso
Mali
GuyanaNamibia
Peru
Kyrgyzstan
BurundiEritrea
RwandaChile
Jamaica
Mauritania
Sierra Leone

0%

25%

50%

75%

0%

100%

AfricaC & S America
CaspianAsia PacificMiddle EastIn 23 African countries,
minerals represent over
30% of total product exports

25%

50%

75%

100%
IEA. All rights reserved.

Notes: The chart shows countries whose share (based on monetary value) is above 30%. Standard international trade classification codes 27, 28, 68, 667 and 971
were included in the minerals and metals category. C & S America = Central and South America.
Source: IEA analysis based on UNCTAD (2021).
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The economic benefits of mining must be managed with carefully designed legal frameworks
Although mineral production contributes to economic development inmany ways, the most direct contribution is through tax and royalty
revenue. In many countries this revenue source can be significant. In
Chile, for example, revenue from copper production averaged around
10% of the fiscal revenue between 2010 and 2019 (Cochilco, 2020).
However, without careful management, translating mining revenue
into economic prosperity can be a daunting task. Volatile commodity
prices often lead to procyclical public spending, which undermines
the effectiveness of government expenditure in promoting economic
growth. In addition, a high reliance on export revenue from minerals
could lead to underinvestment in other sectors, making the economy
more vulnerable to changes in global commodity prices. This
underscores how fiscal revenues from mining must be used wisely tosupport diversification of the national economy.

The relationship between companies and communities
While mining brings in large amounts of revenue, the contribution tolabour demand may be relatively small and may vary throughout the
project life cycle. Governments have used various strategies to define
expectations for the relationship between companies andcommunities and to foster “links” to other aspects of the domestic
economy, such as the development of a local supplier industry tosupport mine operators (GIZ, 2016) (see Box 4.5).

Clear expectations for each phase of the project will help to ensure asustainable relationship between the project developer and the local
community and to enable the community to prepare for expected
shifts in economic activity. Further, if the economic contribution isstable throughout these phases, it is likely to contribute to the project
developing a social license to operate.
Mine operators often contribute to local communities by developing
local infrastructure, providing training opportunities or making direct
financial payments to community institutions. Given thesecontributions, companies and governments often negotiate“community development agreements” either voluntarily or pursuant
to legislative requirements (Otto, 2018). In Canada, for example,
there is a well-developed practice of developing impact and benefit
agreements between companies and indigenous communities(NRCan, 2020). Provided that community development agreements
are implemented in an inclusive and transparent fashion, they cancreate a structured framework for stakeholder engagement anddefine expectations for community investment.
Separately, governments may require companies to assess socioeconomic impacts of mining projects and develop appropriate
mitigation plans prior to obtaining approval. This can take place
alongside assessment of environmental impacts where alreadyrequired.

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Box 4.5. Fostering local “linkages” in Chile
Resource-rich countries often adopt policies designed to facilitate
inter-sectoral “linkages” that create jobs, transfer technology,
encourage entrepreneurship and increase local equity (Ramdoo,

Chile also supports local suppliers directly through programmessuch as the World Class Suppliers Programme, which identifies andfunds innovative local suppliers to address specific operational

2016). In many cases, the role of local suppliers is difficult to assessdue to inconsistent or limited data. Initiatives like the Local
Procurement Reporting Mechanism aim to provide better data forgovernments and companies to manage the economic impacts andchallenges. Suppliers are supported throughout the implementation
phase to allow testing of ideas within real-time operations, andbenefits of local procurement.
Rule-based numerical local content requirements, althoughcommon, can be difficult to implement if not clearly defined – inZambia, for example, an earlier law had no definition for “local” (IGF,2018b) – and may give rise to trade disputes (Korinek and Ramdoo,2017). As an alternative, countries may pursue horizontal policies
targeted at fostering industrial development, innovation and skills
training (OECD, 2019b). Chile, for example, directs revenues frommining to support innovative projects through a government-fundedpartnership, Fundación Chile, which operates like a venture capitalfirm. This funding is not limited to the mining sector and has helped
to develop the salmon and wine industries. Chile has alsoestablished royalty-supported funds to support science andtechnology R&D and to provide local entrepreneurs with seedcapital and technical support (IGF, 2018c).

eventually to scale up to international markets (Navarro, 2017).
Despite some successes, Chile has not yet developed a competitive
cluster of mining services suppliers. Critics have noted that the scaleof supplier support programmes is too small to have the desired
impact, and that a comprehensive industrial policy is needed tosupport the transition of the sector towards higher-value products
and services (Lebdioui et al., 2020).
Although intended to foster the development of a local industry thatcan support economic livelihoods and drive economic development,
it is clear from these examples that policies designed to increase
local linkages can stumble without robust policy co-ordination. As
there are many drivers of local industrial development, including
access to capital, innovation funding and skilled labour, policy
makers must develop a comprehensive approach that addresses
the barriers to local industry without creating unintentional market
distortions.

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Corruption and bribery pose major liability risks for companies, but can be managed with
supply chain due diligence policies
Mining operations are exposed to higher risks in locations with
political instability, weak institutions and weak rule of law. The riskthat mineral revenues may be used to finance armed conflict hasreceived particular attention recently, with regulations coming into
force requiring mandatory supply chain due diligence (see Box 4.8).
Although conflict-related risks are currently low for energy transition
minerals, corruption and bribery risks remain high. A survey of foreign
bribery enforcement actions by the Organisation for Economic
Co-operation and Development (OECD) found that almost 20% ofcases occurred in the extractive sector, a category that includes oil
and gas production as well as mining (OECD, 2014). Further, energy
transition minerals are often produced in countries that score below

Most major mining companies prohibit bribery among theiremployees, but in order to be effective, such policies must be backed
up with additional measures, including risk assessments, training for
employees and investigation mechanisms (RMF, 2020a). Critically,
given the risks involved, companies should implement processes to
identify, prevent and mitigate risks across their full supply chains,
including risk-based due diligence (OECD, 2021a).

Corruption Perceptions Index for selected countries, 2020
Australia
CanadaUnited States
Chile
South Africa
Argentina
China
Peru
Indonesia
Philippines
ZambiaRussiaDRC

average in measures of perceived corruption risk.
Companies cannot afford to ignore the risk that their employees andbusiness partners may engage in bribery. In many countries,
corporations can be prosecuted for failing to prevent bribery within
their overseas operations. The potential liability can be enormous,with fines reaching hundreds of millions of dollars and potential
imprisonment for executives. Even short of prosecution, responding
to an investigation can be extremely costly. The average investigation
under the US Foreign Corrupt Practices Act lasts 38 months andcosts USD 1.8 million per month (Stanford Law School, 2020).

AfricaSouth
America
North
America
Asia
Pacific
Eurasia
25

50

75

100
IEA. All rights reserved.

Note. The index ranks perceived levels of public corruption where 100 is “veryclean” and zero is “highly corrupt”.
Source: Transparency International (2021).

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Governments in both producing and consuming countries can do more to mitigate corruption
by increasing transparency and supporting development of institutions and the rule of law
Corruption leads to numerous pernicious effects, including decreased
fiscal revenue, reduced economic growth and erosion of the rule oflaw (OECD, 2021a). Policy makers in both producing and consuming
countries are increasingly recognising these impacts as negativesocial externalities that must be addressed through expanded
support for legal institutions, transparency and the rule of law.
Transparency is often presented as a critical tool for addressing
corruption. If governments publicly disclose contracts and payment
and expenditure data, the argument goes, the public will be able tohold governments accountable for their actions, which can reduce
corruption and ensure that mineral wealth actually translates into
public benefit.
To support development of transparency practices, a coalition of
supporting governments, companies and civil society organisations
established the Extractive Industries Transparency Initiative (EITI) to
help countries improve governance in the sector. In order to receive
support, countries must apply to become an “implementing country”,
and in turn must agree to international oversight, including regularassessment of progress and adherence to specific reporting
requirements. EITI has developed a global standard setting out
transparency principles for governments with respect to licensing andcontracting, managing extraction operations, collection of revenue
and government expenditure.
EITI reports that most implementing countries are making at least“meaningful progress” against key metrics (EITI, 2020a). For
example, following EITI recommendations, Madagascar changed its
practices regarding publication of data about mining revenues owed
to local governments (EY, 2019). This has led to constructive
dialogue between the government and local officials, and EITI has
rated Madagascar’s progress on the issue as “meaningful” (EITI,
2020b).
EITI has been particularly successful in calling attention tovulnerabilities that increase the risk of corruption and in increasing
the availability of data (Sahla et al., 2021). However, scholars havenoted that simply adopting transparency processes may notnecessarily reduce corruption. In order to have a meaningful impact
on corruption, this type of information must actually reach the public
and the public must be able to sanction corrupt conduct (Lindstedt
and Naurin, 2010). Thus, further effort is needed to support the
distribution of information in a format and language the public canunderstand, and to further develop local institutions to reduce
corruption risks and ensure that corrupt officials are held to account.

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Minerals workers and the public face various health and safety risks, including accidents andexposure to toxic chemicals
Although it is difficult to compare countries, existing evidence
indicates that mineworkers are subject to significant health and safety
risks. In the United States, for example, the extractive sector has
among the highest fatality rates – 14.6 per 100 000 workers,
compared to 9.7 for the construction sector (US BLS, 2020).

Types of risk to the health and safety of mine workers
Category

ExamplesSafetyAccidents involving machinery, vehicles orrockfalls in underground mines

ChemicalExposure to acids, carbon monoxide orparticulate matter such as silica dust

BiologicalInsect bites or contact with animals

PhysicalLoud noise, radiation or heat

Ergonomic

Frequent weight lifting or exposure to
vibration

PsychologicalSexual harassment or workplace violence

Practices vary among companies
According to the Responsible Mining Foundation, most companies
show a commitment to ensuring safe and healthy working conditions(RMF, 2020a). However, only two-thirds of these back thiscommitment with resources, including staff or financial capital.
Furthermore, only a few engage with workers’ representatives on theidentification of occupational health and safety risks or have systems
in place to ensure their operations provide gender-appropriate safety
equipment. Even fewer have systems in place to protect women
workers from sexual harassment and violence.
Adopting clear risk management policies can help companies toreduce potential harm, both to workers and to the public at large. Risk
is a function of the frequency of an event and the magnitude of its
potential consequences, and policies can act on both inputs to thisequation. Prevention policies include work permit systems, whichassess and set requirements to ensure the safety of work
procedures, and the installation of monitoring equipment(e.g. flammable gas detectors). In parallel, policies can help tomitigate the consequences should an incident occur by requiring
personal protective equipment (e.g. helmets and gloves) anddeveloping and exercising emergency response plans.

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Box 4.6. Tailings dam collapses at Brumadinho (Brazil)
On 25 January 2019 a dam failure at an iron ore mine operated byVale S.A. near the city of Brumadinho, Brazil, released an enormous
wave of mud that flowed for nearly 10 km, killing over 270 people

weak enforcement and relaxation of environmental laws (Fernandes
et al., 2016). Despite having been established in 2017 with the aimof increasing regulatory autonomy and budgets, the National Mining(Watson, 2020). This disaster has led to major pressure on mine
operators across all minerals from regulators and investors alike,
especially as it came on the heels of high-profile dam failures in thesame state in Brazil in 2015, which killed 19 and caused vastenvironmental damage, and at the Mount Polley copper mine in
Canada in 2014 (Cornwall, 2020).

Agency has had continued budgetary difficulties and limited
resources for inspections, with just 34 inspectors responsible for

Much of the commentary following the Brumadinho failure has
centred on the method of construction – known as upstream
construction. Some evidence suggests that liquefaction (when thesolids in the tailings pond act as a fluid, allowing material to flow
downstream as the dam collapses) is more likely with upstream
construction (Kossof et al., 2014). However, commenters have also
noted that poor management and operational practices are more
likely to blame (Santamarina et al., 2019).
Within days of the Brumadinho disaster, the government announced
a ban on new “upstream” dams and ordered existing dams to be
decommissioned by 2021 (Reuters, 2019b). This prohibition was
subsequently enshrined into legislation. It is not yet clear whether
these laws will lead to safety improvements given the history ofnearly 800 dams (Jucá, 2019).
There are signs that these high-profile disasters have been a wakeup call for the industry. Faced with potentially enormous liability,
Vale has created a new safety executive board, updated emergency
plans and begun de-characterising nine dams built using the
upstream method (Vale, 2020). A number of other companies haveadjusted their safety practices as well, including Glencore, which
has committed to upgrade 17 dams that could pose stability
concerns under certain conditions (Glencore, 2019). As discussed
above, the industry pushed for the development of a new Global
Industry Standard on Tailings Management in August 2020,
designed to enhance safety at tailings facilities. Though theseactions are promising, the response has not been uniform. Since
2019 the Church of England Pensions Board, a major institutional
investor, has requested information about tailings dams from726 companies. Of these companies, only about 50% responded(Church of England, 2020).

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Health and safety protections are not uniform between large and small-scale mines
Operators of large-scale mines, smelters and refineries are typicallysubject to occupational and public health and safety regulations, andevidence indicates that effective regulation can lead to a reduction inrisks to workers from accidents and other adverse working conditions(Holland, 2019). The International Labour Organization has
developed many international labour standards and voluntary codesof practice that can reduce the risks to workers in these operations.
To a certain extent, companies can be expected to address safety
risks through voluntary action to avoid accidents that may incur costs
from lost productivity, civil liability and damage to public relations. As
companies pay increasing attention to maintaining a social licence tooperate, they may take greater effort to adhere to such voluntary
safety standards. Many international standards on safety alreadyexist, such as the Mining Association of Canada’s Towards
Sustainable Mining safety and health protocol and framework.
However, industry may not be capable of self-regulating for all typesof safety risk – particularly where large-scale risks are involved orwhere there is a lack of investor pressure. In these contexts, effective
enforcement or regulatory standards will be critical. For example,
weak enforcement may have played a role in the Mariana andBrumadinho dam collapses (see Box 4.6).

Artisanal and small-scale mining risks remain highConditions are usually worse where regulatory protections are
unenforced or non-existent. The problem is particularly acute for
ASM, where workers are typically paid only for what they produce
and lack access to health care or compensation in the event of an
accident (OECD, 2019b). A 2019 survey of cobalt ASM workers in
the Democratic Republic of the Congo (DRC) found that the working
conditions of most miners were “unacceptable”. Conditions inventilation shafts and underground mines tended to be hazardous
and all workers used protective equipment at only 2 of 58 mine sites.
The survey also found that the preceding year had seen more than
60 fatal accidents and over 100 accidents involving injury (BGR,
2019).
Efforts to “formalise” ASM activities may improve health and safety
conditions to the extent that formalisation allows the application ofsafety practices. A study of one such site in the DRC showed that the
co-operative responsible for the site removed overburden to allow
workers to access deposits safely, provided personal protective
equipment for workers, and carried out weekly briefings on safety andother aspects (WEF, 2020). However, the long-term viability of thismodel remains in question as the site closed down in 2020 (Reuters,
2020a).

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Artisanal and small-scale mining of cobalt gives rise to child labour concerns
The International Labour Organization has estimated that over a
million children work in mines and quarries (ILO, 2019). Child labour
primarily occurs in ASM activities and is associated most closely withthe mining of gold and cobalt. The problem is particularly acute in the
DRC, where 10-20% of supply comes from ASM (Roskill, 2021).
Although there is no reliable data on the prevalence of child labour,
surveys have found children present in about 30% of the visited ASM
sites in the DRC (BGR, 2019). 4 Studies have shown that children
working outside the home in the DRC is directly linked to poverty, as
children take on work to earn additional income (Faber et al., 2017).

mitigate child labour practices. However, in the years since,
companies have evolved their thinking in recognition of the fact thatASM provides a critical source of income for many people. Removing

The DRC has signed international conventions prohibiting childlabour, including ILO Conventions No. 138 on the Minimum Age of
Employment and No. 182 on the Worst Forms of Child Labour, andThere is some evidence that ASM formalisation can be successful at
reducing child labour concerns (WEF 2020; OECD, 2019b).
However, successes have so far been limited in scale (BGR, 2019),
and the DRC’s efforts in particular have been limited by regulatory
ambiguity in the mining code (OECD, 2019b). Continued multistakeholder engagement is needed, bringing together governments,
companies and civil society to improve the situation. In this regard,
the recent announcement that the DRC Minister of Mines is joining

its labour and mining codes generally meet international standards inprohibiting child labour, forced labour and child trafficking (US DOL,
2019). However, child labour persists where ASM activities takeplace outside the legal structure.
Following the publication of a major report by Amnesty Internationalcalling attention to this issue (Amnesty International, 2016), somecompanies initially committed to sourcing ASM-free cobalt in order to

4 The simple presence of children at a mine site does not necessarily indicate

a human rights violation. The ILO Convention on the Worst Forms of Childthat source of income could paradoxically exacerbate the problem(OECD, 2019b). This evolution is represented by the LME’s decision
to adopt a policy of non-discrimination between large-scale mining
and ASM (LME, 2019). Current industry initiatives such as the Fair
Cobalt Alliance and the Responsible Minerals Initiative now
emphasise formalisation of ASM sites to ensure that standards areupheld and actions taken to address the root causes of child labour.

the Cobalt Action Partnership is a positive step.

Labour applies to work that is by its nature “likely to harm the health, safety or
morals of children”.
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Inclusive legal frameworks and voluntary industry action can reduce the prevalence of theworst forms of child labour
Existing legal and regulatory frameworks do not always differentiate
between large-scale mining and ASM, essentially applying the samerequirements and limitations to all mines. This generally means that
ASM activities will be “informal” or “illegal”, as individuals will not beable to obtain an exploitation permit via a system designed for large
companies. Even where there are special provisions for ASM, there
may still be obstacles that discourage workers from working atformalised ASM sites. If enforcement is lax, or if the legal regime isburdensome, workers may continue to work at unregulated sites(IGF, 2017; IMPACT, 2018).
To be effective, policy and regulatory measures must address theroot cause – i.e. poverty – and create an alternative to mining for poor
children and families. While investment and technical support todevelop new formalised mine sites is needed, community
development and support for education and other social programmes
will be important complementary strategies. The IGF has developed
guidance on establishing a comprehensive ASM strategy to aid policy
makers in improving the legal framework.

Industry initiatives can be scaled up
For their part, companies can do more to address the worst forms ofchild labour in the mineral supply chain. It is not necessarily a goodsolution for companies to adopt blanket “ASM-free” policies as a
mitigation strategy because complete disengagement may
exacerbate the causes of child labour. As an alternative, companies
can seek to engage with formalised ASM and to work together withmulti-stakeholder groups to promote formalisation (OECD, 2019b).
Separately, companies should seek to apply enhanced due diligencemeasures to their operations. Although supply chain due diligenceremains voluntary for energy transition minerals, they are being
increasingly adopted into regulations and market rules, and amandatory due diligence requirement for all companies is currently
under discussion at the European Parliament (European Parliament,
2021). The OECD has developed a set of practical actions thatcompanies can take to address child labour based on the existingOECD Due Diligence Guidance, discussed in the next section.
Several industry initiatives already exist that combine several of theseelements, including the Responsible Cobalt Initiative, launched by the
Chinese Chamber of Commerce for Metals, Minerals and Chemicals
and the Fair Cobalt Alliance. While promising, the proliferation of
initiatives may cause some concern as they are not necessarily
co-ordinated and risk overlapping. Thus, continued engagement
throughout the value chain is needed, particularly to ensure
consistency and interoperability of standards.

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Box 4.7. Formalising artisanal and small-scale mining in the DRC
Despite longstanding recognition of the potential for formalisation,
as of 2019 the DRC had no more than five active formalised (orsemi-formalised) ASM cobalt sites (OECD, 2019b). The

agreements exist, but there have been at least two documented
projects so far – both initiated by buyers. A 2020 study found mixed
results. While both sites had eliminated child labour and madegovernment has promised reforms that may support formalisation.
In November 2019 the government mandated that all ASM cobalt
be sold to the newly formed Entreprise Générale du Cobalt, a
subsidiary of the state mining company. In March 2021 it releaseda responsible sourcing standard designed to support establishing
new ASM sites in the DRC (EGC, 2021), although the impact of thestandard remains to be seen.

improvements in safety practices, workers did not routinely use
protective equipment and critics have noted that the sites have not
led to economic or social benefits for workers (WEF, 2020). Since
that study, one of the two sites has shut down (Reuters, 2020a),while for the other, the buyer announced that it would suspend
purchases until it could confirm that it was free of human rights
abuses (Reuters, 2020b).

There are currently two models for formalisation of projects in the
DRC. In the first model, a registered co-operative can establish an
ASM site within an area designated by the government for ASM –From these examples, it is clear that long-term engagement with thebuyer is critical to ensure that the mines are economically viable.
Even with buyer support, structural barriers remain to scaling up thisknown as a Zone d’Exploration Artisanal (ZEA). The DRC currently
has 92 ZEAs in the cobalt producting region. However, these aremostly in geologically underexplored areas with less developed
mining infrastructure, and a 2019 study found only two producing

approach. Significant up-front investment is needed for geologicalanalysis and to purchase the necessary infrastructure, including
fences, machinery and protective equipment. In parallel, there is aneed for community development to provide alternative options forchildren (WEF, 2020). While formalisation has the potential to
improve conditions for ASM workers, a long-term commitment frombuyers and mining companies alike will be necessary to ensure thatsites within these zones (BGR, 2019).
In the second model, the concession holder enters into anagreement with a registered co-operative to operate the site, withthe concession holder setting standards for production andpurchasing all material (OECD, 2019b). It is unclear how many suchit actually leads to the expansion of opportunities for ASM workers.

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Government and industry can do more to address persistent, unequal impacts on women
Historically, women have been largely excluded from large-scale
mining. In the United States, women make up only about 14% of themining workforce (US BLS, 2021). IEA analysis shows that this figure
is similar in the European Union (IEA, 2020d). Although data is poor,
there is little reason to think the situation is different in developing
countries.
Women’s participation may be greater at ASM sites, as someestimates place women at around 30% of the workforce (IGF, 2018d).
However, women are most often employed in less lucrative “auxiliary
activities” at these sites due to cultural barriers and genderedassumptions that mining is “man’s work” (OECD, 2019b; IGF, 2018d).
Women also may lack access to finance to invest in equipment andoften remain fully responsible for domestic responsibilities, which
limits the time and energy they have available for work. Worse, they
are subject to increased risk of sexual and gender-based violence(GIZ, 2020) and can be driven to engage in sex work by financial
exploitation (IGF, 2018c).
Changes in the community associated with mining may also have adisparate impact on women, even if they do not engage directly inmining activities. For example, women may be marginalised from
community outreach by companies (RMF, 2020b), and the move froma subsistence to a cash economy may also give rise to family
disputes and increased risk of domestic violence (GIZ, 2020).

Industry responses have so far been lacking. The Responsible
Mining Foundation found that the mining sector ranked low in respectof Sustainable Development Goal 5 on gender equality (RMF &CCSI, 2020). Similarly, the foundation found in 2020 that among the
38 companies it surveyed, none had a system to regularly assess thecompany’s impact on women (RMF, 2020b).

Creating an inclusive environment for women
The industry can do more to create an inclusive environment for
women, both in their operations and in stakeholder consultations
concerning community impacts and working conditions. As a firststep, companies can conduct dedicated assessments of the impactof their activities on women and seek to improve genderdisaggregated data.
Governments can also play a role in promoting the inclusion of
women miners and community members in multi-stakeholder
consultations, as recommended by EITI (EITI, 2018). Regulatory
authorities can also implement training for government and law
enforcement personnel to ensure that they are prepared to intervene
and address rights violations. Governments may also fundprogrammes designed to reduce the barriers for women to work,
including providing reliable access to finance and social services toassist with childcare and domestic responsibilities.

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International co-ordination

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International co-ordination on sustainable and responsible extraction already exists
Selected initiatives categorised by activity area
Name

ClimateSustainability

Responsible
sourcing

Rights ofworkers

World Bank Climate Smart Mining
Initiative
European Battery AllianceFairnessandinclusivity

GovernanceEuropean Raw Materials Alliance
Extractive Industries Transparency
Initiative
Global Battery Alliance
Energy Resource Governance Initiative
Fair Cobalt AllianceInternational Council on Mining &MetalsIntergovernmental Forum on Mining,
Minerals, Metals and Sustainable
Development
Initiative for Responsible Mining
Assurance
Towards Sustainable Mining
OECD Responsible Business Conduct
Responsible Minerals Initiative
Responsible Minerals Foundation
Women’s Rights and Mining
Note: Primary activity type:= Technical assistance.

= Industry standardisation.

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= Research and analysis.

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International co-ordination continues to play a critical role in encouraging companies to identify
and address risks across their entire supply chains
Growing demand for energy transition minerals entails the expansionof supply chains and an increase in associated environmental andsocial risks for upstream and downstream companies alike.
Identifying and addressing risks across jurisdictions with a patchworkof legal frameworks and local contexts is indeed technicallychallenging and resource-intensive. But ignoring supply chain risks isincreasingly costly in light of pressure from consumers, investors andregulators. For instance, mining companies and traders have faced
criminal probes and financial sanctions due to corrupt practices in

Cobalt Industry Responsible Assessment Framework and the CopperMark adhere to the principles set out in the OECD Guidance, but go
beyond the risks explicitly covered by its Annex II. The expanding
coverage of due diligence frameworks and legislation reflects a
broader trend of investors, consumers and civil society increasingly
calling on companies to look more closely at their supply chains andreduce environmental and social harms through proactive
engagement, rather than “de-risking” by exiting fraught supply chains
altogether.

their supply chains in the DRC (OECD, 2019c).
A prime strategy to mitigate risks is enhancing traceability,
accountability, audits and other measures that allow companies toassess their supply chains. These efforts are supported byinternational frameworks for due diligence, such as the OECD
Guidance (see Box 4.8). The operationalisation of these frameworks
can be tailored to specific supply chains through industry standards.
The growth of an entire industry catering to the needs of companies
looking to implement these frameworks speaks to their broad uptake.
Certain industry initiatives are calling attention to a broader set ofrisks beyond conflict financing, serious violations of human rights andeconomic crime, with increasing attention paid to environmental
concerns. For example, the Responsible Minerals Initiative, theInnovation and due diligence
Innovation can also play a role in enhancing supply chaintransparency. For example, shifting internal management systems
from paper-based to digital documentation facilitates traceability andpublic access. The European Union, the Global Battery Alliance andthe LME are all looking at increasing traceability through digital“passports” attached to individual batteries or metals. Market players
are also considering distributed ledger technologies (blockchain) toensure integrity of mineral supply chain data. While technologicalsolutions alone cannot replace a company’s due diligenceobligations, they can play an important role in streamlining these
efforts.

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Box 4.8. OECD due diligence guidance for responsible supply chains
The OECD Due Diligence Guidance for Responsible Supply Chainsof Minerals from Conflict-Affected and High-Risk Areas (OECD
Guidance) aims to help companies achieve responsible sourcing ofare instructed to remedy shortcomings in supply chains rather thandisengage. In energy transition mineral supply chains, the OECD
Guidance has de facto become a core component of countries’ legal

minerals and avoid contributing to conflicts, human rights violations
and economic crime. It serves as a global reference for public andprivate stakeholders. Although it initially focused on minerals fromconflict-affected and high-risk areas, e.g. tin, tantalum, tungsten andgold, the scope is much broader: it can be applied to all minerals
and all types of upstream and downstream risks. It covers both ASM
and large-scale mining and is applicable globally, making it
increasingly difficult for companies to “opt out”. The OECD is
working on a complementary tool addressing environmental risks toenhance coverage of supply chain issues.

frameworks for responsible sourcing. Responsible sourcing
requirements based on the OECD Guidance are incorporated into
the EU Regulation on Conflict Minerals (currently only applicable totin, tantalum, tungsten and gold) and the proposed Batteries
Regulation. Similar requirements were implemented through the
U.S. Dodd-Franck Act and in several African countries (OECD,
2021b). The shift from a voluntary approach to mandatory legal
frameworks or market rules reflects broad global consensus

The OECD Guidance facilitates the prevention and mitigation ofhuman rights abuses, support to armed forces, and other risks suchas tax evasion, fraud and bribery. This is achieved through a fivestep framework involving establishing internal management
systems, identifying and assessing risks, developing a mitigation
strategy, carrying out independent audits and annual reporting.
Supply chain stakeholders must establish traceability or a chain ofcustody system to track minerals and undertake on-the-groundaimed at measuring the extent to which recommendations had been
incorporated into industry standards and effectively implemented.
This first exercise revealed significant gaps between the standards
under review and OECD Guidance, which were subsequently
largely remedied (OECD, 2018). Uptake studies are now underway
to evaluate implementation at a company level. While these
exercises alone cannot drive full compliance, they ensure ameasure of accountability in the rapidly expanding world of industry

assessments for “red-flagged” supply chains. Critically, companies

initiatives, and highlight implementation gaps for policy makers.

regarding enhanced supply chain due diligence.
In 2016 the OECD launched an Alignment Assessment project

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The international trade and investment regime is key to maintaining reliable mineral supplies,
but policy support is needed to improve application of environmental and social regulations
The global trade and investment regime has helped to reduce tariffs,
subsidies and other barriers to trade, enabling companies to weave
global supply chains to meet the market’s needs. At the same time,
this regime can be seen as limiting the policy options available togovernments to address environmental and social issues. Although
the trade system recognises governments’ authority in these areas,for example through exceptions to Article XX of the General
Agreement on Tariffs and Trade, progress on incorporating
sustainability norms into the international trade regime has been
limited and debate continues about including enforceable standards
in free-trade agreements (Bronckers and Gruni, 2021).
Governments are therefore looking to update their trade policies inline with civil society’s expectations and to balance this goal withstability of supply and national security considerations. Export
controls, subsidies to state-owned enterprises in the mining andprocessing sectors, or carbon border taxes could also lead to
distortions in free trade. Such measures reflect the potential tension
between international trade disciplines and the mainstreaming ofenvironmental and social concerns.
Further, the international trade regime remains largely deadlocked at
the World Trade Organization level, notably in respect of industrial
subsidies reform. Due to the lack of impetus for global trade

agreements, countries are increasingly shifting to bilateral or regional
agreements to secure supplies of raw materials. EU trade policy
strongly favours including environmental and social standards in suchagreements. For example, agreements under negotiation with Chile,
Australia and China, and the completed Comprehensive Economic
and Trade Agreement with Canada, all include commitments tomultilateral labour and environmental agreements and responsible
business conduct. Apart from the draft agreement with China, they all
include specific language on supporting uptake of the OECD Due
Diligence Guidance for responsible supply chains of minerals fromconflict-affected and high-risk areas. They reflect the important roleof international trade to promote consistency in standards. However,these commitments remain largely unenforceable as they are notsubject to the agreements’ dispute settlement chapter.
Although international trade undoubtedly plays a role in ensuring thestability of energy transition mineral supplies, governments mustachieve both security aims and a just transition. Encouragingly,
responsible and sustainable sourcing of energy transition minerals isincreasingly perceived as a pillar of security of supply, and not as anecessary trade-off. As such, trade policies should reflect thesestandards rather than rely on them to erect new trade barriers.

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Enhancing capacity building and knowledge sharing can address critical resource gaps
between countries…
Capacity building and knowledge transfer can be a particularly fruitfularea of co-operation, as experience and capacity varies greatly
between countries. Australia, Canada and the United States, all ofwhich have well-developed regulatory systems addressing
environmental and social concerns, are increasingly offering
technical assistance to countries with nascent regulatory regimes.

sustainable mining. In particular, these high-level initiatives can help
ensure consistent communications with all relevant ministries inresource-rich countries, and more generally ensure issues receive
appropriate levels of attention. To harness this potential, synergies
between initiatives could be better exploited, and new areas forknowledge sharing could be explored beyond mining frameworks.

Role of multilateral initiatives

Public-private collaboration

At a government-to-government level, countries work together
through institutions like the World Bank and the OECD to support
sustainable mining and supply chain practices. Separately,Some companies have achieved high levels of sustainability
performance, and governments can facilitate sharing of theseexperiences and good practices. For example, the Mining

governments have set up extraction-specific initiatives such as theIntergovernmental Forum on Mining, Minerals, Metals andSustainable Development (IGF) and the Energy Resource

Association of Canada’s TSM standard covers issues such as tailings
management, worker safety, child labour and relationships withindigenous communities. The Canadian government actively
promotes the TSM standard and supports uptake by other countries(Government of Canada, 2021b). The World Bank’s Climate Smart
Mining initiative also brings together public and private actors acrossthe mineral sector to facilitate collaboration. Industry andgovernments have thus stepped in to facilitate knowledge sharing on
a significant scale, but more is needed to achieve a comprehensiveminerals governance framework.

Governance Initiative (ERGI) to provide technical assistance.
The IGF provides a platform for more than 75 member countries todiscuss issues related to mineral resource governance and promotesustainable mining practices. In particular, it provides technicalcapacity building and shares best practices through its Mining Policy
Framework. Similarly, ERGI shares best practices on mining
governance through its ERGI Toolkit, which is primarily designed formineral-producing economies and focuses on responsible and

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The Role of Critical Minerals in Clean Energy Transitions...but there is scope for better alignment and co-ordination
To be sure, the proliferation of international initiatives has led toencouraging success stories, including the global adoption andimplementation of the OECD Due Diligence Guidance, the LME’s
responsible sourcing criteria and sustainability initiative, andcontinued improvement of transparency standards in producer
economies via the EITI. However, uncoordinated efforts can lead topotential duplication – where multiple initiatives form around thesame issue with different membership – or discontinuity whencompeting standards follow different approaches. Even where aharmonised approach emerges, to the extent that initiatives arevoluntary, some important players may opt out.
As discussed in Chapter 3, a high-level forum for co-ordination could
be pivotal in standardising environmental and social standards andco-ordinating activity on security of supply. There has been somesuccess at co-ordinating competing efforts, but only on certain
issues, for instance due diligence practices through the OECD
Guidance. Generalised organisations like the G7 and G20 have also
played this role in the past. For example, the Brisbane 2014 G20
Principles of Energy Collaboration reflected the need to makeminerals governance an integral part of countries’ energy security
policies. New or long-standing fora such as the Climate Smart Mining
Initiative or the IGF can also play an important role in channelling
discussion and co-operation on energy transition minerals.

An international governance framework
Despite increasing levels of global adherence to environmental andsocial standards, they generally offer few avenues for collective
action among governments. Policy integration through the European
Union or other regional blocs alone is also insufficient to ensure
consistency on a global scale. Therefore, a systemic approach isneeded to ensure countries take action not only in certain notoriously
fraught supply chains or in specific regions, but also for all minerals
that underpin the energy transition and across jurisdictions.
A governance framework for minerals should provide countries withthe tools they need to address GHG emissions, local and regional
environmental impacts and social and human rights risks. It could
ultimately contribute to maintaining a reliable supply of minerals
necessary for the energy transition. As such, the UN Environment
Programme’s International Resource Panel has underlined that“[t]here is a need for an international body with a similar role to thatof the International Energy Agency in the energy sector” (IRP, 2020,
131). The IEA’s energy security framework could thus serve as atemplate for international minerals governance, underpinned by data
sharing, co-ordination mechanisms and collective actions, fostering
sustainable and responsible supply chains that contribute to a lowcarbon economy.

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Annexes

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Scope
This report assesses the mineral requirements for the following clean
energy technologies:

Solar PV (utility-scale and distributed)








HydropowerBattery storage (utility-scale and residential)

Wind (onshore and offshore)
Concentrating solar power (parabolic troughs and central
tower)
Geothermal
Bioenergy for power
Nuclear power
Electricity networks (transmission, distribution, and transformer)
Electric vehicles (battery electric and plug-in hybrid electricvehicles)Hydrogen (electrolysers and fuel cells).

All of these energy technologies require metals and alloys, which areproduced by processing mineral-containing ores. Ores – the raw,
economically viable rocks that are mined – are beneficiated toliberate and concentrate the minerals of interest. Those minerals arefurther processed to extract the metals or alloys of interest.
Processed metals and alloys are then used in end-use applications.
While this report covers the entire mineral and metal value chain frommining to processing operations, we use “minerals” as arepresentative term for the sake of simplicity.

Minerals are not only used in the clean energy sector, but are also
used widely across the entire energy system, in technologies that
improve efficiency and reduce emissions. For example, the mostefficient coal-fired power plants require a lot more nickel than theleast efficient ones in order to allow for higher combustion
temperatures. However, here we focus specifically on the use ofminerals in clean energy technologies, given that they generally
require considerably more minerals than fossil fuel counterparts. Our
analysis also focuses on the requirements for building a plant (ormaking equipment) and not on operational requirements (e.g.
uranium consumption in nuclear plants).
Our report considers a wide range of minerals used in clean energy
technologies listed in the table below. They include chromium,copper, major battery metals (lithium, nickel, cobalt, manganese andgraphite), molybdenum, platinum group metals, zinc, rare earth
elements and others.
Steel is widely used across a broad range of technologies, but wehave excluded it from the scope given that it does not havesubstantial security implications and the energy sector is not a major
driver of growth in steel demand. Steel and aluminium are widelyused across many clean energy technologies, but we have excluded
it from the scope of this analysis. Steel does not have substantial
security implications and the energy sector is not a major driver of

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growth in steel demand. Aluminium demand is assessed forelectricity networks only as the outlook for copper is inherently linked
with aluminium use in grid lines, but is not included in the aggregate
demand projections. Overall aluminium demand projections are
regularly assessed as part of the WEO and Energy Technology
Perspectives series.
Projection results are available for download from the report
webpage: https://www.iea.org/reports/the-role-of-critical-minerals-inclean-energy-transitions.

Minerals in scope
Focus minerals

Other minerals

CobaltArsenic

Niobium

Copper

Boron

Platinum

Lithium

Cadmium

Selenium

NickelChromium

SiliconRare earth elements(Neodymium, Dysprosium,
Praseodymium, Terbium,others)Gallium

SilverGermanium

Tantalum

Graphite

Tellurium

HafniumTin

IndiumTitanium

IridiumTungsten

Lead

Vanadium

Magnesium

Zinc

Manganese

Zirconium

Molybdenum

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Methodology
DemandFor each of the clean energy technologies, we estimate overallmineral demand using four main variables:The pace of mineral intensity improvements varies by scenario, with
the STEPS generally seeing minimal improvement over time ascompared to modest improvement (around 10% in the longer term)mineral intensity of each sub-technology; andassumed in the SDS. In areas that may particularly benefit from
economies of scale or technology improvement (e.g. silicon and silver
use in solar PV, platinum loading in fuel cells, REE use in windturbines), we applied specific improvement rates based on the review

mineral intensity improvements.

of underlying drivers.

clean energy deployment trends under different scenarios;
sub-technology shares within each technology area;

Clean energy deployment trends under the Stated Policies Scenario(STEPS) and the Sustainable Development Scenario (SDS) aretaken from the projections in the World Energy Outlook 2020,
complemented by the results in the Energy Technology Perspectives
2020.
Sub-technology shares within each technology area (e.g. solar PV
module types; EV battery chemistries) are also taken from the World
Energy Outlook 2020, complemented by the Energy Technology
Perspectives 2020 and other sources.
Mineral intensity assumptions were developed through extensive
literature review (see Table) and expert and industry consultations,
including with IEA Technology Collaboration Programmes.

The report assesses demand from other sectors for the five focus
minerals using historical consumption by end-use applications,
relevant activity drivers (e.g. GDP, industry value added, vehicle
activities, steel production) and material intensities.

SupplyAnnual mineral production estimates are based on the analysis of theindividual project data provided by S&P Global (2021) andBloombergNEF (2020), and supplemented with public data sources.
Operating projects are defined as mines of which development stage
is operating, expansion or limited production due to some reasons.
Under-construction projects are taken to be mines of whichdevelopment stage is commissioning, construction planned,
construction started or preproduction.

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Secondary production is estimated with two parameters: the average
recycling rate and the lifetime of each end-use sector. The recycling
rate is the combination of the end-of-life collection rate (the amountof a certain product being collected for recycling) and the yield rate

Technology

technologies, Journal of Cleaner Production, 59, 260-273,
https://doi.org/10.1016/j.jclepro.2013.07.003
Fizaine, F. and Court, V., (2015), Renewable electricity
producing technologies and metal depletion: a sensitivity
analysis using the EROI, Ecological Economics, 110, 106–118,
https://doi.org/10.1016/j.ecolecon.2014.12.001(the amount of material a recycling process can actually recover). For
existing waste streams (e.g. industrial applications), we assume only
marginal improvement in collection rates, while for emerging
technologies such as lithium-ion batteries, we assume collection
rates increase at a faster pace. For batteries, the collection rates
gradually increase from around 45% in the early-2020s to 80% by
2040. For batteries, the yield rate is assumed to vary according to thetechnical limitations for the extraction of each mineral using thecurrently available recycling methods. The reuse rates are much
lower than the collection rate for recycling as the use of second-lifebatteries faces many technical and regulatory obstacles.

Frischknecht, R. et al. (2020), Life Cycle Inventories and Life
Cycle Assessment of Photovoltaic Systems, IEA PVPS Task
12, Report T12-19:2020. https://iea-pvps.org/key-topics/lifecycle-inventories-and-life-cycle-assessments-of-photovoltaicsystems
Giurco, D. et al. (2019). Requirements for minerals and metals
for 100% renewable scenarios, In: Teske S. (eds) Achieving theParis Climate Agreement Goals, https://doi.org/10.1007/978-3030-05843-2_11
IRENA (International Renewable Energy Agency) (2017),
Renewable Energy Benefits Leveraging Local Capacity for
Solar PV,https://www.irena.org/publications/2017/Jun/RenewableEnergy-Benefits-Leveraging-Local-Capacity-for-Solar-PV

Sources for mineral intensity assumptions
Technology

Sources

Solar PV

Candelise, C. et al. (2011), Materials availability for thin film
(TF) PV technologies development: a real concern? Renewable
and Sustainable Energy Reviews, 15(9), 4972-4981,
https://doi.org/10.1016/j.rser.2011.06.012

Sources

World Bank (2017), The Growing Role of Minerals and Metals
for a Low Carbon Future, https://doi.org/10.1596/28312
Private communication with researchers of early-stage
technologies
Wind

Carrara S. et al. (2020), Raw materials demand for wind andsolar PV technologies in the transition towards a decarbonised
energy system, European Commission Joint Research Centre(JRC), http://dx.doi.org/10.2760/160859%20

Carrara S. et al. (2020), Raw materials demand for wind andsolar PV technologies in the transition towards a decarbonised
energy system, European Commission Joint Research Centre(JRC), http://dx.doi.org/10.2760/160859%20
Månberger, A. and Stenqvist, B. (2018), Global metal flows in
the renewable energy transition: Exploring the effects ofsubstitutes, technological mix and development, Energy Policy,
119, 226-241, https://doi.org/10.1016/j.enpol.2018.04.056

Elshkaki, A., and Graedel, T. E. (2013), Dynamic analysis of the
global metals flows and stocks in electricity generation

Private communication with companies

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Technology

Sources

Technology

Sources

CSP

Watari, T. et al. (2019), Total material requirement for the global
energy transition to 2050: A focus on transport and electricity,
Resources, Conservation and Recycling, 148, 91-103,
https://doi.org/10.1016/j.resconrec.2019.05.015

Biomass

Ashby, M. F. (2013), Materials for low-carbon power, In
Materials and the Environment (2nd ed., pp. 349–413),
https://doi.org/10.1016/b978-0-12-385971-6.00012-9
Moss et al. (2011), Critical Metals in Strategic Energy
Technologies: Assessing Rare Metals as Supply-Chain
Bottlenecks in Low-Carbon Energy Technologies, EC JRC(Joint Research Center), https://doi.org/10.2790/35716

Pihl, E. et al. (2012), Material constraints for concentrating solar
thermal power. Energy, 44(1), 944-954,
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NEA (Nuclear Energy Agency) provided valuable inputs onmineral intensities for nuclear

Moss, R. L. et al. (2013), The potential risks from metals
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Valero, A. et al. (2018), Global material requirements for theenergy transition. An exergy flow analysis of decarbonisation
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Technology

Sources

Electricity
networks

BloombergNEF (2020), Copper and Aluminum Compete to
Build the Future Power Grid.

D: Transport and Environment, 67, 263–274,
https://doi.org/10.1016/j.trd.2018.11.004

Private communication with companies

Pavel, C. C. et al. (2017), Role of substitution in mitigating the
supply pressure of rare earths in electric road transportapplications, Sustainable Materials and Technologies, 12, 62–
72, https://doi.org/10.1016/j.susmat.2017.01.003

EV batteries

Technology

Argonne National Laboratory (2020), BatPaC Model Software
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Weiss, M. et al. (2015), On the electrification of roadtransportation–a review of the environmental, economic, andsocial performance of electric two-wheelers, Transportation
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Fernandez-Marchante, C. M. et al. (2020), Environmental andpreliminary cost assessments of redox flow batteries forrenewable energy storage, Energy Technology, 8(11),1900914, https://doi.org/10.1002/ente.201900914

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technologies
EV motors

Sources

Le Varlet, T. et al. (2020), Comparative life cycle assessment oflithium-ion battery chemistries for residential storage, Journal ofEnergy Storage, 28, 101230,
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Zhang, X. et al. (2016), Optimal sizing of vanadium redox flow
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Fishman, T. et al. (2018), Implications of emerging vehicle
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Technology

Sources

Hydrogen

Bareiß, K. et al. (2019), Life cycle assessment of hydrogen fromproton exchange membrane water electrolysis in future energy
systems, Applied Energy, 237, 862–872,
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Technology

Sources
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elle_cost_analysis_apu_feb2014.pdf
US Department of Energy (2015), DOE Technical Targets for
Polymer Electrolyte Membrane Fuel Cell Components,
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Fuel Cells and Hydrogen Joint Undertaking (2018), Addendum
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21%29.pdf

Private communication with companies

IEA. All rights reserved.

James, B. D. et al. (2018), Mass Production Cost Estimation of
Direct H2 PEM Fuel Cell Systems for Transportation
Applications: 2018 Update,https://www.energy.gov/sites/prod/files/2019/12/f70/fcto-sa2018-transportation-fuel-cell-cost-analysis.pdf
Kiemel, S. et al. (2021), Critical materials for water electrolysers
at the example of the energy transition in Germany,International Journal of Energy Research, January, 1–22,
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of industrial hydrogen production by alkalinewater electrolysis,
Energies, 10(7), https://doi.org/10.3390/en10070860
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Hydrogen Gas Production, http://www.divaportal.org/smash/get/diva2:1331089/FULLTEXT01.pdf
NEDO (2008), 燃 料電池用白金代替触媒 の研究開発動向 ,https://www.nedo.go.jp/content/100105282.pdf
Smolinka, T. et al. (2018), Industrialisierung der Wasser
elektrolyse in Deutschland: Chancen und Herausforderungen
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US Department of Energy (2014), Manufacturing Cost Analysisof 1 kW and 5 kW Solid Oxide Fuel Cell (SOFC) for Auxilliary
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Acknowledgements
This report was prepared by the World Energy Outlook (WEO) teamin the Directorate of Sustainability, Technology and Outlooks (STO),
in co‐operation with other directorates of the International Energy
Agency (IEA). Tae-Yoon Kim co‐ordinated the work and was the leadauthor, and he designed and directed the report together with Tim
Gould, Head of Division for Energy Supply and Investment Outlooks.
The other principal authors and contributors from across the agency
were: Simon Bennett (hydrogen, historical episodes), Francois Briens(renewables), Amrita Dasgupta (battery chemistry and recycling,solar PV), Pablo Gonzalez (solar PV, wind), Alexandre Gouy
(modelling), George Kamiya (lead on demand), Milosz Karpinski(lead on security policies), Jeremy Lagelee (international coordination), Lilly Lee (battery recycling), Laura Maiolo (renewables,
nuclear), K.C. Michaels (lead on environmental and social issues),
Toru Muta (lead on supply), Lia Newman (pricing), Tomás de Oliveira
Bredariol (environment), Leonardo Paoli (batteries), Sebastian
Papapanagiotou (electricity networks) and Rebecca Schulz(renewables, recycling). Marie Fournier-S’Niehotta and Eleni
Tsoukala provided essential support. The report relied on the
scenario modelling and analysis of the entire WEO team.
The report benefited greatly from contributions from other experts
within the IEA: Heymi Bahar, Piotr Bojek, Alan Choi, Elizabeth
Connelly, Yuanyuan Gong, Vanessa Koh, Peter Levi, Sakeena

Moeen, Susan Nakanwagi, Apostolos Petropoulos, Ryszard
Pospiech, Alan Searl, Jacob Teter, Kartik Veerakumar and Brent
Wanner. Justin French-Brooks carried editorial responsibility.
Therese Walsh was the copy-editor.
Mechthild Wörsdörfer (Director for STO), Pascal Laffont (Chief LegalCounsel) and Aad van Bohemen (Head of Energy Policy and Security
Division) provided support and guidance throughout the project.
Valuable comments and feedback were provided by senior
management and numerous other colleagues within the IEA, in
particular Keisuke Sadamori, Laura Cozzi, Alessandro Blasi, Paolo
Frankl, Peter Fraser, Rebecca Gaghen, Timur Gül, Tom Howes, Sara
Moarif, Cyril Cassisa, Xiushan Chen, Marine Gorner, Insa
Handschuch and Luca Lo Re.
Thanks also to Jad Mouawad, Head of the Communications andDigital Office (CDO), and to CDO colleagues Tanya Dyhin, Merve
Erdil, Grace Gordon, Jethro Mullen, Rob Stone, Jon Custer,
Christopher Gully, Julie Puech, Mariam Aliabadi, Astrid Dumond,Isabelle Nonain-Semelin, Clara Vallois, Gregory Viscusi and
Therese Walsh.
Emissions data for different nickel production pathways was provided
by courtesy of Natural Resources Canada (NRCan). Emissions datafor copper and nickel was provided by courtesy of Skarn Associates.
Mining waste data was provided by courtesy of Professor Gavin M.

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Mudd at the Royal Melbourne Institute of Technology University.
Professor Raphael J. Heffron at the University of Dundee provided
valuable assistance on the economic benefits of mining. Louis
Maréchal and Benjamin Katz of the Organisation for Economic Cooperation and Development (OECD) provided helpful input andsuggestions on responsible sourcing and supply chains. Antonio
Vaya Soler and Luminita Grancea of the Nuclear Energy Agency(NEA) provided helpful input on mineral intensities for nuclear.
The work could not have been achieved without the support and cooperation provided by many government bodies, organisations andcompanies worldwide, notably: Department of Industry, Science,
Energy and Resources, Australia; Ministry of Economy, Trade andIndustry, Japan; and Ministry of Economic Affairs and Climate Policy,
Netherlands. Activities within the IEA Clean Energy Technologies
Programme provided valuable support to this report. Thanks go to theexperts from the IEA Technology Collaboration Programmes (TCPs)
for their support to review material intensity assumptions, particularly
to Marina Holgado, Darina Blagoeva, Franz Lehner and Xin Pangfrom the Hydrogen TCP, Stefan Nowak and Garvin Heath from the
PVPS TCP and Ignacio Marti and John McCann from the Wind TCP.
Many experts from outside of the IEA provided input and reviewed
preliminary drafts of the report. Their comments and suggestions
were of great value. They include:

Shabbir Ahmed

Argonne National Laboratory

Patricia Alves-Dias

European Commission Joint ResearchCentre (EC JRC)

Harmeet Bawa

Hitachi ABB Power Grids

Morgan Bazilian

Payne Institute for Public Policy, Colorado
School of Mines

Carlos Felipe Blanco

University of Leiden

Antoine Boubault

Bureau de Recherches Géologiques etMinières (BRGM)

Camille Boulianne

Natural Resources Canada

Jorge Cantallopts Araya

The Chilean Copper Commission(COCHILCO)

Samuel Carrara

European Commission Joint ResearchCentre (EC JRC)

Ryan Castilloux

Adamas Intelligence

Alec Crawford

Intergovernmental Forum on Mining,
Minerals, Metals and Sustainable
Development (IGF)

Aidan Cronin

Siemens-Gamesa

Shobhan Dhir

University of Oxford

Alison Fleming

Department of Industry, Science, Energy
and Resources, Australia

Michelle M. Foss

Baker Institute, Rice University

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The Role of Critical Minerals in Clean Energy Transitions

Mitsunori Fukuda

Japan Oil, Gas and Metals National
Corporation (JOGMEC)

Kazuaki Kobayashi

Ministry of Economy, Trade and Industry,Japan

Hiroyuki Fukui

ToyotaAnna Krutikov

Glencore

Francesca Gostinelli

EnelFrancisco Laveron

Iberdrola

Luminita Grancea

NEA

Yolanda Lechón

CiematEmmanuel Hache

IFP Energies Nouvelles

Dan M. Levy

Credit Suisse

Georgina Hallett

London Metal Exchange

Johannes Lohmeyer

Mark D. Hansen

Siemens-Gamesa

Deutsche Gesellschaft für Internationale
Zusammenarbeit (GIZ)

Sara Hastings-Simon

Payne Institute for Public Policy, Colorado
School of Mines

Luca Maiotti

OECD

Louis Maréchal

OECD

Raphael Heffron

Dundee University

Rémi Mayet

European Commission

Chris Heron

Eurometaux

Adam McCarthy

Cobalt InstituteDaniel Hill

Natural Resources Canada

Luca Meini

Enel

Noé van Hulst

Special Advisor Hydrogen

Dennis O. Mesina

Department of Energy, United States

Hiroyuki Kaneko

NissanMatteo Minervini

Eni

Benjamin Katz

OECD

Mark Mistry

Nickel InstituteNobuyuki Kikuchi

Ministry of Foreign Affairs, Japan

Susana MoreiraWorld Bank

Jihyun Kim

Samsung SDIAnders Nordelöf

Chalmers

Tae Heon Kim

Korea Energy Economics Institute (KEEI)Louise Pearce

Yu-Tack Kim

Korea Battery Industry Association

Environmental Resources Management(ERM)

Mark Pituch

Department of State, United States

PAGE | 282

Annexes

The Role of Critical Minerals in Clean Energy Transitions

Greg Radford

Intergovernmental Forum on Mining,
Minerals, Metals and Sustainable
Development (IGF)

Marco Raugei

Oxford Brookes University

Carolina Salvaterra

Department for Business, Energy andIndustrial Strategy, United Kingdom

Gondia Sokhna SeckIFP Energies Nouvelles

Tristan Stanley

BHP

Nikos Tsafos

Center for Strategic and International
Studies (CSIS), United States

Antonio Vaya Soler

NEA

Antonin Vergez

Ministry for an Ecological Transition,
FranceTakuma Watari

National Institute of Environmental
Studies, Japan

Peter Wood

Shell

PAGE | 283

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