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Demand for critical energy transition minerals is set to triple by 2030 and quadruple by 2040 to support the global energy transition, according to a new UN report (pdf). Countries agreed to triple renewables capacity and double energy efficiency by 2030 at COP28, but this cannot be achieved without fair and equitable access to critical minerals including copper, cobalt, nickel, and lithium used in EVs, wind turbines, and solar panels. The report presents recommendations on how to develop the mining supply chain fairly and sustainably.
More clean energy, more minerals: Last year saw record deployment of clean energy and electric vehicles with solar power increasing by 85%, wind power increasing by 60%, and EV sales growing by 35%. according to the International Energy Association’s (IEA) 2024 Critical Minerals Outlook (pdf). Production of the minerals has also risen due to demand for renewable energy and the geographical concentration of the mineral deposits, particularly nickel and cobalt. Investment in critical mineral mining grew 10% in 2023, the report states.
The road to increased mining activities is rocky: Minerals mining is often tied to environmental distress, emissions, and destabilizing geopolitical tension, the UN report states. The benefits of minerals distribution are also often inequitable, particularly for women, children, youth, workers, small-scale miners, and indigenous peoples. Governments, businesses, and the UN need to effort to optimize the critical minerals supply chain and “properly manage mineral value chains, uphold the rule of law in a non-discriminatory way, respect national sovereignty, invest in true multilateralism and peacebuilding, and ensure universal human rights are protected,” the report states.
A supply shortage is looming: Prices have fallen to pre-pandemic levels as supply overtakes demand for the minerals, but demand is set to eventually surpass supply as more countries transition away from polluting cars and conventional energy sources, according to the IEA report. A steep drop in prices which is expected to deter necessary investment and lead to a shortage in supply. In a scenario in which countries worldwide meet their national climate goals, existing mining projects will only be able to meet 70% of the world’s copper needs and 50% of its lithium needs in 2035.
Political tension has plagued the minerals supply chain: Some companies have turned to Africa for critical minerals, but the tussle over the minerals is causing increased regional instability and factional warring, especially Democratic Republic of Congo — which holds two-thirds of the world’s cobalt. Tanzania is also digging up manganese and graphite, but isn’t reaping as much economic benefit as it does not produce any of the green tech the minerals would be needed for.
There’s a mismatch between production and ownership: The US and Europe own far more supply sources of minerals than countries where mining activities are located, with Glencore and Rio Tinto leading the charge, the IEA report states. Similarly, China is a leader of nickel production with 40% while the EU holds 20%, while Indonesian companies own less than 10% despite the country leading mining for the mineral.
What are the recommendations? The report suggests establishing an expert advisory group within the UN to monitor and advise on policy and global coordination for mineral value chains, while enforcing transparency and traceability. The panel also recommends developing a fund to handle ownership disputes for abandoned mines, supporting small-scale miners to join the energy transition efforts, and bolstering material supply efficiency and circularity.
All to maintain seven guiding principles: The report outlines seven guiding principles that spotlight human rights, integrity, biodiversity protection, justice, benefit sharing, economic diversification, responsible investment, transparency, anti-corruption, peace, security, and international cooperation.
The experts behind the report: The panel of experts behind the report was assembled by the UN Secretary General in April and met several times in the year-to-date in order to release the report. There are 39 panel members from around the world, including some from the MENA region – Egypt’s Assistant Foreign Minister for Legal Affairs Wael Abouelmagd and UAE’s Assistant Minister for Energy and Sustainability Affairs Abdulla Balala.
The next steps: The co-chairs and panel of the report will have to present its recommendations to member states and other stakeholders at COP29 in November.
