Key Points
- Critical minerals are vital for clean energy technologies like solar and wind.
- Recycling is key to easing mineral shortages and diversifying supply.
- Geopolitical tensions and monopolies disrupt global mineral supply chains.
According to data and analytics company GlobalData, the world’s transformation to clean energy is causing an unparalleled increase in demand for vital minerals, which is seriously impeding the goals of the energy transition.
Critical minerals shortages threaten clean energy goals
“Renewable technologies like solar panels and wind turbines, as well as hydrogen, energy storage, and carbon capture, are key components of the rapidly accelerating global energy transition,” said GlobalData.
Mineral supplies are being strained, though, by the rising demand for these technologies.
Mineral depletion, resource monopolization, geopolitical tensions, and water shortages are some of the major obstacles to expanding renewable energy technology, according to GlobalData’s most recent Strategic Intelligence study.
The near-term depletion of essential minerals is a serious issue, according to Strategic Intelligence expert Martina Raveni. She draws attention to how low-grade ores contribute to mining complexity and inefficiencies, particularly in the extraction of copper.
Additional risks are added by price volatility brought on by market instability.
One important tactic to reduce supply shortages and diversify supply networks is recycling.
Uneven resource distribution disrupts energy transition progress
Globally, critical minerals are not evenly distributed; for example, lithium reserves are dominated by South America and Australia, cobalt production is dominated by the Democratic Republic of the Congo, and nickel supplies are dominated by Indonesia.
“Geographic monopolies increase supply risks, which are made worse by environmental issues like water scarcity and geopolitical tensions,” Raveni stated.
According to mining weekly, global rivalry between the US and the EU have intensified as a result of China’s hegemony in the renewable energy and mineral supply chains. Western countries have responded by imposing sanctions, which have upset international supply networks and created market volatility.
By prohibiting the export of rare earth elements in 2023, China heightened tensions and heightened worries about mineral shortages.
The rivalry for vital minerals is casting doubt on countries’ capacity to fulfil their energy transition goals.
Raveni underlined that in order to overcome these obstacles, creative solutions, more robust recycling programs, and cooperative global policies to stabilise supply chains and control resource distribution will be needed.
