They are not ready to support accelerated energy transitions. Today’s supply and investment plans are geared to a world of more gradual, insufficient action on climate change (the STEPS trajectory). However, looking further ahead in a scenario consistent with climate goals, expected supply from existing mines and projects under construction is estimated to meet only half of projected lithium and cobalt requirements and 80% of copper needs by 2030. neodymium, dysprosium) might face tight supply in the years ahead. Some minerals such as lithium raw material and cobalt are expected to be in surplus in the near term, while lithium chemical, battery-grade nickel and key rare earth elements (e.g. Our analysis of the near-term outlook for supply presents a mixed picture. In the case of electricity networks, copper and aluminium currently represent around 20% of total grid investment costs higher prices as a result of tight supply could have a major impact on the level of grid investment. If both lithium and nickel prices were to double at the same time, this would offset all the anticipated unit cost reductions associated with a doubling of battery production capacity. Higher mineral prices could therefore have a significant effect: a doubling of lithium or nickel prices would induce a 6% increase in battery costs. However, this also means that raw material costs now loom larger, accounting for some 50-70% of total battery costs, up from 40-50% five years ago. In the case of lithium-ion batteries, technology learning and economies of scale have pushed down overall costs by 90% over the past decade. Raw materials are a significant element in the cost structure of many technologies required in energy transitions. Given the urgency of reducing emissions, this is a possibility that the world can ill afford. Similar episodes in the future could delay clean energy transitions and push up their cost. In the past, strains on the supply-demand balance for different minerals have prompted additional investment as well as measures to moderate or substitute demand, but these responses have come with time lags and have been accompanied by considerable price volatility. The prospect of a rapid rise in demand for critical minerals – in most cases well above anything seen previously – poses huge questions about the availability and reliability of supply. In other sectors, the rapid growth of hydrogen as an energy carrier underpins major growth in demand for nickel and zirconium for electrolysers, and for platinum-group metals for fuel cells. Hydropower, biomass and nuclear make only minor contributions given their comparatively low mineral requirements. Solar PV follows closely, due to the sheer volume of capacity that is added. Wind takes the lead, bolstered by material-intensive offshore wind. The rise of low-carbon power generation to meet climate goals also means a tripling of mineral demand from this sector by 2040. The expansion of electricity networks means that copper demand for grid lines more than doubles over the same period. Lithium sees the fastest growth, with demand growing by over 40 times in the SDS by 2040, followed by graphite, cobalt and nickel (around 20-25 times). Which sectors do these increases come from? In climate-driven scenarios, mineral demand for use in EVs and battery storage is a major force, growing at least thirty times to 2040. EVs and battery storage have already displaced consumer electronics to become the largest consumer of lithium and are set to take over from stainless steel as the largest end user of nickel by 2040. In a scenario that meets the Paris Agreement goals (as in the IEA Sustainable Development Scenario ), their share of total demand rises significantly over the next two decades to over 40% for copper and rare earth elements, 60-70% for nickel and cobalt, and almost 90% for lithium. However, as energy transitions gather pace, clean energy technologies are becoming the fastest-growing segment of demand. Until the mid-2010s, for most minerals, the energy sector represented a small part of total demand. 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. Electricity networks need a huge amount of copper and aluminium, with copper being a cornerstone for all electricity-related technologies. Rare earth elements are essential for permanent magnets that are vital for wind turbines and EV motors. Lithium, nickel, cobalt, manganese and graphite are crucial to battery performance, longevity and energy density. The types of mineral resources used vary by technology.
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