Proactive Investors - It will likely take another seven years for the supply of critical minerals to catch up with demand, provided all projects go as planned, the International Energy Agency (IEA) wrote in a report released on Tuesday.
The Paris-based energy watchdog, though, remains optimistic after revealing that investment in critical minerals production surged 30% last year to $41 billion, following a 20% gain in 2021, as reported by Reuters.
The IEA noted that critical mineral start-up companies raised a record $1.6 billion in 2022, up 160% from the previous year.
Demand for critical minerals such as lithium and cobalt has surged over the past five years due to their uses in electric vehicles, wind turbines and other clean energy technologies. This includes a tripling of lithium consumption and an increase of 70% for cobalt, with the total critical mineral market now worth $320 billion, the IEA added.
The IEA also stated that the supply of key battery mineral lithium, in particular, is expected to reach 420,000 metric tons by 2030, just shy of the estimated 443,000 needed to meet government pledges, though well less than the 702,000 required for net zero.
As well, the IEA wrote in its report that more work is also needed to diversify from key nations that have tight control on the output of many minerals, such as China, Indonesia and Congo.