Why the world is racing to mine critical minerals 

What you need to know about critical minerals

Critical minerals – among them lithium, cobalt and nickel – can be found in everyday technologies, like mobile phones and laptops. But they are also indispensable for manufacturing the clean energy technologies the world needs to decarbonise energy systems. From solar panels and wind turbines to batteries for electric vehicles and transmission lines, all need vast volumes of these minerals, causing demand to skyrocket.

Building an electric car, for example, uses around six times the mineral inputs of a conventional car, while an onshore wind plant requires nine times more mineral resources than a gas-fired one. Decarbonising the global economy will involve increasing mineral extraction and ensuring more sustainable mining practices.

What are critical minerals?

Critical minerals are minerals that are deemed essential for a country’s economy but whose supply is subject to major risks because of factors ranging from geopolitical tensions to basic availability. These factors differ from country to country, reflecting national priorities and changing global supplies. As such, there is no universal list of critical minerals.

The US has identified 18 materials as “critical” for clean energy because of the risk of disruptions to their supply chains. The UK’s own list of 18 critical minerals differs from that of the US while the European Union’s list runs to 34. However, there are notable overlaps when it comes to the materials the world needs for the energy transition.

What critical minerals does the world need to manufacture clean energy technologies?

Manufacturing clean energy technologies requires dozens of critical minerals. Several of them are needed across multiple technologies and are in particular high demand. These include:

• Lithium, a lightweight silvery metal, which is used in batteries for electric vehicles and energy storage.
• Cobalt, which is essential to power modern technologies. It has magnetic properties, is wear-resistant, and is used in lithium-ion batteries.
• Copper, a highly conductive metal, which is essential to electrical systems and is used in most clean energy technologies.
• Nickel, a hard metal that can also be bent or stretched easily. It is highly corrosion-resistant and is used to make stainless steel, which is used in wind turbines. It is also used in lithium-ion batteries.
• Rare earth elements, a subset of 17 critical minerals, which are essential to hundreds of modern digital technologies. They are used to make magnets for electric vehicles and wind turbines. Despite the name, rare earth elements are not geographically rare but they are difficult to extract and process.

Is the world running out of critical minerals?

While critical minerals are finite resources, there is no shortage of reserves. However, countries’ capabilities for mining and processing them are limited, and a supply crunch is looming. Global demand for critical minerals is exploding. The International Energy Agency (IEA) forecasts that reaching net-zero emissions globally by 2050 will require at least six times more critical mineral supplies by 2040 than today.

Yet, the pipeline of existing and planned mining projects isn’t enough to meet expected demand. At the start of 2023, the IEA foresaw a shortfall of 60% of the nickel and 35% of the lithium the world needs by 2030 to get on track to meet climate goals.

Timing and investment are key hurdles. New mines are not being built fast enough and the lead time from exploration to production can take more than a decade. A lack of proper consultation and poor practices can lead to opposition from local communities, causing delays.

Price volatility is another problem. After a rise in prices, the cost of battery minerals plummeted in 2023 amid a supply glut and a slowdown in EV demand, particularly in China. While this is pushing down the costs of making batteries, the price slump is leading to operations being reduced and projects being shelved.

Where are emerging frontiers for mining critical minerals?

Critical mineral production is concentrated in a handful of countries. But some nations hold vast untapped reserves. In South America, an area between Bolivia, Argentina and Chile, known as the “lithium triangle”, has nearly 60% of the world’s identified lithium reserves. Bolivia is home to the world’s largest known reserves, which until now have remained untapped.

Meanwhile, Africa holds 30% of the world’s critical mineral reserves, including rich deposits of cobalt, copper, manganese, lithium and platinum. But overall, the continent has received low investment in mining exploration. Several African countries are seeking to develop domestic production and processing of those resources, such as Zimbabwe.

Elsewhere, the race to secure minerals has fuelled interest in exploiting resources in the deep seas, on the moon and on asteroids in space. Deep sea mining proposals include vacuuming up mineral concretions on the sea bottom, which are rich in manganese, nickel, cobalt and rare earth metals – key components of batteries for electric vehicles. However, the idea is highly controversial because of the potential long-term harm to a largely unknown environment.

Can the world mine and process more critical minerals without exacerbating social and environmental harms?

The mining and processing of critical minerals pose both environmental and social risks. Conventional mining practices have caused pollution, deforestation and social conflict. Mining operations have infringed on the rights of Indigenous peoples, despite international protections. And scaling-up mining for the energy transition continues to pose such risks. A 2022 study, which reviewed more than 5,000 critical mineral mining projects, found more than half were located on or near Indigenous lands.

Calls for miners to adopt sustainable practices and not perpetuate the harms of past extractive industries are intensifying. Supply chains are facing increasing scrutiny from investors and consumers. This has led to industry-wide initiatives to address social and environmental abuses, such as the Solar Stewardship Initiative and the Global Battery Alliance. Transparency initiatives and due diligence frameworks have helped set standards. Meanwhile, the UN is analysing what responsible mineral development looks like and the justice and sustainability principles that should guide the industry.

In addition, technological developments can help reduce mining impacts. Lithium miners are working to reduce their water footprint while new extraction techniques touted as more environmentally friendly are being tested. Technological advances could help develop less mineral-intensive options to make batteries. Emerging sodium-ion battery technology could replace the need for lithium with more widely available sodium, for example.

Reducing energy demand, recycling and circular economy strategies could also help reduce the use of materials in the medium to long-term.