How Low Prices Today Threaten Tomorrow’s Investments in Critical Minerals
Volatile mineral prices cast uncertainty over the green energy transition. Today’s low prices may ease costs temporarily but threaten the long-term investments needed to secure future supply.
Minerals as the new bedrock of progress in the 21st century
If the 20th century was built on oil, the 21st—especially in its later decades—will be built on minerals. Demand for these resources will be immense, and the world is only beginning to explore where they lie and how best to extract them. Breakthroughs will be essential—advances that make extraction more efficient, sustainable, and recycling more affordable.
Demand for these minerals is projected to surge over the next three decades, driven primarily by the rising need for batteries, electric motors, solar panels, wind turbines, and electrolyzers.
In the IEA's Sustainable Development Scenario (SDS), which envisions advanced economies reaching net-zero emissions by 2050, annual solar PV capacity additions are expected to climb from around 100 GW in 2020 to over 300 GW by 2040. Annual wind deployments are set to grow from about 60 GW in 2019 to 160 GW by 2040. Annual EV sales are forecast to soar from 14 million in 2023 to over 70 million by 2040.
A transformative shift is anticipated—if indeed it comes to pass—in how we use energy. Most of our end-use energy will likely derive from electricity, driving a surge in demand for the technologies that deliver and store it. This growth, however, hinges on the availability of critical minerals in sufficient quantities. Annual demand for minerals like lithium, nickel, and cobalt is projected to grow to two to five times higher than the average seen from 2010 to 2020.
Long lead times demand early investment
The primary challenge in mining critical minerals such as lithium, nickel, cobalt, copper, rare earth elements, and graphite—among roughly 30 others—is the lengthy and complex development process. On average, it takes about 16 years from discovery to the first production of these minerals for end use. Just the exploration and feasibility stages, identifying the optimal project sites, can take up to 12 years (source).