Critical mineral prices drop in 2023, but supply risks remain - IEA

Prices of critical minerals used in clean energy technologies such as electric vehicles, wind turbines and solar panels, fell steeply in 2023 after two years of rises, as supply outpaced demand growth, the International Energy Agency (IEA) said on Friday.

However, the current well-supplied market may not be a good guide for the future, IEA warned as it released its Global Critical Minerals Outlook 2024 report, because the deployment of clean energy technologies drives strong demand for critical minerals.

Key energy transition minerals include lithium, copper, nickel, cobalt, graphite and rare earth elements.

In 2023, battery materials experienced particularly sharp declines with lithium spot prices plunging by 75% and cobalt, nickel and graphite prices decreasing between 30% and 45%. This contributed to a 14% decline in battery prices.

IEA noted that while lower prices benefit consumers, they slow new investments.

According to IEA’s analysis, announced projects can meet only 70% of copper and 50% of lithium needs in 2035 in a scenario where countries achieve their national climate goals. The market prospects for other minerals appear more balanced, but the high geographical concentration of supply continues, with China keeping a strong position in the refining and processing sector.

IEA estimates that the combined market worth of key energy transition minerals will more than double to USD 770 billion (EUR 709bn) by 2040 in a net zero scenario.

Between now and 2040, some USD 800 billion should be invested in mining to align with a 1.5 degrees C scenario. The sum will be larger if recycling and reuse are not stepped up.

“Secure and sustainable access to critical minerals is essential for smooth and affordable clean energy transitions,” said IEA executive director Fatih Birol. “The recent critical mineral investment boom has been encouraging, and the world is in a better position now than it was a few years ago, when we first flagged this issue in our landmark 2021 report on the subject. But this new IEA analysis highlights that there is still much to do to ensure resilient and diversified supply,” Birol added.

(USD 1 = EUR 0.920)

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