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The Role Of Critical Minerals In The Clean Energy Transition

November 10, 2021

By Paul Homewood


Back in May, the IEA published an analysis on the role of critical minerals on the clean energy transition:




Minerals are essential components in many of today’s rapidly growing clean energy technologies – from wind turbines and electricity networks to electric vehicles. Demand for these minerals will grow quickly as clean energy transitions gather pace. This new World Energy Outlook Special Report provides the most comprehensive analysis to date of the complex links between these minerals and the prospects for a secure, rapid transformation of the energy sector.
Alongside a wealth of detail on mineral demand prospects under different technology and policy assumptions, it examines whether today’s mineral investments can meet the needs of a swiftly changing energy sector. It considers the task ahead to promote responsible and sustainable development of mineral resources, and offers vital insights for policy makers, including six key IEA recommendations for a new, comprehensive approach to mineral security.


The salient points follow:










None of this new of course, but it is useful to have it all in one place, and from the horse’s mouth.

The raw material cost ratio for batteries is particularly useful to know, accounting for 50 to 70% of battery costs. Perfectly credible projections suggest lithium and cobalt prices could rise tenfold by 2030, which would mean the total battery cost could could rise by 500% or more. At this level, electric cars will simply be unaffordable for most drivers, even if economies of scale drive down manufacturing costs.

That is assuming enough EVs are even produced to meet demand. The IEA forecast that only half of demand for lithium and cobalt will be met by 2030. With long development lead times, this shortfall appears to be baked in.

Demand for critical minerals will carry on rising exponentially long after 2030, which after all only marks the beginning of this clean energy transition. It is hard to see the position not being much worse by 2040, by when the IEA expect demand for lithium and cobalt will be 42 and 21 times current levels respectively.

Yet western leaders are blindly ploughing on with their green agenda, seemingly oblivious to the cliff edge facing us.

  1. November 10, 2021 11:50 am

    “Yet western leaders are blindly ploughing on with their green agenda, seemingly oblivious to the cliff edge facing us.”
    Has the incompetence of our so-called political leadership ever been so clearly defined?

    • dave permalink
      November 10, 2021 12:14 pm

      The conclusion is that some ruler in the future will be FORCED by circumstances to ditch the whole renewables thing. My guess is that this will happen against a backdrop of naturally falling temperatures*, enabling that ruler to pretend ‘Job done!’ At which point Sod’s Law will make temperatures rise again.

      * With all the usual caveats about how nonsensical is the whole idea of ‘global
      average temperatures.’

      • Mack permalink
        November 10, 2021 12:27 pm

        ‘Circumstances’ might be arriving sooner than you think Dave. Long range forecast across the northern hemisphere is looking particularly chilly towards the end of this month when a few national grids might start to feel the pips squeak. Having just been hit by a national cold wave, and in expectation of a very frigid winter, Chinese daily coal production has been ramped up to record levels, hitting just under 12 million tons by the end of last week. I doubt President Xi will be claiming that the imminent big temperature drops will be a successful Chinese response to Cop26. Although I wouldn’t put such claims past Boris!

      • dave permalink
        November 10, 2021 12:54 pm

        Mack points out that the forecast for the first half of winter is ‘unusually cold.’
        However, I think we will squeak through this period without major disruption.
        It may be a different story in the middle of the decade!

        The forecast for the second half of the coming winter is ‘unusually mild.’

  2. Gamecock permalink
    November 10, 2021 12:01 pm

    ‘Demand for these minerals will grow quickly as clean energy transitions gather pace.’

    Petitio principii.

    • dave permalink
      November 10, 2021 1:28 pm

      IEA has the phrase, “rapid rise in demand…”

      Which meaning of “demand?” The desirability of something, as shown by the amount the buyers will bid at each price? Or the actual amount taken by them when presented with a definite supply and an equilibrium price?

      In other words we always have to distinguish between SHIFTS of demand and supply curves
      and movements ALONG these curves.

      Economics has separate theoretical structures of statics, comparative statics, and dynamics.

  3. Sobaken permalink
    November 10, 2021 1:05 pm

    Notice how the graph shows kg/MW of installed capacity, and not kg/MWh of energy produced.

    • Mikehig permalink
      November 10, 2021 2:34 pm

      That’s a very good point! Thank you.

      If that graph was recalibrated to incorporate capacity factors the disparity between renewables and conventional power stations would be many times greater.

      For example, PV solar in the UK has a capacity factor of about 10% (iirc) so the 7 MT per MW shown (approx) would become 70 MT!

    • It doesn't add up... permalink
      November 10, 2021 5:48 pm

      A very good point indeed. If we take nuclear as the benchmark at say 85% actual average capacity utilisation on a 50 year life, we can compare with offshore wind at 42.5% over 20 years (5 times worse than shown), onshore wind at 30% over 25 years (5.67 times worse than shown), solar 10% over 25 years (17 times worse than shown), coal at 70% over 40 years (about 1.5 times worse than shown) and gas at 60% over 40 years (about 1.77 times worse than shown) we get a very different picture. The utilisations partly reflect the different degree to which an asset type is typically used as flexible generation.

      You could indulge in a further round of corrections that give some recognition to asset inflexibility and intermittency which would improve the picture for gas but worsen it for all the others to reflect the need for gas flexibility to provide backup and peaking capacity.

  4. Wiggers permalink
    November 10, 2021 1:22 pm

    An expert on minerals says, “Usual nonsense in fact. Can’t recall any specifics tho’, seem to recall it was just a bland restatement of the usual pieties.”

    • Gamecock permalink
      November 10, 2021 2:55 pm

      Worstall is not “an expert on minerals.” His expertise – which is real – is in scandium.

  5. Dr Tim Ball - Historical Climatologist permalink
    November 10, 2021 1:49 pm

    Dr Tim Ball – Historical Climatologist
    Book: ‘The Deliberate Corruption of Climate Science’
    Book: ‘Human Caused Global Warming, the Biggest Deception in History’

    • T Walker permalink
      November 10, 2021 3:12 pm

      Welcome back Dr. Ball – thanks for the reminder.

      • Mack permalink
        November 10, 2021 10:18 pm

        Thanks for the ‘drive by’ Dr Ball. Your courage in standing up to the legion of compromised, forelock tugging corrupt amabassaders of ‘consensus’ climate science is a tribute to your complete integrity and honesty and an inspiration to anyone who believes in critical thinking, facts, data and the scientific method. I look forward to hearing the good news that a certain Mr Mann has finally settled his debt to you.

    • November 10, 2021 6:19 pm

      Thank you for your video, it is a presentational tour de force. Facts presented with verve. Given the date of the video why on earth has it not been circulated to all policy makers so they can be faced with the idiocy of their ‘climate crisis’ prognostications? Unless of course they know that they’re lying and don’t care that some people know they’re lying?
      It should also be sent to all schools in the UK to stop the brainwashing of our children.
      But that won’t happen either, too many corrupt intrerests driving the approved narrative. I despair for our children.

  6. T Walker permalink
    November 10, 2021 3:05 pm

    Yes – but I FEEL that it will be OK. We will keep finding more and more and prices will fall to zero – well near zero anyway.

    That is “my truth” and matron says I can have ice cream for tea.

  7. November 10, 2021 3:42 pm

    “Yet western leaders are blindly ploughing on with their green agenda, seemingly oblivious to the cliff edge facing us.”

    We have been trying to get the message across to our great leaders for years, but there is no way we can do it. Our great leaders are kept from the facts (even if they could take them all in and understand them) by several layers of protection, such as the civil service, the NGOs such as the CCC and the media.

  8. Peter MacFarlane permalink
    November 10, 2021 4:31 pm

    ” …electric cars will simply be unaffordable for most drivers..,”

    That’s the whole idea.

    • T Walker permalink
      November 10, 2021 6:21 pm

      If it turns out that way – how far do you think BoJo will have to travel to feel safe??

  9. Keith Harrison permalink
    November 10, 2021 5:16 pm

    Beyond the expected future price rise and costs of mining and extraction of battery components, Volvo announces that unless the electricity used in EVs is produced from non-fossil fuel the carbon emitted in the construction of the vehicle will effectively be greater than current ICE vehicles.

  10. November 10, 2021 10:41 pm

    “clean energy” is another of their dreadful PR words, we should not use

  11. Hugh Sharman permalink
    November 11, 2021 7:55 am

    Thank you Paul for this masterly posting!

    You do not mention the massive and permanent loss of biodiverse land nor the appalling environmental and social costs associated with the enormous mineral extraction and refining which the IEA states as necessary for “net zero”.

    In fact, although metal mining and metal refining and its consequences has been an intrinsic necessity for the development of our civilisation since the bronze age, mining on the scale quantified and described by the IEA in this Report is on a scale many times greater than during any previous time in human history.

    To be fair, the IEA’s writers are concerned too. The word “pollution” appears 29 times in its 287 pages. Piously, they wish for great care for the land destroyed but if this care is enforced in the mostly third World countries where the mining will happen, this will certainly boost the price of the refined metals resulting in greatly increased energy prices.

    “Net zero” as defined very simply, requires that the 80+% of the World’s primary energy, presently consisting of coal, gas and oil must be replaced entirely by “renewably generated electricity” in other words by wind and solar energy.

    I know that I am old, white and therefore wrong about almost everything. But even if all these minerals were to be extracted and refined cleanly and cheaply, I am convinced, based on the record of renewable electricity I have witnessed so far, that this “plan” so enthusiastically promoted at COP 26, can never be implemented in our World of 11 billion people in 2050.

  12. Dave Andrews permalink
    November 15, 2021 5:36 pm

    The IEA Update on EVs (AUG 23rd 2021) says that there were 10.2m EVs (BHEV and PHEV) in the world at the end of 2020.

    China 4.5m, Europe 3.2m, US 1.7m, Other 0.7m. In their best scenario in the Critical Minerals paper they expect there to be c.72m in the world by 2040.

    Compare that to the estimated 1.4 Billion ICEVs in the world today and it’s obvious that the idea the whole world is suddenly going to switch to EVs is a pipe dream.

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