The growth of power generation capacity from low-emissions sources accelerates in all three IEA scenarios. Renewables account for the majority of capacity additions in every region over the outlook period. The acceleration of renewable energy deployment calls for modernising distribution grids and establishing new transmission corridors to connect renewable resources that are far from demand centres such as cities and industrial areas. Global EV sales are set to grow strongly, more than tripling by 2030 in the STEPS and APS to almost 45 million and 50 million vehicles, respectively, and increasing more than fivefold to 70 million in the NZE Scenario.

The accelerating pace of energy transitions is set to significantly boost mineral demand across all the three scenarios. In the STEPS, demand doubles to 2030 with continued growth thereafter. In the APS, demand more than doubles by 2030 and triples by 2050. In the NZE Scenario, the swifter adoption of clean energy technologies implies an even more pronounced surge in demand for critical minerals, nearly tripling by 2030 and growing to over 3.5 times the current levels by 2050, reaching nearly 40 Mt.

It is important to note that demand projections are subject to large variations, influenced not only by broader policy considerations (reflected in our energy scenarios) but also by technology costs and innovations, as well as behavioural factors. To address this complexity, the IEA has developed more than ten alternative cases to assess the impacts of different consumer preferences and technology advancements on future mineral requirements. The findings of these cases are available through the updated IEA Critical Minerals Data Explorer, an accompanying online data tool designed to allows users to easily access and navigate the projection results.

In the NZE Scenario, demand for copper rises by 50% by 2040, while demand for nickel, cobalt and rare earth elements doubles, and graphite demand increases by four times over the same period, propelled by the substantial increase in battery deployment for EVs and grid storage. Of all the minerals, lithium stands out in this scenario with eightfold growth by 2040, highlighting its crucial role in batteries. Across all materials, the share of clean energy technologies in total demand rises significantly. In most cases, the clean energy sector emerges as the largest consumer of these minerals. In the NZE Scenario, EVs and battery storage are projected to account for over 90% of total lithium demand by 2030.

The combined market value of key energy transition minerals more than doubles by 2040 in climate-driven scenarios, reaching USD 770 billion in the NZE Scenario.

At around USD 325 billion, the combined market value of key energy transition minerals is set to increase by 55% in the APS by 2030 and by 80% in the NZE Scenario. By 2040, the market value more than doubles, reaching USD 770 billion in the NZE Scenario. copper maintains the largest market value at USD 330 billion, while the lithium market undergoes significant expansion to USD 230 billion by 2040, emerging as the second-largest market, followed by nickel. The graphite market also undergoes almost sixfold growth over the period to 2040.

In the base case supply scenario, this growth in market value is spread across key regions. For mining, Latin America captures the largest amount with around USD 120 billion by 2030, driven by substantial copper production in the area. Indonesia sees the fastest growth, doubling its market value by 2030 due to its burgeoning nickel mining activities. Africa also witnesses a 65% increase in market value, attributed to the rapid expansion of copper production in the region. However, the market value for refining is notably more concentrated, with China claiming nearly 50% of the market value in 2030. China also sees a rise in market value for mined materials as the country's production of copper, lithium, and rare earth elements undergoes rapid expansion.  

In recent years, substantial investments have been made in mineral supply, and an increasing number of projects have been announced, indicating an expansion in expected supply volumes in the coming years. In some cases, such as cobalt, nickel and rare earth elements, the expected supply by 2035 from both existing and announced projects aligns more closely with the projected demand in the APS, particularly in cases where projects assumed in the high production case come to fruition. However, the timely delivery of planned projects is far from guaranteed and meeting the requirements in the NZE Scenario necessitates further project developments.

The situation differs for copper and lithium. Announced projects indicate that mined copper supply may peak a mined copper supply gap develops in the current decade in the base case. Even under the high production scenario, the anticipated supply by 2035 falls well short of meeting the APS requirements, indicating a potential necessity for a further increase in scrap utilisation, demand reduction through material substitution or technological innovation, alongside efforts to foster additional project developments. Lithium presents another significant challenge, exhibiting a substantial anticipated gap with climate-driven needs, owing to the strong position of lithium-ion batteries in EVs and storage applications. The current downturn in prices may dampen investment appetite for new greenfield projects, which could have profound longer-term implications.

Global mineral supply chains are not well diversified, and recent progress on diversifying supply sources has been limited. Our analysis of project pipelines suggests that the geographical concentration of mining operations is set to remain high in most cases. The situation improves somewhat in the high production case, indicating that many projects being developed in geographically diverse regions are not among the front-runners for development. This pattern mirrors the situation in refining operations, as most refining projects are located in today's dominant producers, thus prolonging high concentration levels in refined material production. These high levels of supply concentration raise risks of potential supply disruptions due to physical accidents, geopolitical events or other developments in a key producing country, with major potential implications for the speed of energy transitions.

Given that the top producing nation is responsible for a large portion of global supply for most minerals, available supply outside the largest producing country may be significantly constrained to achieve these ambitions. We conducted the “N-1 test” to assess how the supply and demand landscape might appear if the largest global supplier were removed from the market. Specifically, we assessed N-1 supply and N-1 material requirements in 2030 in the APS, excluding both anticipated supply from the largest supplier and projected demand from that country. In most cases, the N-1 supply falls significantly below the N-1 material requirements (even for minerals where the overall global balance is reasonably well supplied). If the CRMA’s non-single-origin minimum threshold (35%) is applied in a global context, the N-1 nickel and cobalt supply is barely able to meet this minimum threshold. The situation is even more pronounced for graphite. Although there is abundant supply of graphite globally, the expected N-1 supply is entirely insufficient to meet the minimum threshold. This indicates that without urgent efforts to develop additional projects in geographically diverse regions, achieving the goals set by policy legislation would be highly challenging.      

This analysis underscores the need for concerted efforts to expedite the development of promising projects located in geographically diverse regions. Additionally, it highlights the importance of harnessing the potential for value chain expansion in major resource holders in emerging and developing economies, provided such expansion is economically viable and can yield significant economic and social advantages. Investment across the supply chain is crucial, yet equally vital is unlocking the potential of recycling, innovation, and behavioural change.

Lithium and copper are more exposed to supply and volume risks whereas graphite, cobalt, rare earths and nickel face more substantial geopolitical risks. On the other hand, graphite, rare earth elements and lithium have relatively little ability to respond to potential supply disruptions.

Most minerals are exposed to high environmental risks and have particularly high ratings for environmental performance for the refining segment in large part because today’s refining operations occur in places with higher carbon intensity of the grid, mostly in regions relying on coal-based electricity. Mining assets are also exposed to growing water stress and earthquake risks, with around 10% of global copper production facing supply risks related to droughts.

Large amounts of investment will be required to develop new supply sources to meet the required demand for critical minerals in climate-driven scenarios. For mining, we estimate that approximately USD 590 billion is required in new capital investments between now and 2040 in the APS. As the NZE Scenario sees faster deployment of clean energy technologies, total capital requirements are about 30% higher at nearly USD 800 billion over the same period. The largest investment among the critical minerals is in copper. Capital requirements to 2040 for copper mining are USD 330 billion in the APS and USD 490 billion in the NZE Scenario. These amounts reflect not only the significant levels of demand, but also escalating capital requirements per tonne of ore caused by declining ore quality. 

Financing diversified critical mineral supply chains faces numerous challenges, primarily stemming from two underlying factors: high input costs and long-term price uncertainty. Governments can intervene in various ways to help finance more diversified value chains. These interventions can come from four main sources: government departments and policy banks, sovereign wealth funds (SWF), development finance institutions (DFI), and export credit/insurance agencies (ECA). These agencies may engage directly with private sector firms, through state-owned or backed enterprises, in a hybrid fashion, or in partnership with foreign counterparts. They have a number of policy options available to them that range from direct debt or equity investments to indirect financial support and de risking measures that boost competitiveness.

A comprehensive approach to security and sustainability of supply needs to also address the demand side of the equation, which plays a crucial role in narrowing supply-demand gaps while simultaneously mitigating the potential environmental and social harms associated with resource extraction and use. Recycling creates a secondary supply of minerals that relieves the pressure on primary supply from mining and refining. A strong focus on recycling can deliver triple benefits: complementing primary mineral supplies, improving security of supply for regions with limited resource endowments and enhancing environmental performance and waste management. While recycling would not eliminate the need for continued investment in new supplies, we estimate that by 2040, recycled quantities of copper, lithium, nickel and cobalt from clean energy applications could reduce primary supply requirements for key minerals by 10-30%.

Technology advances also have a major role in alleviating potential supply strains. For example, significant reductions in the use of silver and silicon in solar cells over the past decade have contributed to a spectacular rise in deployment of solar PV. A sensitivity case covering an accelerated global adoption of lithium-iron phosphate chemistries and sodium-ion batteries could reduce mineral demand for EV batteries by around 13% in 2030 and 18% in 2050 compared to the NZE Scenario’s base case.

Behavioural changes in the NZE Scenario help to bring about a more equitable and just energy transition. But in terms of critical minerals, behavioural changes can also imply a more tempered demand that can help narrow the demand-supply gap, especially changes in behaviour related to transport needs. In the case of lithium, the combination of smaller EV battery sizes (behavioural change), alternative chemistries and recycling could reduce demand for lithium by 25% in 2030 in the NZE Scenario, saving an amount similar to today’s production volumes. With these reductions, new supplies would need to grow by 20% per year between today and 2030. The lithium industry managed to deliver this scale of growth in recent years. For example, lithium raw material supply grew by roughly 20% per year over the past five years.

Despite strong expected increases in demand, market transparency of commodities such as cobalt, lithium, and rare earth elements remains limited, challenging price-hedging and discouraging investment and risk assessments. Market transparency covers both the question of pricing – including efficient market price discovery mechanisms and financial tools to hedge price risks – and information – the importance of publicly available data on consumption, supply, inventories, trade and ESG performance.

With greater transparency, producers and consumers are able to hedge their price risk, plan their stocks and production, and negotiate fair contracts. Merchants and intermediaries are able to correct global supply and demand imbalances as efficiently as possible. Governments benefit by being able to plan ahead and ensure supply continuity. Information transparency enables the anticipation of potential risk areas, allowing policymakers to target support where it is most needed.

Some nations already disclose significant data on mining volumes, given the economic and social importance of this activity in their jurisdictions. Stock exchanges and their regulators, particularly in Canada (NI National Instrument 43-101 Standards of Disclosure for Mineral Projects) and Australia (Joint Ore Reserves Committee [JORC] reporting code), have also played a crucial role in making more data on production and reserves of publicly traded mining companies accessible. Public data initiatives have the potential to offer valuable insights to stakeholders in the market. While some disclosures have been made under the Extractive Industries Transparency Initiative (EITI), countries do not necessarily systematically disclose the information even if it is required under EITI. In addition to private disclosures from publicly traded companies, efforts are underway to classify and make data on resources more readily available, often held by geological surveys, with the United Nations Framework Classification for Resources. There is also scope to improve codes for trade reporting to better track trade flows of raw and refined materials.