The global shift towards clean energy is facing a significant hurdle as the demand for critical minerals surges, potentially jeopardising international energy transition goals, according to a new report by GlobalData.
The transition to renewable technologies such as solar PV cells, wind turbines, and energy storage solutions has triggered an unprecedented demand for critical minerals.
GlobalData’s latest Strategic Intelligence report, Critical Minerals (2024), identifies several key challenges to scaling clean energy technologies: mineral depletion, resource monopolisation, geopolitical tensions, and water scarcity.
Martina Raveni, Strategic Intelligence Analyst at GlobalData, explained: “The near-term depletion of critical minerals raises concerns, especially as instability in the green technologies market causes price volatility.
“Lower-grade ores complicate extraction, making it less efficient, particularly in the copper industry.”
The report highlights the uneven distribution of critical mineral resources globally. South America and Australia dominate lithium reserves, while the Democratic Republic of Congo leads in cobalt production, and Indonesia in nickel.
“Geographic monopolies worsen supply risks and are further exacerbated by geopolitical tensions, environmental, social, and governance disclosure rules, and environmental factors like water scarcity,” Raveni noted.
“The race to control these critical minerals has intensified rivalries between China, the US, and the EU, with China currently dominating the mineral supply chain and energy transition technologies.”
Recent geopolitical tensions have led to market disruptions.
Western nations have introduced sanctions to level the playing field, while China responded by banning rare earth elements exports in 2023, further escalating the situation.
Raveni concluded: “Given these issues, there are concerns that shortages of critical minerals may make it harder for nations to achieve energy transition goals.”
As the world races to meet clean energy targets, the critical minerals supply chain emerges as a crucial factor in determining the pace and success of the global energy transition.
