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Demand for critical minerals to power the global energy transition is forecast to skyrocket in the years ahead, while supply is expected to fail meeting the world’s needs unless alternative ways of securing critical metals are applied, experts warn.
It is a bumpy road ahead from a credit risk perspective due to moving parts, analysts at DBRS Morningstar said in a note on Tuesday. These include the role of governments to de-risk investments in exploration and mining innovation and how high critical metals prices remain.
They also note that the energy transition trend may lead to rapid depletion of reserves and even shorten mine lives, which will put pressure on cost structures, affecting the overall business risk profiles of miners.
One way to mitigate these effects, experts agree, is by creating innovations and alliances that will reshape mining operations to meet the surging demand.
One of the alternatives currently available is the extraction of critical metals from used products, such as electronics or e-waste, as well as from mine tailings.
Ahmad Ghahreman is a materials engineering expert and the CEO of Cyclic Materials, a company that offers a sustainable solution to the demand for critical minerals for electric vehicles and batteries. He believes the world needs to embrace both the benefits of reducing greenhouse gas emissions from fossil fuels and the challenges of extracting and processing minerals such as lithium, cobalt, nickel, and copper.
Recycling, he said, can offer a sustainable pathway to meet rising demand for these minerals, reducing society’s reliance on mining.
“Over the past 20 years, we have witnessed the remarkable success of advanced battery technologies, which have improved their performance and enabled the transition to sustainable energy sources. This is a great achievement, but we also need to be aware of the environmental impacts of mining the materials that make these technologies possible,” Ghahreman said.
According to Ghahreman, there is no trade-off or choice between lowering emissions and mining more minerals. Instead, he argues the need to find environmentally-friendly alternatives to conventional mining methods, which can cause pollution, land degradation, and social conflicts.
The International Energy Agency (IEA) has forecasted that demand for most minerals essential to the clean-energy transition will increase four to six times over the next decade and a half. For some minerals, the jump will be exponential. “By 2040, graphite demand, for example, will increase by 25 times, and the demand for lithium by 42 times,” it noted.
Ghahreman’s company has developed a circular approach that recovers and recycles critical minerals from end-of-life batteries and other waste streams. This way, he said, the world could reduce the need for new mineral extraction, save energy and water, and prevent hazardous waste disposal.
“We can use electric vehicles and sustainable technologies to reduce our carbon footprint without compromising product quality. But we also need to make sure that we are not creating new problems by mining more minerals. We need to close the loop and make our materials cycle more efficient and responsible,” he noted.
One of the main challenges for recycling end-of-life magnets and other e-waste is identifying and securing feedstock. Ghahreman expects this problem to ease once EVs sales take off and as regulation such as the US Inflation Reduction Act and similar opportunities in Canada and other countries expand.
The IEA estimates that by 2040, recycled copper, lithium, nickel, and cobalt from spent batteries alone could provide 10% these minerals. The Worldwide Wildlife Fund says recycling could potentially supply 20% of total mineral demand between from now until 2050.
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Christina Dian Parmionova
Rare-earth element (REE) demand is expected to increase by a factor of up to 7 by 2040.