Mine the gap – mineral requirements for the energy transition

The world is going to need to dig up a lot more of 16 key minerals as it goes through the energy transition, according to a new report from the World Bank. The minerals, which range from aluminium to graphite to neodymium are all key components of one or more energy technologies. Some, like copper, are used in all ten of the technologies surveyed, as shown below:

Source: Minerals for Climate Action, World Bank, 2020

Demand projections are based on six scenarios for meeting global energy needs to 2050: four from the IEA and two from the international renewable energy agency (IRENA). The report notes that it doesn’t cover all key material inputs: for example, steel, which is a major input to most of these technologies is not included in much of the analysis. Depending on the type and end use of steel, it can contain some of the other key minerals, such as chromium in steel for wind turbines. It also excludes a range of other minerals for which data was not available but could be critical. For example, one of the types of solar cell assumed to be deployed is cadmium-telluride, requiring both these rare minerals.

Another limitation of the analysis is that it doesn’t consider the materials requirements of new transmission infrastructure to connect up these new technologies to the grid. Even though it considers demand for batteries from the transport sector, it doesn’t include the materials needed to make the rest of the vehicle. A Tesla model S includes 190kg of aluminium and 45kg of copper as well as small amounts of rarer materials. The potential for the use of hydrogen as an energy vector to be scaled up is also not included. Fuel cells and electrolysers need a catalyst to split out hydrogen and oxygen molecules, and the most effective catalysts are precious metals, especially platinum.

Even with this limited look at mineral requirements going forward, the report projects annual demand for the 16 key minerals plus steel as inputs to energy technologies will rise from c. 40m tonnes pa to 160-180m tonnes pa in 2050. In other words, a four-fold increase. In the case of five minerals: graphite, lithium, cobalt indium and vanadium, the estimated demand in 2050 just for energy technology exceeds today’s global production to meet all uses.

Aluminium is the biggest of the 16 by weight. This is driven mostly by its use in deploying solar PV. But other minerals may have the overall demand impacted more by the energy transition. The quantities of silver required are small in comparison, but PV production already uses 7 per cent of the world’s annual silver production.

A key concern of the report is the potential environmental impact of obtaining and processing these minerals. Based on certain assumptions, aluminium – unsurprisingly, given it is dubbed “solid electricity” has the biggest greenhouse impact. Of course, the actual impact will depend on how the power needed for mining and processing is generated, how much is required, and whether there are other elements of the processing that generate emissions. If some of the renewable or nuclear energy that results from deployment is used to power mines and processing plants, then that can create a positive feedback loop of lower emissions. Water is also an issue – the report notes that many mines and promising deposits are in water-stressed parts of the world

Emissions and the risk of supply shortages can be mitigated by recycling materials. Some of the key minerals such as aluminium and nickel are already substantially recycled. But even if recycling could be ratcheted up to 100 per cent, new supply would still be needed to keep up with demand growth. And in practice 100 per cent is not achievable. Lithium is less than 1 per cent recycled and battery design may make it hard to grow this figure.

For Australia, this picture is largely positive. We are blessed with deposits of many of these minerals and have a good deal of mining expertise to bring to bear in turning deposits into viable production.  The twin challenges of water scarcity and emissions will need careful consideration, however.