Demand for Lithium and Other Critical Minerals Is Skyrocketing

Demand for the essential minerals needed for a future based on clean and eco-friendly technologies is soaring, according to the International Energy Agency (IEA). The energy industry's growing needs are a major driving force.

In a report released on Tuesday, the organization revealed that between 2017 and 2022, the demand for lithium tripled, cobalt saw a 70% surge, and nickel experienced a 40% increase.

According to the Paris-based organization, the primary reason for this is the rise in clean energy projects. Investments in critical mineral development rose by 30% in 2022, building upon a 20% increase in 2021.

In December 2022, the IEA announced that renewable energy sources were on track to surpass coal and become the largest global electricity generation source by the middle of this decade.

Given the vital role critical minerals play in the functioning of technologies, like wind turbines and electric vehicles (EV), the stakes are high. If all planned projects in the critical minerals sector are successfully implemented, the IEA believes there may be sufficient supply to meet the climate commitments made by governments.

The IEA has stressed that in order to limit global warming to 1.5 degrees Celsius, a crucial target of the Paris Agreement, more projects will still be necessary by the end of this decade. 

The market size for minerals essential to the energy transition reached $320 billion in 2022, doubling over the past five years. Start-ups in the critical minerals sector secured a record-breaking $1.6 billion in funding last year.