[Text/Observer Network Zhang Jingjuan] On May 21, the International Energy Agency (IEA) released the "2024 Global Critical Minerals Outlook" report.

The report shows that although the current critical minerals market appears to be well-supplied and prices have fallen significantly from their peaks in 2021 and 2022, the supply of critical minerals is concentrated in a few countries, and with more and more export restrictions, the risk of major supply disruptions in the future is increasing.

This report provides the latest data and analysis on critical minerals related to energy, including copper, lithium, nickel, cobalt, graphite, and rare earth elements in terms of supply, demand, investment, etc.

According to IEA, the market concentration of critical minerals is rising rather than declining, especially in the refining and processing stages. Data shows that for the above critical minerals, the average market share of the top three producers has increased from around 82% in 2020 to 86% in 2024, while almost all supply growth has come from a single top supplier: Indonesia contributes to the increase in nickel ore production, and China dominates the growth in other mineral supplies.

Fatih Birol, Executive Director of IEA, wrote in the report, "In the context of high geopolitical tensions, critical minerals have become a frontier issue in ensuring global energy and economic security. This new analysis examines potential risks and improvement measures in the critical mineral supply chain to enhance its resilience and diversity. This is at the core of ensuring the reliability, affordability, and sustainability of energy in the 21st century."

The agency said that while policymakers are aware of the challenges, detailed analyses of various proposed projects indicate that progress toward diversifying the critical mineral supply chain will be very slow. Based on current policy settings and investment trends, it is expected that the average market share of the top three suppliers over the next ten years will only decrease slightly.

Birol pointed out that even if the market supply is sufficient, the critical mineral supply chain is highly vulnerable to shocks such as extreme weather, technical failures, or trade interruptions. The impact of such supply shocks could be far-reaching, not only driving up consumer prices but also weakening industrial competitiveness.

IEA report screenshot

In recent years, demand for major energy minerals has grown strongly. In 2024, lithium demand grew by nearly 30%, significantly higher than the annual growth rate of 10% in the 2010s. However, the surge in supply dominated by China, Indonesia, and some parts of Africa has put downward pressure on prices, with battery metal prices falling particularly sharply. Since 2020, the supply growth rate of battery metals has been twice that of the late 2010s.

The report shows that there are risks to the balance between supply and demand over the next decade, as momentum in mining investment is weakening: spending on relevant activities only grew by 5% in 2024, lower than 14% in 2023. Exploration activities stagnated in 2024, breaking the upward trend since 2020.

IEA particularly warned of significant risks facing the copper market, stating that as many countries accelerate grid construction, copper demand will surge, but current copper mine projects show that by 2035, the copper supply gap may reach 30%.

In addition, an increasing number of export restrictions may also affect supply security. Of the energy-related strategic minerals covered in the report, 55% are subject to some form of export control. Moreover, the scope of these restrictions is expanding, covering not only raw materials and refined products but also processing technologies.

The report also conducted an extended analysis of 20 energy-related strategic minerals, finding that although the market size of some minerals may be small, if disrupted, they could have a significant economic impact. Among the 20 minerals analyzed, China is the main refiner of 19 minerals, with an average market share of about 70%. The price volatility of 15 of these minerals has exceeded that of oil.

This article is an exclusive contribution from the Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7507181559457301007/

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