Top Rare Materials Needed to Achieve Global Clean Energy Goals

Anastasia Popova is a Content Marketing Manager at Minespider
Anastasia Popova
Global clean energy demand can be met thanks to rare earth minerals and such materials as copper, lithium, nickel, and cobalt. At the same time, there are certain risks, including limited production capacity, rising energy costs in the production process, logistics, and quality level which is only becoming harder to reach. In this article, we list the top materials needed for the transition to clean energy, and the risks associated with them.
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About the author
Anastasia Popova is a Content Marketing Manager at Minespider
Anastasia Popova
Anastasia is a Content Marketing Manager at Minespider. She is passionate about B2b marketing, content, PR and emerging technologies. Anastasia has over 10 years of experience working with deep-tech startups and corporations like Honeywell, Eaton, Rockwell Automation, and others.

Production and processing of minerals such as lithium, cobalt, and some rare earth elements are dominated by a handful of countries. Three countries account for more than 75% of supplies. How does the global rare materials market look? What are the top five minerals for the future clean energy transition?

In this article, we list the top materials and talk about the associated challenges, including production capacity, energy costs, and quality.

Copper

The demand for copper has risen dramatically as the world goes towards electric and net-zero emission goals. Sustainable technologies for solar panels and EVs rely on copper components. S&P Global predicts that clean energy policies will double the demand for copper to 50 million metric tonnes annually by 2035.

The top global producers of mined copper are Chile and Peru. Together they account for more than a third of global output. Among other producers are the DRC, the United States, and Australia. China is a dominant market player in copper refining with approx. 40% of the market.

Among the main challenges related to world copper production is the quality of ores. Production of the major copper mines has already peaked or is expected to peak due to declining ore quality and reserve exhaustion. At the same time, the development of the new deposits is getting pricier and more complicated. New projects face regulatory pressures. Despite copper being needed for the transition to clean energy, the production of this material itself could be an environmentally-unfriendly process. On the other hand, there are many efforts for technology innovation and efficiency improvement.

Lithium

When we talk about clean energy, the first association is lithium-ion batteries. With the rapid advancement in rechargeable battery technology and the boom for EVs, over the past two years, the price of lithium has risen 13-fold.

The main challenge associated with the global lithium supply is a dependency on China. They control 70%-80% of the supply chain for EVs and lithium-ion batteries.

The most critical part is converting raw materials into lithium chemicals. Only a few companies can produce high-quality, high-purity lithium chemical products, e.g., lithium hydroxide. Approximately 60% of global lithium chemicals are also produced in China. Big EV manufacturers (Ford and Tesla are among them) put their resources into the exploration of other lithium supply opportunities. Among top investment priorities are new extraction methods projects. Experts expect these new extraction methods will be central to making up the shortfall of lithium needed to facilitate the increased demand.

Nickel

Nickel is another material with a limited number of producers involved in the supply chain. The market is dominated by Indonesia and the Philippines. These two countries represent 45% of global nickel output today.

At the beginning of 2020, the government of Indonesia implemented a ban on nickel ore exports - the country aims to process its ore in domestic smelters and develop the country's downstream industry. The Philippines or New Caledonia are considered to become alternative suppliers. Besides, increasing demand for batteries drives demand for battery-grade Class 1 products. HPAL (high-pressure acid leaching) is gaining traction to produce such products from laterite resources. Several projects are being developed in Indonesia and the Philippines, however, they are associated with large cost overruns, delays, and related environmental issues.

Cobalt

Despite high-nickel content chemistries evolving and their ability to potentially decrease the demand for cobalt in the future, clean energy technologies and EVs still need this material.

Some 70% of cobalt is produced in the DRC as a by-product of its copper mines. Among the top producers are Glencore and China Molybdenum. The exploration projects are being developed primarily in the DRC. This means that the country will dominate the global cobalt market in the coming years.

China accounts for almost 70% of the global cobalt processing market share. This makes the global cobalt supply chain almost fully dependent on only a few countries, regional policies, incidents, and limited trade routes. ASM sites in the DRC are frequently associated with unsafe conditions for workers and the presence of child labor - an issue many entities are working to improve on.

The other challenge with the cobalt supply chain is the production specifics. Cobalt represents a by-product of copper and nickel. This means that cobalt prices have a huge dependency on the demand for these two materials.

Rare Earth Elements

REEs are a group of 17 elements, including 15 elements in the lanthanides group, scandium, and yttrium. Some of these materials are critical for the global clean energy sector. Production and processing markets are denominated by China. With this, many challenges emerge - the first of them is untransparent pricing.

Some of the REEs co-exist in the same ore bodies. And while four REEs (neodymium, dysprosium, praseodymium and terbium) have a bright outlook for future usage in the clean energy sector, others, e.g., cerium and lanthanum, are not guaranteed to have such a demand. If a company is to produce neodymium to meet rising demand, it also needs to deal with surplus cerium, the price of which is likely to remain subdued. Besides, as with copper and nickel, environmental issues exist when talking about future production and processing, e.g. higher CO2 emissions and tailings disposal.

With the increasing demand, REEs will be developed faster in China and beyond.

Some projects are already under development in Australia, Canada, and the United States. Several processing plants are also under development in the United States. There is a need for technology to ensure sustainable and energy-efficient production. One of the areas with high potential is recovering REEs from the deposits of nuclear fuels, with some financed projects in this area already existing.

Technology Plays a Vital Role

We are facing a paradox: on the one hand, there is a need for new technologies, processes, and production methods to boost green energy developments. On the other hand, we often need more elements to create these technologies.

We are optimistic that technology offers a net-positive effect. One example of the challenges posed by the copper industry is that over the past 15 years, the average copper ore grade in Chile has decreased by 30%. As a result, copper production consumes more energy, which could be associated with a larger amount of CO2 emissions and higher costs. Technology that counters this is the Chilean firm Rayrock’s QX technology. It enables manufacturing chemicals through the matter’s properties transformation. This makes it possible to capture multiple elements in a single process, reduce water consumption up to 20 times and traditional consumables consumption to 30-50%, with shorter production cycles and inert residues, working within the ecosystem.

The clean energy transition is only possible if the risks associated with these critical materials are mitigated. Among the most important issues are production and processing costs, dependency on a few producers, and environmental concerns. One of the biggest challenges is ensuring rare materials production, processing, and usage in a sustainable and energy-efficient way, from mine to the end-user. Finally, to make this transition possible, we need close cooperation between governments and companies involved to develop mineral strategies and align with the global climate change goals. Plus, we need technology to play a key role in mitigating issues at each stage of the supply chain, from exploration, production, and processing to transportation.

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