Commentary: Critical Minerals Fuel the Green Energy Transition

The global surge in new energy development has sharply increased the importance of ensuring a sustainable and reliable supply of critical metals, which are essential for the ongoing energy transition. Addressing this challenge requires not only continual technological innovation but also robust systems of resource recycling and diversified supply chains to mitigate associated risks. The stability and growth of emerging industries fundamentally depend on these measures[para. 1].

Over 130 economies worldwide have established carbon-neutrality targets, fueling rapid progress in industries such as wind power, photovoltaic (solar) energy, electric vehicles, energy storage, and green hydrogen. This growth has created a surge in demand for key minerals—including lithium, nickel, rare earths, copper, and graphite—that are vital for the production and functioning of these technologies[para. 2].

Global policies play a significant role in advancing new energy development. The Paris Agreement calls for a reduction in greenhouse gas emissions this decade by more than 40% compared to 2019 levels. Major economies have introduced supportive measures: the EU’s Green Deal, the U.S. Inflation Reduction Act, and Japan’s GX Plan, all of which provide subsidies and tax incentives, leading to increased investment in renewable energy and electric vehicles. Geopolitical events, such as the Russia-Ukraine conflict and instability in Middle Eastern trade routes, have highlighted vulnerabilities in depending on imported energy and minerals. As a response, regions like Europe, America, and East Asia have adopted “friend-shoring” and “near-shoring” to make their supply chains more resilient[para. 3].

Significant technological progress has reduced costs associated with renewable energy. For example, in 2024, the levelized cost of electricity for TOPCon solar modules dropped to $0.03/kWh, energy density of high-nickel batteries surpassed 350 Wh/kg, and alkaline electrolyzer systems fell below $400/kW. These developments have enabled wind, solar, and storage technologies to reach grid parity in most areas. Innovations, including sodium-ion and solid-state batteries, and rare-earth-free magnets, are also influencing future material requirements[para. 4].

However, the supply of critical minerals remains extremely concentrated: over 65% of lithium refining and 90% of spherical graphite refining take place in China. Other important resources, like cobalt, nickel, and rare earths, are sourced primarily from a handful of countries such as the Democratic Republic of Congo, Indonesia, and China. Frequent changes to export control and resource taxation policies often threaten global supplies, particularly during events like geopolitical conflicts or pandemics. There also exists a mismatch between countries holding resources and those with processing capabilities, e.g., Chile and Argentina have significant lithium reserves but lack extensive refining infrastructure[para. 5].

On the demand side, electric vehicles are the primary driver. By 2030, global annual EV sales are projected to reach nearly 60 million units, with each requiring significant amounts of lithium, nickel, copper, and graphite. Energy storage capacity is expected to hit 1.4 terawatts/4.3 terawatt-hours by 2030, mostly depending on lithium iron phosphate batteries. Further, wind and solar power expansion boosts demand for silver and rare earths; for instance, an 18 MW offshore wind turbine uses over 6 tons of neodymium-iron-boron magnets, and annual demand for photovoltaic silver paste is rising roughly 9%[para. 6].

In response, nations are developing strategic reserves and recycling plans. The U.S. aims to extend its critical-mineral reserves to 10 years, sourcing preferentially from North American or allied suppliers. The EU targets 10% self-sufficiency and 15% recycling rates for critical minerals within a decade. New approaches—such as Direct Lithium Extraction (DLE), High-Pressure Acid Leaching (HPAL), and battery recycling—are expected to supply over 10% of global lithium, nickel, and cobalt needs by 2030[para. 7].

Investment priorities include securing low-cost mines, establishing refining capacities in the U.S. and Europe, backing alternative technologies early, hedging price risk with contracts and derivatives, and deploying digital tools like blockchain and AI for improved traceability and forecasting[para. 8].

The minerals market over the next ten years will face challenges regarding the quantity, quality, and speed of supply. Success will require balancing global and local strategies, building both mining assets and processing/recycling alliances with key partners. Maximizing resource efficiency and minimizing environmental impact through innovation and digitalization, alongside embracing circular economies and financial advancements, will be crucial for transforming risks into opportunities in the green-metals sector[para. 9].