Table of Contents
This article aims to assess the impact of the energy transition on minerals availability and to answer the question of whether these could become critical to the power and the transport sectors due to the high metal content of low-carbon technologies compared to conventional technologies.
1 INTRODUCTION
1.1 A growing constraint
Following the Paris Agreement, and global pressure, governments, and major companies are seeking to reduce energy-related carbon emissions. They have mostly attempted to do this by deploying alternative sources of electricity, such as wind, solar, and hydropower. However, the discussions around energy and raw materials clash with the fact that transitioning to renewable energy (RE) is heavily dependent on the mining industry providing the metals and minerals necessary for its construction and operation. And that is because clean energies typically require more minerals than fossil fuel-based analogues. An electric car uses five times as much minerals as a traditional model, and an onshore wind plant encompasses eight times as much minerals as a gas-fired plant of the same capacity.
Mineral resource dependency is a clear example of the difficulties our society is likely to face in the pathway of energy transition. Many have already underlined the need to take this into account in the dynamics of the global energy shift, in particular, resource distribution, industrial sector organisation, and strategies of stakeholders. With the various alternate approaches under review for achieving the objectives of the Paris Agreement, it becomes necessary and valuable to assess the burgeoning need for minerals in low-carbon technologies.
Figure 1. Minerals considered critical for energy systems: risk and importance. Source: https://www.mining.com/web/rare-earths-cross-hairs-new-high-tech-arms-race/
Criticality assessments are being conducted to cover many aspects of concern, which are usually vulnerability and supply risk based on economic burdens, geopolitical considerations, geological or technical barriers, environmental impacts, or social implications. The rare earth elements (REE) production concentrated in China is a paradigmatic case.
And whereas contemporary economic literature generally focuses on lithium, cobalt, and rare earths to illustrate the profound impacts of the energy transition on raw materials, this conversion will also potentially strike the major non-ferrous metal markets, like copper, nickel, and zinc, as well as steel, cement, aggregates and water sectors. Understanding whether the limited availability of minerals can hinder the deployment of low-carbon or conventional technologies in the economy is then imperative.
1.2 What are minerals used for?
Solar Photovoltaic (PV)
There are two main types of PV panels used today, crystalline silicon and thin-film technologies. Crystalline silicon technology dominates the global market with more than 95% of market share and contains 8% aluminium (frame), 5% silicon (solar cells), 1% copper (connectors) and less than 0.1% silver (contact lines) and other metals (e.g. tin and lead). Thin-film technologies, including copper indium gallium (di)selenide (CIGS) and cadmium telluride (CdTe), make up the remainder of the market – containing less than 1% semiconductor material (indium, gallium, selenium), and are used in more specialised applications [1].
Wind turbines
The primary raw materials required for wind turbines are bulk commodities: steel, copper, aluminium, concrete, and carbon. The steel structural components account for about 80% of the total weight of the turbine. Some turbine generator designs use direct-drive permanent magnet generators that contain neodymium and dysprosium.
Batteries for grid storage and EVs
Lithium and cobalt have an annual demand from batteries for EVs and stationary storage that far exceeds current rates of production. In a permanent magnet engine, rare earth elements, such as neodymium, terbium, or dysprosium, are found. Permanent magnet motors are not used for all EVs: copper coils are based on induction motors.
The latest technology to emerge is the vanadium redox battery. V-flow batteries are entirely containerised, non-flammable, lightweight, reusable over semi-infinite cycles, discharge 100% of the energy stored, and have not been depleted for more than 20 years [2]. The surface of the Planet has much more vanadium than lithium, and each year we generate twice as much V as Li. So far, commercialisation of vanadium flow batteries has suffered from the high cost.
Figure 2. Metal requirements for power generation. Source: https://www.scientificamerican.com/article/renewable-energys-hidden-costs/
Copper is in high demand due to its high conductivity and durability. Essential to an efficient generation and delivery of electricity to homes and businesses, it is the best nonprecious conductor of heat and electricity. According to the International Copper Association, around 35% of copper has been used for electrical power utilities in the last years, and this share could increase with the deployment of renewable energy technologies [3]. Within an operating wind turbine, the Cu content is 2.5 – 6.4 tonnes per megawatt, arranged in the generator, the transformers, and cabling [4]. Lithium, cobalt, and nickel provide batteries with greater charging performance and superior energy density.
Then, there are rare earth metals. Specifically, some of these elements play important roles in many clean energy composites. For example, they are necessary for permanent magnets, which are used in electric drive and hybrid vehicles and wind turbines, for thin films, which are used in PV cells. Take for example dysprosium and neodymium; both used to make alloys for the permanent magnets found in wind turbine generators, with a single five-megawatt wind turbine requiring one tonne of alloys.
1.3 A Restricted Supply Chain
Critical minerals are defined as commodities having a considerable impact on the economy as well as a high risk of a supply shortage. Among these, thin photovoltaic cells, wind turbine generators, and lithium-ion batteries are among their most relevant green-tech applications.
A breakdown of the general lifecycle of minerals shows that they are not uniformly distributed in the Earth’s crust [5], as observed in the geographical distribution of critical minerals ore reserves and resources:
The production of many minerals that are central to energy transitions is more geographically concentrated than that of fossil fuels. For cobalt and lithium, well over three-quarters of global production is dominated by the top three suppliers. In certain cases, about half of worldwide production is accounted for by a single country. Refining operations are also poorly scattered, with China alone accounting for some 50 to 70 per cent of Li and Co refining.
The current lack of diversity in the supply chain of raw materials in general and minerals in particular, along with the accelerated introduction of both decarbonisation and digital technologies expected to comply with more stringent emissions standards in short to medium term, raises questions about the viability of achieving short-term public goals. What is more, there have been significant obstacles facing the mining industry in recent times, from pressure from activists to cut carbon emissions, to projects considered harmful to the environment and destructive to indigenous cultural heritage.
The risks surrounding renewable energy supply chains, including those of minerals, have come into sharper focus as the Covid-19 pandemic has forced many nations into a sort of lockdown and hit mining operations around the globe. Covid-19 has underscored the urgency to monitor the security of minerals supply for a sustainable energy future. Peru’s copper-mining operations, which are responsible for 12 per cent of global production, ground to a halt. South Africa’s lockdown threatened 75 per cent of the global platinum supply, a crucial component in renewable energy technologies and pollution reduction devices [6].
Figure 4. Share of top 3 producing countries in total production for selected resources and minerals, 2019. Source: https://www.iea.org/data-and-statistics/charts/share-of-top-3-producing-countries-in-total-production-for-selected-resources-and-minerals-2019
That being the situation, it appears that current supply chains can quickly be affected by trade restrictions, regulatory changes, or even political instability in a small number of countries. That was the case with the Democratic Republic of the Congo, which virtually tripled the royalty rate on cobalt by classifying it as a “strategic” substance in 2018. Indonesia banned nickel ore exports starting 2020 and China’s previous attempt to limit rare earths exports had severe side effects on the market.
2 WHAT IS DRIVING THE DEPLOYING OF RENEWABLES
2.1 The Energy Transition
The global energy transformation requires significant changes in the energy sector, with renewable energy at the core of the transition. Although steps have been taken in the right direction in recent years, an energy revolution based on clean energy deployment, electrification and efficiency need a very substantial acceleration. This transition includes the deployment of low-carbon technologies, based largely on renewable energy, to generate a transformation that limits the rise in global temperature to well below 2 degrees Celsius above pre-industrial levels.
Because energy-related emissions account for two-thirds of global carbon dioxide emissions, mitigating climate change will require satisfying much of that demand with low-carbon energy sources rather than fossil fuels. Variable renewables (VREs), i.e. solar and wind, are the preferred ones when regarding public opinion, investors, and government bodies, to the detriment of more conventional low-carbon sources such as hydro and nuclear.
The table below depicts recent trends and expected levels of ambition for each indicator according to the renewable energy roadmap analysis (REmap) by the International Renewable Energy Agency (IRENA) analysis.
Table 1. Summary of recent trends and required levels of RE indicators. Source: https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2019/Apr/IRENA_GET_REmap_pathway_2019.pdf
More and more companies around the world are engaging in self-generation and the procurement of green energy on a voluntary and active basis. Electric vehicles (EV) also play a critical role in meeting sustainable development goals to reduce local air pollution and to address climate change.
In a future driven by more stringent environmental and emission constraints and continued economic growth, the increasing mineral content of all decarbonisation innovations, particularly in the transport and power sectors, could, due to limited resource availability, hinder the diffusion of these technologies. The variability of technologies and their rapid evolution make it difficult to quantify the full requirements for energy raw materials.
2.2 Future Scenarios for a Renewables Scaleup
Electrification and the deployment of renewables must accelerate towards 2050 to achieve the aims of the Paris Agreement. Although the share of renewable energy in electricity generation has been increasing steadily, from around 20 per cent in 2010 to 26 per cent in 2018, it would need to climb to 86% in 2050 if following IRENA’s roadmap [7]. Similarly, the total share of renewable energy would need to rise from around 14% of total primary energy supply (TPES) in 2016 to around 66% in 2050.
Figure 5. Monitoring the Energy transition. Source: https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2019/Apr/IRENA_GET_REmap_pathway_2019.pdf
Recent developments have been pointing the way forward, with additions to renewable power capacity exceeding fossil fuel generation expansion by a widening margin. For the eighth successive year, the net additional power generation capacity of renewable sources exceeded that of conventional sources. In 2018, an estimated 160 gigawatts of solar and wind were added globally [7]. Wind and solar will dominate electricity generation by 2050. Nearly two-thirds of the world’s electricity would come from solar and wind power, with installed wind capacity exceeding 6,000 gigawatts and solar capacity of more than 8,500. Only to achieve this, investments in renewable power generation capacity would total USD 23 trillion, with three-fourths of the invested money required to deploy wind and solar PV.
Many governments are strengthening efforts to reduce national energy-related emissions. In a recent statement to the United Nations General Assembly, China’s President Xi Jinping committed to have carbon emissions peak before 2030 and achieve carbon neutrality before 2060 [8]. This would be huge in terms of electrification, renewables, and infrastructure investment. Even if new net-zero emission goals seem to be achieved by a bigger rise in nuclear power generation than that of wind power, they will certainly further spell minerals and metals demand.
In South Australia, more than 30% of households have a PV system installed, the target for the region is to reach 75% renewables in the generation mix by 2025. Targets to maximise the share of renewables in the energy mix have also been set by an always growing number of cities:open-cut Vancouver, Canberra, and Malmö, for example, are working towards 100% renewable energy [9].
In this context, it would be valuable for any energy analyses to examine the geological, geopolitical, social, water resources allocation risks related to raw material supply availabilities and how they could impede the energy transition.
3 CRITICAL MINERALS
3.1 Prospective Analyses of Minerals Demand
The green energy transition is underway. But solar and wind come with their up-front carbon and raw-material costs too. Photovoltaics require much more aluminium—for panel frames and other uses—than other technologies do; and alloys for wind turbines demand lots of nickel. It is important to incorporate the mineral supply chain in long-term energy systems models to take into account the supply limitations on resources for technologies needed to shape both the ongoing and the future energy transition.
Figure 6: Amount of minerals required for power generation. Source: https://www.iea.org/data-and-statistics/charts/minerals-used-in-selected-power-generation-technologies
At present, the global wind industry demands an estimate of 450 kilotons of copper per year, which is projected to rise to 600 kilotons per year by 2028. Given these scenarios for wind power, global demand for neodymium and dysprosium is expected to rise by 2.1 fold, with 65 per cent of new turbines installed within the next ten years integrating rare earth metal technologies [10].
Electrical transportation and grid storage have been the largest consumers of lithium, accounting for 35% of today’s global production. Correspondingly, the share of these applications in cobalt demand has risen from 5% to almost 25% over the same period. Although supply has responded, price unpredictability has become a wake-up call for businesses and policymakers in terms of the value of secure mineral sources.
Whilst a conventional car requires an average of 20 kilograms of copper — mainly as wiring —, an EV requires around 80 kg. With 250 million electric vehicles on the road by 2030 — more than 30 times above today’s level — in a Sustainable Development Scenario by the International Energy Agency [11], massive minerals inputs are to be expected, especially for copper, but also aluminium and active materials such as nickel, cobalt, and graphite.
Figure 7. Minerals used in EV versus conventional cars. Source: https://www.iea.org/data-and-statistics/charts/minerals-used-in-selected-power-generation-technologies
The assessment of possible future growth of minerals along with energy transition could be subdivided into four main categories of approach: 1. Considering past trends or assuming expected growth rates based on experts’ opinion; 2. Using prediction models for exhaustible resource production; 3. Using the outputs from a long-term energy model or specific road mapping process as inputs into dynamic raw material demand assessment; and 4. Integrating raw material supply chain and life cycle inventory metrics as inputs and constraints into prospective energy models.
Demand models are driven by a set of demands for energy services in all sectors: agriculture, residential, commercial, industry, and transport. Several input parameters characterise each element in the system (Fig. 8). The construction of the exogenous demands for energy services is generally achieved via general equilibrium models providing a set of coherent regional and global drivers, such as population, households, GDP, sector outputs, and technical progress [3]. These factors provide the growth rates for each demand for energy services through to 2030, 2040, 2050, and so on. Recycling is also implemented in different demand scenarios.
Figure 8. Integrated assessment model’s reference energy system. Source: https://ars.els-cdn.com/content/image/1-s2.0-S092134492030389X-gr1_lrg.jpg
An important outcome of this modelling approach is to link the diffusion of low-carbon technologies to mineral resources: it has been found that the considered technological mix and its future evolution interact directly with the rate of mineral-resource depletion. China and Europe are set to become highly dependent on external supply, and Australia, southern Africa, Central, and South America will provide a substantial share of production to meet the additional demand following the energy transition process.
3.2 The case of China and the Rare Earths Elements
Rare earths are an assortment of 17 minerals comprising scandium, yttrium, and the lanthanides. The lanthanides are a group of 15 — cerium, dysprosium, erbium, europium, gadolinium, holmium, lanthanum, lutetium, neodymium, praseodymium, samarium, terbium, thorium, thulium, ytterbium — chemically similar elements with atomic numbers 57 through 71, inclusive. REE are vital to the manufacturing of smartphones, batteries, military weapon systems, and countless other advanced technologies. Much of its new demand is being driven by the rapid expansion of the renewable energy and EV industries, which utilise large quantities of rare earth permanent magnets. China accounts for roughly 85 per cent of the world’s rare earth oxides production and approximately 90 per cent of rare-earth metals and alloys [12].
Many rare earth elements are relatively abundant, despite their name. Withal, the method of extracting rare earths and turning them into useful materials is costly and detrimental to the environment. For years, China exploited its relatively low-cost labour force and lax environmental laws to achieve a competitive advantage in the world market and become the top producer of rare earths. From 2008 to 2018, China exported nearly 408,000 metric tons of rare earths, which is 42.3 per cent of its exports over the period; the United States, Malaysia, and other suppliers were only beneath the 9 per cent threshold.
Figure 9. Rare earths final uses. Source: https://www.ft.com/content/5104d84d-a78f-4648-b695-bd7e14c135d6
The global rare earths trade is comparatively modest compared to other commodities; however, the total value of goods produced using rare earths is huge. Each Apple iPhone, for example, relies on multiple rare earth elements. Used in large amounts in electric car batteries, lanthanum was China’s top rare earth export by a wide margin. Each Toyota Prius, for instance, contains some 10-15 kilograms of the metal [12].
In clean energy, rare-earth metals — dysprosium, neodymium, terbium, yttrium, lanthanum amongst others,— are key components in the development process of new technologies. Affordable domestic supplies allowed Chinese manufacturers to scaleup the production of critical products like permanent magnets, which are integral to the functioning of wind turbines.
In 1990, the Chinese government declared rare earths to be protected and strategic minerals, banning foreign companies from mining rare earths in the country and limiting foreign investment in rare earth production projects. Some years later, it steadily tightened the export quotas, then cut them abruptly by 37% in 2010; the move caused the average price of global rare earth imports to skyrocket. The World Trade Organization ruled against China, and by 2015 China finally ended its export quota system. But Beijing has also sought reform of its rare earth industry in recent years to improve efficiency, better protect the environment, and prevent illegal mining. Beijing’s capacity to unilaterally disrupt supply chains has likely motivated other powerful nations to shift market dynamics and establish new rare earth suppliers.
Affluent governments have made notable policy changes, including the addition of rare earths to lists of minerals deemed critical to economic and national security. In July 2019, President Trump declared rare earth metals and alloys “essential to the national defence”, which authorised resources better to protect the potential of domestic rare earth production. Other economies have sought to reduce rare earth imports. The EU funded an initiative to recycle permanent magnet waste into new alloys and materials; this is aimed at both reducing dependency on China and helping Europe accomplish its climate change objectives. But despite these and other measures, only Japan has somehow reduced its reliance on China. From 2008 to 2018, the share of Japanese rare earth imports from its neighbour fell from 91 per cent to 58 per cent.
Mining of raw rare earth materials outside of China has ramped up significantly in recent years as California’s Mountain Pass mine, and other mines in Brazil, India, Russia, and former Soviet states have increased their output. Australian miner Lynas Corporation is currently the only supplier outside of China, capable of processing REE [13]. Lynas currently ships ore from its Mount Weld mine in Western Australia — said to be one of the richest rare earth deposits in the world — to a state-of-the-art plant in Malaysia for processing into neodymium and praseodymium; key ingredients in the most widely-used rare earth magnets.
REEs may experience unprecedented demand growth. In particular, when estimating resource requirements for electric vehicles (EVs) and wind farms from performance specifications and vehicle sales or turbine deployment projections, it has been found out that REEs are the metals most challenging to reduce total demand through substitution and efficiency, and offset primary demand through recycling [1].
4 MAIN CHALLENGES FOR A SUSTAINABLE MINERAL SUPPLY
4.1 Economic concerns
Research has already shown that during periods of price increase, price changes in minerals affect the stock market performance of some renewable energy indices [14] negatively. Owing to a protracted recession and low prices in 2020, many companies have postponed or cut their budgets for planned investments [15]. The indicated spending cuts are overmuch affecting new mines or market newcomers, restricting the scope for buyers to diversify sources of supply or shield supply chains.
Innovations in battery performance and chemistry have significant implications for EV metal demand, and so they could impact sentiment towards a possible financial blow to miners. Notably, Tesla and other manufacturers are hoping to offer affordable EV in the next years. Cathode design improvements are also gaining momentum, with market watchers hearing that car-makers are working to remove cobalt from its batteries. The step would eliminate the costs and supply risks associated with this raw material. Tesla is on a quest to increase nickel instead, which would bring more energy density to its batteries. Yet, experts say cobalt provides resilience in the cathode, and the possible financial consequences for this are immense since if capacity decreases below the manufacturer’s stipulated retention in the warranty, the pack would need to be replaced at the automaker’s cost [16].
4.2 Geopolitical concerns
The idea of energy geopolitics is usually correlated with oil and gas. Solar, wind, and other renewable energy alternatives, on the other hand, are seen as exempt from such risks. Yet, there are geopolitical hazards associated with the production of critical minerals and the transition to a zero-carbon world may shift power in very unexpected ways. Dramatic shifts in the world’s energy sources will create new foreign-policy risks even as old ones subside.
Figure 10. Three examples of concentration in metals production. Source: https://www.earthworks.org/cms/assets/uploads/2019/04/MCEC_UTS_Report_lowres-1.pdf
Top tech-industry leaders’ import reliance for minerals and metals has nearly doubled over the past two decades, leaving the backbone of supply chains out of their control. A recent Foreign Policy Analytics’ Special Report [17] discloses the far-reaching implications of China’s dominant stake in the global minerals market. Chinese processing rates for metals such as cobalt, vanadium, and graphite means that the availability of irreplaceable components used in anything from EVs, solar panels, and wind turbines to semiconductors, can be manipulated almost unilaterally.
Given that China and other big players are less and less keen on exporting strategic raw materials and are increasingly limited by their internal demand, many importing countries and regions have taken resource supply constraints as a priority by formulating strategies for raw materials. Europe is such an example, with the European Commission recently sounding alarm on critical raw materials shortages. The Commission presented an Action Plan on critical raw materials [18] for strategic technologies and sectors from the 2030 and 2050 perspectives. Likewise, on September 30, the US Presidency issued an Executive Order on “Addressing the Threat to the Domestic Supply Chain from Reliance on Critical Minerals from Foreign Adversaries and Supporting the Domestic Mining and Processing Industries” [19].
As the world works to rebuild in the wake of economic turmoil spurred by the COVID-19 pandemic, policymakers should first prioritise the stability of supply chains, including metals that are critical to renewable energy technologies manufacturing. These actions will promote our transition towards a green and digital economy, and at the same time, bolster global resilience and open strategic autonomies in key materials involved in such transition.
4.3. Geological and technical concerns
Long-term trends in mining are critical in understanding sustainability and geological burdens. The principal issues include increasing production, declining ore grades (or quality), increased open-cut mining, and associated waste rock or overburden and remaining economic resources [20]. Combined, these aspects are critical in quantifying potential resources, the scale of mining, and also underpins the sustainability of extractive businesses. There is significant room for changes in the classification of geologic resources to economically mineable resources, especially for those involved in renewable energy development.
Ore grades, gradually declining, are unlikely to ever increase in the future with some metals likely to decrease by about half soon. If these indicators are steadily but permanently decreasing, exploration of high-grade deposits is becoming increasingly uncommon. A common pattern is the mining of rich ores upon discovery and early development, followed by a rapid decline as dominant ore types evolved (e.g. oxidised to sulphide copper ores). Then a more gradual decline as economics and technologies converge to allow feasible lower-grade ventures.
For all metal commodities, there appears no real prospect of average ore grades increasing in the medium to long-term. This is a factor contributing to the scale of individual mines increasing worldwide. Over time the mining industry has had to adapt technology to maintain economic activities or increase production potential, with the zinc problem, sulphide ore, and nickel laterite problems being prime examples among others. At present, it turns indispensable to keep a systematic reporting of the nature of various ores being mined and processed across operations. Moreover, if ores are becoming more complex, significantly as ore grades decline in tandem, the exact significance in terms of water, land footprint, and energy remains relatively ignored.
In regards to electric vehicles, as volumes of spent batteries increase, the development of an adequate recycling activity will be key to the sustainability of Li-ion batteries. A comprehensive recycling scheme will decrease demand for raw materials, greenhouse gas emissions, and adverse local effects from mining and manufacturing while maintaining workforce demand. Current recycling facilities using mainstream technologies such as pyrometallurgy and hydrometallurgy may contribute to a limited carbon footprint — about 10 per cent — compared to a battery manufactured from primary raw materials [11].
4.4 Environmental impact aspects
Accompanying the quest for renewable energy is the goal of making mining sustainable into the future. Despite the importance of mineral resources, this does not eliminate uncertainty about the capability and consent of its producing mechanisms to continue increasing production volumes, particularly due to environmental externalities, such as local pollution and water resource availability, caused by the current exploitation of the ore produced.
Mining requirements for scaling up renewables potentially affects 50 million km2, substantially overlapping with key wilderness and biodiversity areas:
Figure 11. Global mining areas and their density. Source: https://www.nature.com/articles/s41467-020-17928-5/figures/1
In Figure 11, mining areas targeting materials critical for RE technology and associated infrastructure are shown in blue, areas with properties targeting other materials are shown in orange, and those targeting both commodity types are shown in purple. Biodiversity conservation sites and priorities within mining areas. Approximately 8% of the global area potentially influenced by mining overlapped with protected areas, indicating extensive threats to currently protected biodiversity [21]. There is an immediate need to consider and strategically prepare for the extent of mining threats to biodiversity in environmental strategies and policies.
Current trends in mining processes are also expected to lead to new environmental challenges in the future, among which are mine-waste management issues related to mining larger deposits for lower ore grade; water-management issues related to the changes in precipitation brought about by climate change; and greenhouse gas issues related to reducing the carbon footprint of larger, more energy-intensive mining operations [22]. A key aspect of identifying the environmental risks and mitigating those risks is understanding how the risks vary from one deposit type to another.
Mining environmental regulations in developing nations have tended to be comparatively poor. However, with globalisation, they are reviewing and extending existing regulations to become more aligned with those of global partners. Besides, large multinational firms comply with identical procedures everywhere they operate, regardless of the presence or absence of local regulations. That may not be the case with cobalt miners. Their biggest challenge is still extracting responsibly and sustainably, especially for projects in the Democratic Republic of Congo, a country long troubled with inefficient governance, political unrest, and human rights abuses.
4.5 Social acceptance
Justified tightening of social conditions for production could put large volumes of mineral supply at risk. Social aspects are considered by introducing the categories of small scale mining, indigenous populations, and human rights abuse. Consumers are more and more interested in compliance with social standards. Manufacturers will therefore have to make sure the metals used in the making of its magnets, grid components, and EVs are ethically sourced.
Materials mined in small scale mining operations are often used to pay for violent conflicts and armed disputes and are characterised by unacceptable working conditions [23]. In comparison, small-scale artisanal mining is considered much more harmful to human well-being than small-scale industrial mining because of its extreme physical labour requirements. Additionally, mineral suppliers must take into account human rights violations, to which consumers react sensitively.
Water scarcity is linked to severe human health issues (e.g. malnutrition), especially in developing countries. It is essential for mining operations and thus, often associated with being in direct competition with social needs. Copper production in both Chile and Peru (40% of global output) is subject to social disruptions and rising costs. Mines in South America are exposed to high levels of water stress, concerns about resource allocation, and risk of indigenous people unrest.
In some instances, established extraction methods are ineffective, unhealthy, and subject to social opposition. Around 20 percent of cobalt production in the DRC relies on “artisanal” miners who, under unsafe conditions, harvest minerals with primitive tools. This poses additional challenges for stable sourcing of minerals amid growing social, cultural, and environmental concerns. A consortium of players in the cobalt market has embraced the Responsible Minerals Initiative (RMI) to spot red flags such as child labour in their sourcing. Similarly, the Fair Cobalt Alliance aims to create proper working conditions for those who work at a Co mine. There is much work left to keep children from working within any cobalt mine as well, and urgent monitoring mechanisms are needed to ensure fair labour that does not include underage miners.
Figure 12. Trends in cobalt sourcing. Source: https://www.mining.com/wp-content/uploads/2020/07/cobalt-output-congo.jpg
5 CONCLUSIONS
In the context of the energy transition, and because metals are used in many applications in the transport and power sectors, these raw materials appear to be an interesting case study on criticality issues. It is outsourced in this article that the rate of increase in world metal consumption is likely to put pressure on existing production capacity. To not hamper a low-carbon future, the rapid increase in mineral consumption should, from now on, be followed by the development of recycling sectors and demand management policies. It is, therefore, to underline the importance of policies to mitigate future demand trends.
Mining finds itself at a crossroads. The industry will play a key role in supplying the metals and minerals that will fuel the widespread deployment of electric cars and the expansion of solar power as the transition to cleaner sources of energy accelerates. But in a world where consumers are more demanding, and investors weigh social, environmental, and governance metrics, metal producers, will also have to tell their story better.
As per the REE, China is steadily tightening its grip on the entire vertical supply chain. The automotive industry, high-tech manufacturers, and western governments will continue to be outflanked by Chinese competitors before they can cooperate and use their purchasing power to underwrite investments in rare earth mining and other downstream operations. Europe and the USA were formerly home to robust mining industries that had the potential to service global metal demands if allowed to do so.
Other perspectives for further research on critical minerals would be to analyse the impact of an increased recycling rate. Also, it would be pertinent to implement and analyse the impact of water resource availability on some major raw material production. The integration of strategic materials such as cobalt, nickel, and rare-earth metals would be very valuable with the increasing deployment of EVs and VREs. New global energy models could be advantageous as a decision-making tool to understand better investments in low-carbon technologies based on future mineral resource constraints for better sectoral assessment.
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