Critical minerals may be metallic or non-metallic and are extremely significant to the modern economy. Highlighting their importance, several governments have been actively securing access to critical minerals in the past year by strengthening existing strategic alliances or forging new trade agreements.
Critical Minerals: Providing New Opportunities for Cleaner Energy Production
The conventional methods of energy production are harmful to the environment. This has forced scientists to look for cleaner ways of producing energy. The International Energy Agency has published a report stating the importance of critical minerals for sustainable energy production.
As per the IEA, lithium, copper, and rare earth minerals are used in modern electric vehicles and wind turbines and are an essential part of modern sustainable methods utilized to generate energy. Since governments worldwide focus on cleaner energy production, the demand for critical minerals has risen by more than 50%.
The IEA is fully integrating these minerals into its Global Energy and Climate Model, allowing for regular updates on demand and supply projections based on the latest policy and technological advancements. These projections are published in reports like the World Energy Outlook and the Global EV Outlook.
There has been a 30% increase in critical minerals investments in 2022 compared to previous years. The most extensively utilized critical mineral is lithium. Most investment has been made for mining lithium, followed by copper and nickel.
Challenges Related to Critical Minerals
Several technical and market-related challenges hinder the rapid commercialization of critical mineral projects. Technical risks arise from the complexity of the mining process and the necessity for specialized processing and equipment. Project risks such as the operations in remote areas and the substantial capital and energy demands are the core reasons various investors are still doubtful about the critical minerals industry.
Critical Minerals: Supply Chain Outlook
Critical minerals are not just building blocks for technology; they are essential for national security, guaranteeing economic progress and resource availability.
According to the World Bank, the ambitious goal of decarbonizing the global energy system by 2050 is only possible by discovering and utilizing 3 billion tons of these critical materials.
Mineral Economics states that beyond their vital role in clean energy, critical minerals are essential for modern industrial systems. The concept of a secure supply chain for these critical minerals is linked to global industrial changes and technological advancements.
The US Geological Survey rates the nation’s risk of critical mineral shortages using three main factors:
How much the country relies on imports
How much those imports are processed in other countries
How much foreign ownership there is of mineral mines and operations
There are two main ways to assess the security risk of the supply chain for critical minerals. The first is the “Mineral Commodity Net Import Reliance” method created by the US Geological Survey. This method uses a visual representation to show how much the US depends on other countries for critical minerals, how diverse its sources are, and how vulnerable the supply chain is.
The second method involves using a system of indicators to assess the risks associated with critical mineral supply. With technological advancements and increased data availability, this evaluation system has become increasingly complex, encompassing multiple factors, objectives, and dimensions.
Recovery of Critical Minerals from Mines: A Key Step Toward Sustainable Future of Critical Minerals
The latest article in the Journal of Environmental Chemical Engineering has highlighted that the sustainable future of critical minerals depends on their efficient extraction and cost-effective recovery.
Extracting critical minerals from used materials often requires different methods than those used for newly mined resources. One common method is hydrometallurgy, which involves using water-based solutions to dissolve and separate the desired minerals.
Bio-hydrometallurgy is another process sometimes referred to as the advanced process of hydrometallurgy. It involves using specific microorganisms that break down the minerals in a simplified form, which aids the extraction process. Bio-hydrometallurgy is much more efficient and less expensive compared to its counterparts. These benefits can make bio-hydrometallurgy a more efficient and sustainable option for recovering critical minerals, especially from low-grade sources.
Critical Mineral Strategy by the Government of Australia
Australia has positioned itself as a key player in the global critical minerals market, aiming to become a leading producer of raw and processed materials essential for clean energy technologies. This vision is outlined in its comprehensive Critical Minerals Strategy 2023-2030.
As of December 2022, Australia has 81 major critical minerals projects operating within its territory, with an estimated value ranging from $30 billion to $42 billion. This represents a significant increase from 71 projects and $22 billion to $36 billion in 2021, highlighting this sector’s rapid expansion and potential.
Domestic industrial units capable of processing critical minerals are being set up throughout the different states to boost the mineral industry. Furthermore, the government is committed to developing the skills and workforce necessary to support the booming critical minerals sector.
U.S. and Japan Critical Mineral Agreement
On March 28, 2023, the United States and Japan signed a critical minerals agreement (CMA) focusing on five critical minerals vital for battery production in electric vehicles.
The primary aim of this agreement is to enhance and expand the supply chains of critical minerals while encouraging the widespread adoption of electric vehicle battery technologies. By formalizing their shared commitment, both parties intend to facilitate trade, foster fair competition under market-oriented conditions for critical minerals, uphold robust labor and environmental standards, and collaborate to ensure secure, sustainable, and equitable supply chains.
Mining critical minerals involves several key decisions involving economics, technological tradeoffs, and politics. Critical minerals are crucial for the sustainable future of humanity. Governments should introduce further subsidies for investors and invest in developing new equipment that ensures efficient mining with zero emissions.
Source: Azo Mining