Demand for critical minerals used in clean tech to triple by 2040

Rising demand for clean energy technologies to fight climate change is shaping the future with investments in critical minerals, whose demand is set to triple by 2040, according to the International Energy Agency's Global Critical Minerals Outlook report.

Increasing geopolitical competition led critical minerals to become not only an economic but also strategic priority to those seeking to strengthen their position in green energy.

Among the 4,000 minerals found across the globe, some are vital for the clean energy sector, such as lithium, nickel, cobalt, graphite, copper and rare earths. These all play key roles in green transformation and are mainly used in electric vehicle (EV), batteries, renewable energy projects and energy storage.

The long-term supply of critical minerals is key to ensuring the security of the energy system.

The International Energy Agency's report showed that the demand for critical minerals, including rare earth elements (REEs), will reach around 35 million tons annually by 2040.

Investments in critical minerals are expected to rise from $45 billion in 2023 to $800 billion by 2040.

Copper mining is among the most prominent critical minerals in investments, as its production is expected to generate $490 billion in investments by 2040, followed by nickel with $160 billion and lithium with $80 billion.

The global transition to clean energy has elevated critical minerals to a position of strategic importance as rising demand puts producing countries at more advantageous positions while prompting importer countries to develop their domestic production and processing capacity.

Countries increasingly turn to clean energy projects with the aim of reaching net zero emissions.

The report showed that some 28.1 million tons of raw materials were excavated worldwide in 2023 and 32.6 million tons of ores were processed. The world's mineral processing capacity is expected to rise 32% to 43.7 million tons by 2040.

The largest capacity increase is expected in graphite with 267.2% to 7.5 million tons, followed by lithium with 110% to 370,000 tons and REEs with 44.7% to 110,000 tons by 2040.

Clean energy will make up 55.2% of the global demand for lithium, nickel, cobalt, graphite and copper mines and 41% for REEs, according to the report.