Crit part 2

Executive summary- Critical minerals Africa

1. Market Developments in 2023

• Price Declines in Battery Materials

  • Lithium spot prices decreased by 75%.

  • Cobalt, nickel, and graphite prices fell by 30-45%.

  • The IEA Energy Transition Mineral Price Index tripled post-January 2020 but lost most gains by end of 2023, with copper prices remaining elevated.

• Demand Growth for Critical Minerals

  • Lithium demand increased by 30%.

  • Nickel, cobalt, graphite, and rare earth elements saw demand rises between 8% to 15%.

  • Clean energy applications became the primary driver of this demand growth.

  • Electric vehicles (EVs) became the largest consumers of lithium and significantly increased their share in nickel, cobalt, and graphite demand.

2. Outlook for Key Energy Transition Minerals

• Projected Demand Growth by 2030

  • In the Stated Policies Scenario (STEPS) and Announced Pledges Scenario (APS), mineral demand for clean energy technologies is expected to double.

  • In the Net Zero Emissions by 2050 (NZE) Scenario, demand is projected to nearly triple.

• Specific Mineral Demand Projections by 2040 (NZE Scenario)

  • Copper: Demand increases by 50%.

  • Nickel, Cobalt, Rare Earth Elements: Demand doubles.

  • Graphite: Demand quadruples.

  • Lithium: Demand grows eightfold.

• Market Value Projections

  • Combined market value of key energy transition minerals is set to more than double by 2040, reaching USD 770 billion in the NZE Scenario.

  • Copper: Maintains the largest market value at USD 330 billion.

  • Lithium: Expands to USD 230 billion, becoming the second-largest market.

  • Nickel: Follows as the third-largest market.

  • Graphite: Undergoes almost sixfold growth over the period to 2040.

3. Supply Considerations and Investment Needs

• Supply Expansion

  • Substantial investments have been made, with numerous projects announced, indicating an expansion in expected supply volumes in the coming years.

  • For minerals like cobalt, nickel, and rare earth elements, expected supply by 2035 aligns more closely with projected demand in the APS, especially if high production scenarios materialize.

• Investment Requirements

  • Mining: Approximately USD 590 billion is required in new capital investments between now and 2040 in the APS.

  • In the NZE Scenario, total capital requirements are about 30% higher, nearing USD 800 billion over the same period.

  • Copper Mining: Capital requirements to 2040 are USD 330 billion in the APS and USD 490 billion in the NZE Scenario.

4. Role of Technology and Recycling

• Technological Advances

  • Reductions in the use of materials like silver and silicon in solar cells have facilitated increased deployment of solar PV.

  • Adoption of alternative battery chemistries, such as lithium-iron phosphate and sodium-ion batteries, could reduce mineral demand for EV batteries by around 13% in 2030 and 18% in 2050 compared to the NZE Scenario’s base case.

• Recycling Impact

  • Combining smaller EV battery sizes, alternative chemistries, and recycling could reduce lithium demand by 25% in 2030 in the NZE Scenario, saving an amount similar to today’s production volumes.

  • Even with these reductions, new supplies would need to grow by 20% per year between today and 2030, a growth rate the lithium industry has managed in recent years.