What are the critical minerals for the energy transition – and where can they be found?

The transition to cleaner energy has put the spotlight on critical minerals and rare earth elements. These are essential for producing the carbon-free and low-carbon technologies that will enable us to move from fossil fuels to more sustainable alternatives. Critical minerals are in anything from battery storage and electric cars to wind turbines and solar panels, to name a few.

The International Energy Agency (IEA) forecasts that demand for critical minerals will need to triple by 2030 and quadruple by 2040 if we are to achieve net-zero emissions.

The hitch is that some of these minerals are very rare and currently concentrated in specific areas of the world, especially in China. Increasing demand, volatile prices, supply chain and geopolitical issues have put critical minerals and their rare earth cousins on political agendas the world over.

For example, the US government has just fast-tracked the permissions process for 10 mining projects in a push to boost critical minerals production at home. Similarly, the EU has struck 14 strategic partnerships with potential suppliers since 2021, including Canada and Ukraine, the latter before the start of the war.

What are the key critical minerals, and where do they come from?

Although definitions vary, there are a large number of critical minerals and rare earth elements that are important to the energy transition. Sometimes they are referred to as “critical materials”, extending to metals like aluminium and other substances.

The US Department of Energy lists a total of 50 critical minerals, while the European Union focuses on 34. The IEA’s list of the most widely used ones includes lithium, nickel, cobalt manganese and graphite, which are typically used in batteries. Aluminium and copper are vital for electricity networks, and rare earths are used for magnets in wind turbines and electric car motors.

Some, like platinum, iridium and palladium are among the rarest elements on Earth, while others like aluminium and silicon, are among the most abundant elements on Earth.

However, just because they are abundant does not mean they are easy to access. For example, while copper is not a rare element, the typical lead time for a new mine to start delivering copper to the market is about 20 years, according to the International Renewable Energy Agency (IRENA).

That’s why recycling will be a vital requirement for ensuring enough of those critical resources are available. The more of a material can be recycled, the less rare it is going to become. What is more, recycling will reduce the need to extract more and more from the ground.

However, IRENA has pointed out that as demand for critical minerals and materials has increased rapidly, current recycling technology and infrastructure are still lagging. Until recycling can play a bigger role, we still depend heavily on traditional extraction and the associated value chain. The question of where we source critical minerals therefore remains vital for securing future supply chains as demand grows.

The sources of many critical minerals and rare earths are highly concentrated. IRENA ranks gallium, a metal used in LEDs, mobile phones and solar panels, as the most concentrated material, with 95% of it coming from China. Copper is considered the least concentrated as it can be sourced from 56 countries, with Chile (28%) and Peru (10%) as the largest suppliers.

Here is a selection of critical minerals and where they can be found, based on information collated by Our World In Data.

Copper is used in cabling, wiring and transformers, as well as solar and wind power and battery storage, so its application spans a wide range of clean energy technologies. Commercially accessible reserves are geographically dispersed across Chile – which had one-fifth of the global total (2023) – Peru, Australia, the Democratic Republic of Congo and Russia.

The spread is similar for mining but when it comes to refining, China is the dominant producer in the world, providing just under half (44%) of the global total.

Often described as the “white gold” of the energy transition, lithium is a core part of lithium-ion batteries and therefore indispensable for electric vehicles and stationary batteries. Lithium is also key to the second-most widely used technology, lithium-ion phosphate (LFP) batteries.

While some innovators are exploring lithium-free chemistries, such as sodium-ion, only widespread future adoption of these would decrease the expected growth in lithium demand in the run-up to 2050.

Australia leads the global lithium production, contributing approximately 50% of the total output. Chile ranked second, accounting for a quarter, followed by China at 18%.

Lithium rock deposits make up the largest share of lithium extracted in Australia. In Chile, Argentina and Bolivia the metal is extracted from brine rich in lithium salt. All three countries lie within the “lithium triangle” in the Andes, where large reserves and untapped resources are found.

Nickel is a vital ingredient in the cathodes of lithium-ion batteries. How demand for nickel will evolve depends on the impact of alternative technologies such as LFP and sodium-ion batteries, which do not require nickel. However, nickel is used in wind and solar energy technologies as well as electrolyzers for producing green hydrogen.

In terms of nickel mining, Southeast Asia is a central hub, with Indonesia producing half of the global total. Other significant producers include the Philippines, New Caledonia, Russia, Canada and Australia.

Refined production is less geographically concentrated, with Indonesia in first place, producing just over a third, and China around one-quarter.

Indonesia also holds the largest known nickel reserves, possessing over 40% of the global total in 2023. Substantial reserves are also located in Australia and Brazil.

Cobalt is vital to a range of products and industries but for the energy transition, its main relevance comes from the fact that it is a critical element in lithium-ion batteries.

Like nickel, future cobalt demand hinges on how battery technology evolves, as both LFPs and sodium-ion batteries do not use cobalt.

Production-wise, most cobalt is mined in the Democratic Republic of Congo (DRC), accounting for nearly three-quarters of global output. Other significant producers include Indonesia, Russia and Australia. The DRC also holds just over half of the world’s known cobalt reserves, followed by Australia with about 15%. However, the title for the world’s largest refiner of cobalt goes to China, providing three-quarters of global refined cobalt.

A naturally occurring carbon found in pencils, graphite is also a key component of battery anodes, so it is vital to EVs and stationary batteries. It is also used in electrodes for electric arc furnaces, one of the go-to technologies for decarbonizing the steel sector.

China is the world’s largest producer of natural graphite, with more than three-quarters of the global total. Madagascar, Mozambique and Brazil follow with much smaller amounts mined. There are substantial reserves of graphite and they are less concentrated, with Brazil and China nearly on a par, followed by Mozambique and Madagascar.

Graphite can also be produced synthetically from fossil fuels, but the global warming potential is gauged to be two to more than three times higher than for natural graphite extraction.

Rare earth elements (REE) are a group of 17 metallic elements, including the metals of the lanthanides group, plus scandium and yttrium. While the amount of REEs used in products is often very small, they can be vital. One significant REE application is permanent magnets, without which wind turbines wouldn’t turn and EV motors would stand still. REEs occur frequently in the Earth’s crust but only in very small concentrations compared to metals such as iron, copper or gold.

China dominates REE production and reserves, with over two-thirds of the global total. Other key producers include the US, Myanmar and Australia. Reserves are less concentrated geographically, though China is still in the lead with 40%, followed by Viet Nam and Brazil with around 20% each.

As the energy transition progresses and grows in scale, it will be crucial for global decarbonization to secure adequate supplies of critical minerals and REEs. A white paper from the World Economic Forum and McKinsey has mapped out how the critical minerals value chain can be developed.

The paper, Securing Minerals for the Energy Transition: Unlocking the Value Chain through Policy, Investment and Innovation, points to policy, investment and innovation as key to boosting supplies. This includes opening new mines and refineries, for example across Africa, as well as decreasing demand by using less or finding substitutes.

However, vital to all these strands of activity will be collaborative action. Whether it’s harmonizing ESG standards, encouraging trade and cooperation, or fostering public-private cooperation to reduce commercial risk, the energy transition depends on a globalized effort.