Documents and Analysis

Energy transition - Renewable development and critical metal requirements

February 14, 2024

According to the Energy Transitions Committee, a think tank, the world will need 6.5 billion tons of metals by 2050, and not just lithium, cobalt and nickel, the metals that we talk about for batteries, but also steel, copper and aluminum. However, mining companies invest less. What is the importance of the mining industry in the energy transition? In view of this study, can net zero be reached by 2050?

To address the threats of climate change, the energy transition is necessary. Climate change is due to massive greenhouse gas emissions. The main greenhouse gases are CO2 and methane. CO2 emissions are mainly due to the combustion of fossil fuels (coal, oil, gas) and methane emissions are partly due to natural gas production

Our energy needs for transport, heating and electricity generation are over 80% covered by fossil fuels. Despite the development of electric vehicles, we use massive quantities of petrol and diesel for cars, trucks, buses. In countries like China or India electricity is produced mainly from coal. Natural gas is widely developed for heating or industry.

The replacement of fossil fuels with "carbon-free" energy is a priority. Currently there are three types of energy: hydroelectricity (which covers about 7% of our needs), nuclear energy (about 4% of our needs) and renewable energy (especially wind and solar) which currently covers about 7% of our needs. Wind and solar are in rapid development. Wind turbines and solar panels are increasingly present. But their necessary development raises a twofold question: can their share in the energy mix be sufficient to replace fossil fuels? What are the raw material needs to cope with this development?

What are the problems with metals, particularly in the construction of mining infrastructures?

The development of renewable energies (wind and solar) which is at the heart of the energy transition and which is essential to reduce fossil energy consumption and thus to combat climate change is based on the extraction and use of metals such as copper, nickel, aluminum, nickel, cobalt and rare earths. As Emmanuel Hache, economist and prospectivist at IFPEN, points out, if a thermal vehicle (fuel or diesel engine) requires 20 kilos of copper, an electric vehicle will require between 50 and 100 kilos of the same metal. Electric vehicle batteries also require large amounts of lithium and cobalt. Rare earths, with exotic names, are metals such as scandium, dyprosium, neodymium ... which are essential for the manufacture of permanent magnets present in wind turbines, as in electric vehicle engines

Critical metals and rare earths are unevenly distributed on the planet. Copper is produced mainly in Chile and the Democratic Republic of Congo (DRC). Nickel is present in a limited number of countries. Cobalt is mainly mined in the eastern Democratic Republic of the Congo. The exploitation of cobalt in the DRC is carried out under disastrous environmental and human conditions and the control of its exploitation leads to conflicts between the DRC and neighbouring countries.

While critical metals and rare earth resources are found in several countries, China has a dominant position in the processing and refining of these metals. China is ubiquitous in metal geopolitics and is the leader in refining aluminium, nickel, cobalt, copper, rare earths and lithium.

Few people want to work in the mining sector. Many mining companies risk closing their doors because they fail to recruit staff. How can we face this global challenge?

According to the International Energy Agency, which is a reference for its studies, a typical electric car requires six times more minerals than a conventional car and a terrestrial power plant requires nine times more mineral resources than a gas power plant.

In order to achieve the carbon neutrality targets set by the Paris Agreement in 2015 (COP 21), more metals would have to be extracted from the subsoil by 2050 than humanity has extracted from it since its inception.

The processing and refining of critical metals and rare earths, still very present in Western countries until the 1980s, has been largely transferred to China to limit environmental problems in Western countries and reduce costs.

The reverse trend, the return to Western countries, of the processing of these raw materials is a clear need for strategic resource control.

In conclusion, to meet the needs of the energy transition:

  • The development of wind and solar energy is necessary but will not be able to face the challenges
  • The extraction of huge quantities of metals and rare earths is indispensable but probably not enough to meet the needs
  • recycling of these raw materials should be a priority
  • the availability of these materials will be ensured by traditional market mechanisms. The prices of these materials react immediately, and strongly, to a change in supply/demand