Green economy
May 20, 2021 - 2 min

IEA recommends stockpiling of battery metal reserves

Concerns about the geographic concentration of its production

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The energy transition that the planet is undergoing will cause a profound change in the market for some metals and minerals, including copper and lithium, in whose production Chile has a preponderant weight, according to a recent report (https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions/executive-summary) of the International Energy Agency (IEA). The agency forecasts a sharp increase in demand for certain key minerals for the new energy sector. In the IEA's so-called stated policy scenario, which reflects the intentions and targets announced today, the energy sector's demand for lithium by 2040 will be 13 times higher than today's and for copper twice as high. In the sustainable development scenario, which implies a reinforcement of policies and investments in the field of clean energy, the demand for lithium by the energy sector in 2040 will be 42 times higher than in 2020 and for copper 3 times higher. These projections have important implications. The production of these minerals-and other critical minerals such as graphite, cobalt, nickel and rare earths-are heavily concentrated in a few producers, which will create significant supply chain risks. The agency recommends, among other things, that countries create strategic reserves of these raw materials, encourage investment in more geographically diversified production projects, promote research and innovation throughout the chain, and encourage the recycling industry for these materials.