Critical Minerals: Bottlenecks and Potential in Recycling

The global path to climate neutrality could be affected by supply bottlenecks in critical minerals, as a new report suggests. However, there is also hope: recycling strategies for these essential raw materials could provide relief. Over 70 countries have set climate neutrality goals or at least promised to reduce their emissions. Technologies needed for the expansion of renewable energies such as batteries, solar and wind power, nuclear energy, and hydrogen production depend on critical minerals. The "Critical Minerals 2024" report by GlobalData identifies 15 minerals as crucial for the energy transition. Among them, lithium, cobalt, copper, nickel, and rare earth elements are the most important. Concurrently, the report identifies four key risks to their supply. The rapid expansion of clean energy technologies, necessary for reducing carbon emissions, requires intensive raw material extraction. Bottlenecks threaten due to rising demand, resource monopolization, and geopolitical tensions. This poses the risk that mineral shortages could undermine international climate goals. Meanwhile, a new IEA report shows that recycling policies and urban mining initiatives could significantly mitigate potential supply bottlenecks. This is especially important as existing mines are under pressure and opening new mines often takes over a decade. According to GlobalData, such delays could slow the production of green technologies and jeopardize the achievement of emission targets. Critical minerals are often highly concentrated in certain regions, leading to volatile market dynamics that are susceptible to sudden changes in export quotas or production volumes.