The International Energy Agency is launching a program to secure the supply of minerals critical to energy security, as demand rises fast while manufacturing remains in the hands of a few key producers, its executive director said on Tuesday.
Fatih Birol said the production of electric cars, solar panels and other energy equipment requires a steady supply of minerals such as lithium, cobalt and copper.
The IEA continues to keep an eye on oil and gas markets, Birol said, but the supply chain of energy technologies is an important emerging security challenge.
“It is the reason we are embarking on a critical minerals security program,” he said in a speech.
“Currently, we are A, not able to keep up with the demand, and B, the ability of manufacturing these critical minerals is concentrated in one single country or two,” he said.
He did not give further details, but said the program was “inspired by our oil security mechanism”, which requires member countries to hold 90 days’ worth of oil stocks that can be released in the event of global supply disruptions.
China is the main producer for 30 out of 50 critical materials, according to a US Aerospace Industries Association paper last year, and is the world’s top miner and processor of rare earths.
The country last year imposed curbs on exports of gallium and germanium and types of graphite in an effort to protect its dominance in strategic metals.
The IEA’s move comes as countries escalate efforts to cut emissions, requiring ready supplies of critical minerals such as lithium, copper, nickel, cobalt, manganese and graphite used in batteries, and rare earth elements used in wind turbines and electric vehicles.
That new demand has stirred concerns about price volatility and security of supply, and the IEA has warned that even in an electrified, renewables-rich energy system, geopolitics remains a key consideration.
Last July, the agency published its inaugural Critical Minerals Market Review and hosted in September the first-ever international summit on critical minerals and their role in clean energy transitions.
(By America Hernandez and Geert De Clercq; Editing by Jan Harvey)
