IEA to Launch Program to Secure Critical Minerals

The International Energy Agency (IEA) is launching a program aimed at securing the supply of critical minerals essential for energy security. This initiative comes as demand surges for minerals such as lithium, cobalt, and copper, crucial for producing electric vehicles (EVs), solar panels, and other energy transition-related technologies. 

At IEA’s 50th anniversary meeting, global leaders said that energy insecurity and climate change are immediate global realities. Leo Varadkar, Prime Minister of Ireland, noted the importance of working on shaping a secure and sustainable energy future for the world. 

Attendees acknowledged the importance of oil supply for the world’s energy reality and the role played by IEA’s oil stockholding system, which establishes that each IEA country must hold oil stocks equivalent to at least 90 days of net oil imports and be ready to collectively respond to reserve supply disruptions. 

Inspired by the results of the oil stockholding system, ministers instructed IEA to create a framework to further the goals of a voluntary IEA Critical Minerals Security Programme, aimed at enhancing the security of supply chains for essential minerals used in clean energy technologies. Fatih Birol, Executive Director, IEA added that one of the main challenges in supplying critical minerals is the high concentration of production in a few countries. “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,” says Birol. 

IEA has previously pointed out the high concentration of production of critical minerals. According to the organization's latest data, China dominates the production of rare earth minerals and graphite, accounting for 68% and 70% of global production, respectively. 

In the case of lithium, Australia leads as the world's largest producer, accounting for 47% of global production, followed by Chile with 26% and China with 17%. For cobalt, the Democratic Republic of Congo (DRC) is the dominant producer, accounting for 74% of global production. Additionally, Indonesia supplies over 49% of the world's nickel. Copper, however, is concentrated in three countries: Chile, the DRC, and Peru, with 24%, 10%, and 11% of global production, respectively.

While the production of minerals is concentrated in a few countries, China predominantly dominates their processing, accounting for more than 50% of processing in five out of six minerals. According to the IEA, China processes 42% of copper, 74% of cobalt, 65% of lithium, 100% of graphite, and 90% of rare earth minerals. The only mineral where China does not dominate is nickel, with a processing share of only 17%, while Indonesia processes 43% of it.

Mexico’s Role 

Mexico is the world’s largest silver producer and is among the Top 10 regarding the production of 17 minerals, being second in fluorite, third in wollastonite, fourth in celestite, sixth in zinc, eighth in salt and copper, and ninth in gold.  Similarly, the country holds unlocked potential for lithium extraction, as it has estimated resources of 1.7 million t. Although the country has fewer reserves than several Latin American countries, experts say that, if the deposits become economically viable, the country could become a key lithium producer, as reported by MBN.

Mexico also has mining potential for rare earth minerals, as these resources are located in Chihuahua, Coahuila, Zacatecas, Oaxaca, Guerrero, and Guanajuato. However, according to Raúl Garcia, President, CIMMGM, the reform of Mexico's Mining Law is hindering the country's potential to play a more significant role in the rare earth minerals market, similar to the situation with lithium.