Critical Materials for the Energy Transition

* Report: Critical Materials for the Transition to a 100% Sustainable Energy Future. Ecofys, 2014.

URL = https://awsassets.panda.org/downloads/critical_materials_report___jan_2014_lr.pdf

Discussion

Nafeez Ahmed:

"Rare earth elements are another area where it’s commonly believed that mineral production bottlenecks could derail the emergence of a global clean energy system. But once again, the relevant challenges have been overblown.

In 2014, the World Wildlife Fund commissioned Ecofys, the leading Dutch energy consultancy, to explore supply risks for critical materials. Their report, Critical Materials for the Transition to a 100% Sustainable Energy Future, found that minerals like indium, gallium and tellurium used for solar panels would not pose bottlenecks due to easy substitutability with other abundant materials like silicon. As for rare earth elements like neodymium and yttrium used in wind turbines, their supply is mostly projected to exceed demand. And while supplies of lithium and cobalt could theoretically pose supply challenges, the report said, these can be solved through recycling, substituting lithium in other sectors, and substituting for cobalt in cathodes. Nickel and cobalt are not used in lithium-iron-phosphate batteries, for instance.

Bottlenecks that might emerge are therefore not geological, but rather geopolitical and economic. China, for instance, is not actually rich in lithium, cobalt or nickel, but procures these metals and refines them internally, a process it heavily subsidizes to keep costs low. That’s why although the world’s largest lithium mining company is based in southern China, all its resources are held in Australia, Argentina and Mexico. There is therefore ample scope for other countries to ramp up mining activities and challenge China’s current market monopoly.

Writing in the Bulletin of Atomic Scientists, physicist Amory Lovins, chief scientist at the Rocky Mountain Institute, explains how ‘rare earths’ are not actually rare, but available in abundance though not always in concentrated form. In 2010, many analysts mistakenly predicted that soaring prices signalled a coming rare earth supply shortage. What actually happened is that following the price rises, “stockpiles rose, idle mines reopened, explorers sought and found new deposits, and recycling increased.” Companies simultaneously sought to cut costs and boost performance, using costlier materials more frugally and substituting them with cheaper and better solutions where possible. The result was that prices crashed as supplies became abundant. As such, Lovins concluded, they “are very unlikely to shift the world’s strategic balance or create resource crises.”

Lovins’ analysis speaks to the fact that many who see critical minerals as a scarce resource are confusing the economics of commodity cycles with geological scarcity, as one study in the journal Energy Research & Social Science points out. Rising prices of minerals due to coming demand increases will increase revenues, make recycling more affordable, and generate new markets for novel circular economy practices and industries which previously would have been less feasible. It will also drive further innovation.

In many cases, rare earths can be substituted out completely simply by better design principles. Some EVs and wind turbines might well use motors and generators relying on supermagnets that require rare earth elements like neodymium, but as Lovins says: “Everything that such permanent-magnet rotating machines do can also be done as well or better by two other kinds of motors that have no magnets but instead apply modern control software and power electronics made of silicon, the most abundant solid element on Earth.”

Current recycling rates for critical metals are at below 1%, with some rare earth elements not being recycled at all. This means that the potential for recycling is vast.

According to a recent study released in April 2021 by the Sydney University of Technology’s Institute for Sustainable Futures, the IEA’s assessment of how critical materials recycling could alleviate demand for new mining is far too conservative. The study finds that demand for nickel, cobalt, lithium, and copper for EV batteries could be reduced by as much as 55% through increased recycling.

There is therefore no serious evidence that the clean energy disruption will face any insurmountable obstacles from minerals or raw materials bottlenecks. To the contrary, as we will see in Part 2, a new global clean energy system can overcome materials bottlenecks by sustaining recycling and circular economy practices – along with the instalment of new solar, wind power and battery (SWB) systems – without new fossil fuel inputs. And even that is only the beginning of what will be possible."

(https://www.rethinkx.com/blog/part-1-the-mythology-of-mineral-shortages)