Explainer: These six metals are key to a low-carbon future

Carbon Brief

The deployment of renewables and electric vehicles is expected to skyrocket as the world strives to reduce greenhouse gas emissions.

These low-carbon technologies currently rely on a handful of key metals, some of which have been little-used to date.

This raises questions over whether enough of these materials can be mined to ensure a large-scale rollout. Others are concerned that bottlenecks could appear, as metal output rises to meet demand, or that the environmental impacts of mining could undermine carbon savings elsewhere.

Carbon Brief takes a look at some of the metals attracting most attention and examines where they come from, the quantities available and whether they could pose risks to meeting the climate targets of the Paris Agreement.

Which metals are needed for low-carbon technology?

Clean energy technologies often rely on certain key metals which will be needed if they are to continue to expand. Two metals in particular, lithium and cobalt, have seen supply chain fears in recent years, although many other metals are used.

Lithium, a soft, silvery-white metal which is also the lightest in the periodic table, is a crucial ingredient of lithium-ion batteries. These are used in everything from smartphones to electric vehicles (EVs), now their biggest consumer. The lithium-ion battery is the battery of choice for most car makers, including Tesla, BMW, Ford and Nissan.

Cobalt, a silver-grey metal produced mainly as byproduct of copper and nickel mining, is another essential component of the cathode in lithium-ion batteries. It also has diverse uses in other industrial and military applications.

Nickel is another ingredient needed for batteries and is expected to form an ever-largerproportion of future batteries. Nickel is already widely used elsewhere, notably in stainless steel production, and mines are distributed among many different countries, meaning there is less concern over its supply.

Manganese is also used in batteries, as well as being an essential ingredient in steel and widely used elsewhere, such as in animal feed.

Copper is used as a conductor for wind power, as well as general wiring, motors and in coins. Both copper and manganese are among the most widely extracted metals in the world.

Rare-earth metals, also known as rare-earth elements (REEs), are a group of 17 chemically similar elements. Each has unique properties, making them important components for a range of technologies from low-energy lighting and catalytic converters to the magnets used in wind turbines, EVs and computer hard-drives.

Neodymium and praseodymium, known together as “NdPr”, which are used in the magnets of electric motors, have particularly been in the news lately, due to rising demand and prices.

Reports from both the US Department of Energy and the European Union have labelled REEs, cobalt and several others as critical materials, based on their importance to clean energy, high supply risk and lack of substitutes.

Many other metals are used to a larger or smaller extent in clean-energy production and low-carbon technology. Indium and gallium, for example, are used in the coatings of photovoltaic film and have also been identified by the EU report as critical materials.

A World Bank report released last year counted dozens of metals which could see a growing market with the rising use of wind, solar and batteries. The grid below, from the World Bank, shows the metals explored in its scenarios and their uses in different low-carbon technologies.

Of course, these metals will not only be used for low-carbon technologies, but everything from smartphones to weaponry.

In his 2016 book The Elements of Power, David S Abraham argued that what he calls “rare metals” – those, such as cobalt and REEs, produced in hundreds or thousands of tonnes per year rather than millions of tonnes, such as copper – are now the base of the world’s modern industries, including the clean-energy industry.

The world is fast becoming as dependent on these metals as it is on oil, he says. He writes:

“Today companies are using elements that scientists dismissed as mere impurities decades ago… We are now witnessing a fundamental shift in our resource demands. At no point in human history have we used more elements, in more combinations, and in increasingly refined amounts. Our ingenuity will soon outpace our materials supplies.”

How much of these metals will be needed?

It is widely acknowledge that a swift ramp up of low-carbon technologies will be needed in order for the world to meet the Paris Agreement’s goals of limiting warming to “well below 2C” and to strive for 1.5C.

This low-carbon future would see strong demand for a wide range of base and precious metals, the World Bank report said. Alongside the usual suspects of cobalt, lithium and REEs, this includes aluminum, silver, steel, nickel, lead and zinc. The report said:

“It would be reasonable to expect that all low-carbon energy systems are more likely than not to be more metal intensive than high-carbon systems.

In fact, all literature examining material and metals implications for supplying clean technologies agree strongly that building these technologies will result in considerably more material-intensive demand than would traditional fossil fuel mechanisms.”

A separate 2017 report from the UN Environment Programme (UNEP) had a similar finding. It calculated low-carbon technologies would need over 600 million tonnes (Mt) more metal resources up to 2050 in a 2C scenario, compared to a 6C scenario where fossil fuels use continues on its current path.

However, it also said the 2C scenario would save more than 200bn cubic metres of water a year and use nearly 150,000 square kilometres less land overall.

It is impossible to pin down the balance of technologies – and, thus, metals – which will be used over the next 30 years. But some analysts have warned that there could be a shortage of lithium and cobalt as the use of lithium-ion batteries in energy storage and EVs increases.

There are also fears over a “boom and bust” cycle developing for REEs, such as neodymium.

In order to assess the possibility of a shortage, it helps to look at availability estimates provided by the US Geological Society (USGS) of more than 100 minerals and metals, including many of the metals key for low-carbon technologies.

Cobalt

The USGS puts cobalt production in 2017 at 110 thousand tonnes (kt), with reserves of 7,100kt. This mean current extraction could continue for 65 years using current reserves. Cobalt consumption by the battery industry in 2016 was around 48kt, just over half of the total 94kt consumed for all products.

This consumption is expected to grow in the coming years. Metals supplier Darton Commodities has said it expects demand for batteries to reach 74kt per year by 2020.

Consultancy Wood Mackenzie forecasts growth to 98Kt per year by 2022. Similarly, Caspar Rawles, a market analyst at Benchmark Minerals Intelligence, said his firm considers it will more than double to 127kt per year by 2025. This would mean cobalt demand from batteries alone would exceed current production.

Research from commodities analyst CRU for Glencore, the world’s largest cobalt producer, has found that meeting the Clean Energy Ministerial target of 30m electric vehicle sales by 2030 would require 314kt of cobalt per year by 2030 – over three times 2017’s demand for all uses. At this rate, current reserves would last 23 years.

It is worth keeping in mind, though, that reserves are only a working inventory of how much of a mineral is thought to be economically extractable at the current time.

This is very different to the total potentially extractable “resource”. New supplies of minerals will come from resources which become extractable as technologies and prices change, as well as from currently undiscovered supplies and recycling.

The USGS notes that copper reserves, for example, were estimated at around 280,000kt in the 1970s, but are now estimated to be 790,000kt, even though 520,000kt of copper has been produced since.

The world has 25,000kt of identified terrestrial cobalt resources, more than three times current reserves. Some of these could become economic to mine if demand increases.

They are also rapidly expanding, almost doubling in the past five years from 15,000kt in 2012. The prospect of deep-sea mining of cobalt could reportedly open up over 120,000kt more (see below).

Lithium

For lithium, around 43kt were produced in 2017, according to the USGS, with 16,000kt of reserves. This means extraction at its current rate could continue for 372 years with current reserves.

Lithium demand is also expected to increase rapidly, however, driven by its use in batteries. Deutsche Bank thinks electric vehicles, electric bikes and energy storage will together account for 58% of lithium demand in 2025, up from 15% in 2015. Goldman Sachs expects total demand to quadruple by 2025.

Demand for lithium is relatively new, as is major exploration, and production has risen by 70% over the past 10 years. Reserves are also rising, increasing from 4,100kt in 2007to 16,000kt in 2017.

Identified resources have also risen from around 14,000kt in 2007to 53,000kt in 2017. Bloomberg New Energy Finance (BNEF) has found lithium supply for batteries is “just not an issue”.

Nickel

Demand for nickel in batteries is also expected to boom in the coming years. USGS data shows 2,100kt was produced last year, with 74,000kt of reserves.

Extraction of current reserves could continue for around 35 years at this rate, and around 70 years for all known land resources, although further nickel resources are found on the ocean floor.

While there has been less concern over nickel shortages than for lithium or cobalt, Wood Mackenzie has warned sourcing nickel for EV technology will be a challenge as most new supplies coming on stream up to 2025 will be types of nickel unsuitable for use in batteries.

Copper

Copper, meanwhile, is already produced in large quantities. The USGS says around 20,000kt was produced last year, dispersed among several countries. Current reserves would last 40 years at this extraction rate, although resources are far larger.

Low-carbon technologies are unlikely to be the only pressure on copper, although EVs and wind power do use large amounts of the metal compared to smartphones. One recent paper found total copper demand is likely to roughly quadruple by 2050.

Rare-earth elements

REEs such as neodymium are relatively abundant in the Earth’s crust, but difficult to find in concentrations that make them economic to mine. Extraction, which requires separating multiple different metals from a single deposit, is difficult and expensive.

Around 130kt of rare-earth oxide (REO) were produced in 2017, the USGS says. Reserves sat at 120,000kt, or 923 years of current supply. The USGS did not given an estimate for resources, though other research suggests these are rising rapidly.

Concerns over the supply of REEs tend to relate more to the concentration of production in China, rather than actual scarcity. However, resources are thought to be widespread, including in Europe, where most REEs were first discovered.

The World Bank report points out that intra-technology choices, such as the choice between onshore and offshore wind or between different types of solar PV, could affect metal demand as much as the scale of generation.

The demand for neodymium, for example, will be highly dependent on whether direct-drive wind turbines or geared models becomes more prevalent, it says.

Direct-drive technology, generally used for offshore wind, uses neodymium in its permanent magnets. Geared technology, meanwhile, largely used for the onshore turbines which currently makes up the bulk of installed wind power, does not use permanent magnets.

Demand for neodymium from wind will, therefore, be highly dependent on which of these technologies prevails and to what extent.

Where do metals for low-carbon tech come from?

Scaled-up deployment of low-carbon technology will mean that several countries find their natural resources in increasingly high demand.

The map below shows the location of current production and reserves of three key metals needed for this transition: cobalt, lithium and REEs. Resources for each are substantially larger, as noted above.

photo

As the top two maps show, the Democratic Republic of Congo (DRC) dominates the current production of cobalt. It supplied more than half (58%) of total production in 2017, and also has half of the world’s known terrestrial reserves. Russia, Australia and Canada also produce cobalt, although each represents less than 10% of world supplies. Australia also has significant reserves.

Meanwhile, countries with a portion of the world’s 25,000kt of terrestrial cobalt resources include the DRC, Zambia, Australia, Cuba, Canada, Russia and the US. US resources are estimated at 1,000kt, nine times world production in 2017, although most are not currently economically extractable.

Additionally, large cobalt resources equal to 1,000 years of current production have been identified on the floorbeds of the deep seas, largely outside territorial waters.

The high seas are also thought to be rich in other essential metals used in electronics, such as manganese and gold. Some firms are hoping to explore for these undersea materials, arguing it is a good alternative to terrestrial mining and its associated impacts on local populations and landscapes. But others fear deep-sea mining could also have significant environmental consequences.

Lithium occurs in small quantities throughout the Earth’s crust and seawater, but is produced by mining hard rock mineral deposits or extracting lithium salts where they are found in high enough concentrations in brine.

As the middle maps above show, Australia and Chile are the key current suppliers of lithium. Lithium reserves are slightly more widespread than cobalt, the largest being in Chile, China and Australia.

The so-called “lithium triangle” of Chile, Argentina, and Bolivia together boasts half of the world’s 53,000kt identified lithium resources, although Bolivia currently has little in the way of reserves. The US, which withholds its production data from the World Bank, is estimated to have lithium resources of 6,800kt, but limited reserves.

China is by far the dominant force in REEs, supplying 80% of the 130kt produced last year, the USGS figures show. More is likely produced off the books.

China holds around 44,000kt of rare earth reserves, around a third currently known reserves. It also dominates in the processing and supply chains of REEs. This has led some researchers to urge policymakers outside China to diversify their supply using new mining, which could take decades.

The only current major REE producer outside of China, Lynas, operates its Mount Weld mine in Australia. Brazil, Vietnam and Russia all have significant reserves.

The US, which has produced no REEs since its only mine filed for bankruptcy in 2015, has comparatively small reserves of 1,400kt. This is still equal to over 10 years of current worldwide production, however.

And other countries could catch up with China. Just this week, researchers concluded that vast REE deposits discovered in 2013 off the coast of Japan could meet global demand of some elements on a “semi-infinite” basis.

The spread of these so-called “strategic” metals, often in different places than those where fossil fuels are found, opens up interesting questions about how geopolitics will be affected by the rapid rise of clean technologies.

A new set of countries will find their natural resources increasingly in demand, with all the pros and cons which accompany this demand.

Some researchers have said an equivalent for renewables of the Organisation of the Petroleum Exporting Countries (OPEC) could be formed for these newly prominent material producers. Others argue that new international resource governance is needed to oversee responsible sourcing of minerals.

Do price rises mean the world is running short of key metals?

There have been concerns over the prices of metals needed for low-carbon technology, with the price of cobalt, lithium and even copper on the rise in recent years, as the chart below shows (note the date ranges differ on each of these graphs, due to data availability).

Source: Carbon Brief. Reproduced with permission.