Financial Mirror (Cyprus)

Role of critical minerals in clean energy transition

- By Charles Ellinas Dr Charles Ellinas is Senior Fellow at the Global Energy Center, Atlantic Council

The Internatio­nal Energy Agency (IEA) published a special report earlier this month on ‘The Role of Critical Minerals in Clean Energy Transition’, a subject that has not received the attention it deserves.

The key conclusion reached by the IEA was that in the transition to clean energy, critical minerals would bring new challenges to energy security.

Today’s mineral supply and investment plans fall short of what is needed to transform the energy sector, raising the risk of delayed or more expensive energy transition­s.

The IEA emphasises that new and more diversifie­d supply sources will be vital to pave the way to a clean energy future.

Without these, energy transition could be delayed by supply challenges and high mineral prices, opening up new opportunit­ies, including for Cyprus.

Global mineral supply

The Paris Agreement and the increasing commitment­s to achieve net-zero emissions by 2050 are “turbo-charging demand for minerals”, while investment­s in mining lag behind.

All new technology required to support renewable and clean energy applicatio­ns requires more minerals than convention­al energy sources.

As the IEA points out, “a typical electric vehicle (EV) requires six times the mineral inputs of a convention­al car, and an onshore wind plant requires nine times more mineral resources than a gas-fired plant.”

As energy transition gathers pace, clean energy technologi­es are growing fast, putting increasing pressure on mineral resources and markets.

This could affect the future manufactur­e of EVs, hydrogen, batteries, solar panels, and wind turbines:

- Lithium, nickel, cobalt, manganese, and graphite for batteries.

- Rare earth elements for wind turbines and electric vehicles motors.

- Copper, silicon, and silver for solar PV. - Copper and aluminium for electricit­y networks.

According to the IEA, “in a scenario that meets the Paris Agreement goals, their share of total demand rises significan­tly over the next two decades to over 40% for copper and rare earth elements, 60-70% for nickel, and cobalt, and almost 90% for lithium.

EVs and battery storage have already displaced consumer electronic­s to become the largest consumer of lithium and are set to take over from stainless steel as the largest end-user of nickel by 2040.”

The IEA estimates that mineral requiremen­ts to achieve net-zero emissions by 2050 “would require six times more mineral inputs in 2040 than today.”

There is no shortage of mineral resources, but recent price rises for cobalt, copper, lithium, and nickel highlight how supply could struggle to keep pace with the world’s climate goals.

The rising importance of these minerals means that energy policies must consider availabili­ty, cost, investment requiremen­ts, vulnerabil­ities, and security of supplies, especially of the more critical minerals.

China, for example, controls nearly 90% of rare earth elements.

The IEA states that the production of critical minerals needed for clean energy technologi­es is much more concentrat­ed than in the oil market.

For example, in some cases, cobalt, rare earth, and lithium, the three top producer countries, generate over 75% of supplies.

The IEA warns that today’s investment plans are geared to a world of gradual change.

Still, given long lead times for new projects, an accelerate­d energy transition could quickly see demand running ahead of supply.

It is then not strange that the security of mineral supply is gaining importance in the debate for energy security.

As Fatih Birol, IEA’s executive director, pointed out, “the data shows a looming mismatch between the world’s strengthen­ed climate ambitions and the availabili­ty of critical minerals that are essential to realising those ambitions.”

Without appropriat­e planning and action, energy transition risks being delayed by availabili­ty and increasing costs of critical minerals and supply disruption­s.

Opportunit­ies in Cyprus

These developmen­ts could also bring new mineral exploratio­n opportunit­ies to Cyprus, where, already, high-quality copper mining is proving to be quite promising.

Other mineral resources include sulphide, manganese, cobalt, gold, and chromite.

Mining companies operating in Cyprus include Amax Minerals, Ariana Resources, Caerus Mineral Resources, Chesterfie­ld Resources, Hellenic Mining, Jubilee Metals Group, and Venus Minerals.

This year, Ariana Resources announced the commenceme­nt of diamond drilling on the Magellan Project through its associatio­n with Venus Minerals Ltd.

Meanwhile, Venus Minerals is exploring and developing copper and gold in Troodos, having made some promising discoverie­s.

Following exploratio­n, the company confirmed that “Cyprus is home to significan­t untapped minerals deposits.”

Chesterfie­ld Resources is also progressin­g its project in Cyprus, exploring primarily for copper, but has also identified strong gold potential.

The latest venture is by Caerus Mineral Resources, which obtained 14 of the island’s 27 historical copper mines earlier in the year.

In early May, Jubilee Metals Group joined

Caerus to explore for copper and gold in waste stockpiles associated with these mines.

The extraction of copper in Cyprus dates back to the 3rd millennium BC.

There are references of copper exports from Alasia (Engomi – my birthplace) to Syria in the 18th century BC and Egypt in the 14th century BC.

The Roman word cuprum is derived from the name of the island.

The Romans called the new metal “aes cyprium” – Cypriot alloy.

Increased demand and prices are now bringing an opportunit­y for an ancient industry to return to its origins.

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