The global shift towards clean energy is gaining momentum, driven by international commitments to cutting carbon emissions and meeting the Paris Climate Agreement targets. At the heart of this transformation are minerals, essential for building renewable energy technologies like solar panels, wind turbines, electric vehicles, energy storage systems, and electrolyzers. However, as demand for these critical resources soars, new challenges emerge—ranging from mineral security to environmental and social sustainability.
With the rapid acceleration of the clean energy transition, the demand for critical minerals is poised to soar. A clean energy-powered system operates very differently from one reliant on fossil fuels, with each technology requiring a distinct mix of mineral resources. Lithium, nickel, cobalt, manganese, and graphite are crucial for battery performance, longevity, and energy density. Rare earth elements are key to producing permanent magnets, which are indispensable for wind turbines and electric vehicle motors. Silicon is the core material used in manufacturing solar cells, while nuclear reactors rely on uranium and zirconium for power generation. Meanwhile, power grids consume vast amounts of copper and aluminum—especially copper, the backbone of all electricity systems.
Global Metal Production
The production of many essential metals is concentrated in just a few countries. According to the latest data from the International Energy Agency (IEA), three countries control over three-quarters of global output for lithium, cobalt, and rare earth elements. In some cases, a single country dominates nearly half of global production. For example, South Africa and the Democratic Republic of the Congo contribute around 70% of the world’s platinum and cobalt supply, respectively. Meanwhile, China accounted for more than 60% of rare earth element production in 2019—down from over 80% in the mid-2000s. Table 1 presents global metal production in 2020, based on data from the IEA.
Table 1: Overview of global metal production in 2020
Source: IEA
Global Metal Demand Outlook
The shift to a clean energy system is driving a sharp rise in metal demand, positioning the energy sector as a key player in global metals markets. Until the mid-2000s, the energy sector accounted for a small portion of the total demand for most metals. However, with the acceleration of the energy transition, clean energy technologies have become the fastest-growing segment of demand. According to the IEA, the need for metals in clean energy technologies is expected to increase fourfold by 2040. A faster transition to net-zero carbon by 2050 could require six times more metal inputs in 2040 compared to current levels, with the energy sector’s share of total demand soaring over the next two decades.
Under various climate action scenarios, metals used in electric vehicles and battery storage are emerging as a dominant force, with demand expected to grow at least thirty times by 2040. Lithium leads the surge, with demand projected to rise more than 40 times, followed by graphite, cobalt, and nickel (growing around 20 to 25-fold). The expansion of electricity grids will also push copper demand for grid lines to more than double over the same period. Today, power grids account for 70% of metal demand from energy technologies, but electric vehicles and energy storage stand out as the fastest-growing drivers. Table 2 presents the projected metals demand through 2040, based on data from the IEA.
Table 2: Projected metals demand to 2040
Source: IEA
This rapid increase in demand underscores the critical role of key minerals in the transition to clean energy. As the world shifts toward low-carbon technologies, securing a stable supply of these essential resources becomes increasingly important. Figure 1 highlights the primary minerals driving this transformation across various energy technologies.
Figure 1: Key Minerals for Energy Technologies
Source: IEA, World Energy Outlook Special Report, The Role of Critical Minerals in Clean Energy Transitions, 2021.
Securing Global Supply Chains
A successful energy transition depends on a stable, abundant, and cost-effective supply of essential minerals. Strengthening supply chains not only supports this transition but also enhances resilience. With demand for critical minerals rising, approximately 200 policies and regulations have been introduced worldwide to ensure sustainable and sufficient supplies. Key initiatives include the EU’s Critical Raw Materials Act, the US Inflation Reduction Act, Australia’s Critical Minerals Strategy, and Canada’s Critical Minerals Strategy. Additionally, supply constraints on critical minerals have eased, and private sector investment is growing—companies specializing in lithium development, for instance, have increased spending by 50%.
According to the 2021 World Energy Outlook Special Report, several countries play a key role at every stage of the minerals supply chain, and the shift to a clean energy system is reshaping global energy trade. Figure 2 illustrates the indicative supply chains for oil, gas, and clean energy technologies.
Figure 2: Indicative supply chains for oil, gas, and clean energy technologies
Source: IEA
The swift transition to clean energy technologies hinges primarily on the production and security of mineral supplies. Wind energy technologies lead in terms of mineral density, followed by solar photovoltaic technologies, particularly as annual capacity additions increase. In contrast, hydropower, biomass, and nuclear power contribute only minimally due to their relatively low mineral requirements and modest capacity additions.
Hydrogen adoption is growing rapidly in Southeast Asia, fueling increased demand for nickel and zirconium in electrolyzers, and copper and platinum for fuel cell electric vehicles. However, despite the rapid growth of fuel cell electric vehicles and the decline of gasoline and diesel car converters, platinum demand for internal combustion engine vehicles will still surpass that for fuel cell electric vehicles in Southeast Asia by 2040.
As Gulf countries transition to clean energy and green hydrogen, the demand for metals in energy storage technologies in the region is expected to increase more than 30 times from 2020 to 2040, with a significant rise in the demand for nickel, manganese, and cobalt. Table 3 presents the renewable energy capacity additions in 2024 for the world’s top 10 countries and Africa’s top 3.
Table 3: Renewable Energy Capacity Additions in 2024 for the Top 10 Global Countries and Top 3 African Countries (in Gigawatts)
Metal Prices Pose a Challenge to Battery Costs
Given that material costs account for a substantial portion of total battery costs, rising metal prices could significantly hinder efforts to meet industry cost targets. Metal costs make up approximately 50%-70% of battery production expenses. Over the past decade, the average cost of lithium-ion batteries has dropped considerably, reaching US$137 per kilowatt-hour in 2020. However, further reductions are necessary for electric vehicles to reach the target of US$125 per kilowatt-hour to remain competitive with internal combustion engine vehicles, and ultimately US$100 per kilowatt-hour by 2030. As a result, many automakers are ramping up battery production to drive further cost cuts.
The IEA’s forecasts warn that insufficient metal supplies could result in higher costs, delays, or reduced efficiency in the shift to clean energy. Given the urgent need to reduce emissions, this scenario is simply unaffordable for the world.
In conclusion, the transition to clean energy brings new challenges to energy security, with critical minerals playing a central role in all clean energy technologies, whether for production or storage. Given China’s dominance in global critical minerals, regional countries are striving to secure supply chains and strengthen partnerships with producers like Australia and South America.
For Egypt and the Middle East, this transition presents a significant opportunity to secure a global role in the supply chain and the development of sustainable energy technologies. However, success in this transition requires investments in infrastructure, bolstering local mining and manufacturing capabilities, tapping into regional mineral resources, and establishing energy technology manufacturing capabilities to reduce reliance on imports and achieve energy independence, while adapting to global shifts in demand for critical minerals.
