The production of key minerals in the future will not depend solely on renewable energy

OPEC Secretary-General Haitham Al Ghais said on Monday that those who say key minerals will deliver a world future based solely on renewable energy and electric vehicles are not showing the full picture.

In an article published on the organization’s official website, Al Ghais spoke of multiple future energy paths for states and peoples around the world, acknowledging that “we all need to be realistic about how these can be achieved.”

Al Ghais said sustainable energy pathways are essential for populations around the world. However, he noted that “we need to appreciate the real-world impacts of scenarios and policies aimed at increasing renewable energy sources and electric vehicles (EVs). There are many elements that contribute to this, and one of them is the role played by critical minerals.”

At this point he mentioned the International Energy Agency (IEA), which, in its net zero emissions (NZE) scenario by 2050, predicts that demand for key minerals will quadruple by 2040.

“This is a pace never seen before in history,” Al Ghais wrote.

He noted that while minerals such as copper, cobalt, silicon, nickel, lithium, graphite and rare earth elements are the basis for the development of renewable energy sources and electric vehicles, OPEC member countries are investing significantly in renewable energy sources throughout their supply chains and are participating in the development of electric vehicles.

OPEC attaches importance to “the role of renewables and electrification in our energy future,” he said.

Al Ghais then asked a series of questions regarding the nature of such a large increase in demand for key minerals.

“Is this kind of expansion really feasible? What are the implications? How sustainable is it? And how important are oil and gas to the expansion of key minerals, as well as renewables, electric vehicles and the grid,” he asked.

In the IEA scenario, Al Ghais said that by 2040, demand for copper would increase by 50%, demand for rare earth metals would almost double, demand for cobalt would more than double and demand for nickel would almost triple.

“These aren’t the biggest increases either. Graphite demand will almost quadruple and lithium will increase almost nine-fold by 2040, underscoring its key role in batteries,” he noted.

OPEC’s Secretary General has confirmed that this will require the construction of a huge number of new mines.

“Already in 2022, the IEA stated that by 2030 alone, the world will need to build 50 new lithium mines, 60 new nickel mines and 17 cobalt mines,” he said.

He added: “It’s important to remember that historically, critical supply chain projects like these have had long lead times from discovery to first production.”

Here Al Ghais asked another question: is such growth realistic? And what might be the impact if the growth is insufficient, and, just as importantly, what if policymakers also went down the path of no longer investing in new oil and gas projects?

The Secretary-General said electric vehicles, wind turbines, solar panels as well as new energy grids need essential minerals.

“An electric vehicle contains about 200 kg of minerals,” he explained. “By comparison, a conventional car uses about 34 kg. One megawatt of electricity generated by an offshore wind turbine requires about 15 tons of minerals, while for solar power the figure is about seven tons. For natural gas it is just over a ton.”