Report on Critical Minerals and Energy Security in the Context of Sustainable Development Goals (SDGs)

Introduction

The global energy system is undergoing a rapid transformation, necessitating an evolved understanding of energy security. While traditional fuels such as oil, gas, and coal remain focal points for governments, emerging vulnerabilities related to critical minerals are becoming increasingly significant. This report emphasizes the importance of critical minerals within the framework of the United Nations Sustainable Development Goals (SDGs), particularly SDG 7 (Affordable and Clean Energy), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 12 (Responsible Consumption and Production).

Critical Minerals and Their Role in Clean Energy Technologies

Critical minerals are essential components for clean energy technologies and other strategic sectors including electronics, defense, and aerospace. Key points include:

1. Rare earth elements are vital for wind turbines, electric vehicles (EVs), robotics, and drones.
2. Minerals such as zirconium and boron are crucial for nuclear power and jet engine manufacturing.

These minerals directly contribute to the achievement of SDG 7 by enabling renewable energy technologies and sustainable transport solutions.

Geographical Concentration and Market Risks

Concerns have intensified regarding the geographical concentration of supply and processing of critical minerals. The International Energy Agency (IEA) highlights the following challenges:

• High market concentration with the top three producers controlling nearly 90% of the market for six major energy-related minerals: copper, lithium, nickel, cobalt, graphite, and rare earths.
• Since the IEA’s 2021 report, market concentration has deepened, posing risks to supply security.
• China dominates mineral refining, leading in 19 out of 20 strategic minerals with an average 70% market share, often implementing export controls.

This concentration challenges SDG 9 by limiting industrial diversification and innovation globally.

Supply and Demand Dynamics

The IEA projects significant supply and demand imbalances over the next decade:

• Lithium demand increased by nearly 30% in 2024, surpassing the previous decade’s growth rate.
• Copper supply is projected to face a 30% deficit by 2035 due to expanding electricity networks worldwide.
• Supply growth for battery metals has doubled since 2020, led by China, Indonesia, and African countries, resulting in downward price pressure.

These dynamics impact SDG 12 by influencing sustainable resource management and consumption patterns.

Investment and Exploration Trends

Investment momentum in critical minerals has slowed:

1. Spending growth declined to 5% in 2024 from 14% in 2023.
2. Exploration activity plateaued, interrupting a growth trend since 2020.
3. Start-up funding for mineral projects shows signs of deceleration.

This slowdown threatens future supply security and the achievement of SDG 8 (Decent Work and Economic Growth) by potentially limiting job creation in mining and related sectors.

Policy Recommendations and Technological Innovations

To address these challenges, the following measures are recommended:

• International Cooperation and Policy Support: Implement price-stabilization mechanisms, demand guarantees, and environmental incentives to reduce capital costs and encourage new supply projects.
• Technological Advancements: Utilize AI-driven geological analysis to reduce drilling costs by up to 60% and increase discovery success rates fourfold.
• Strategic Partnerships: Promote cleaner production methods, such as incentivizing sustainable nickel production to reduce global market concentration by 7% within ten years.

These actions align with SDG 17 (Partnerships for the Goals) by fostering collaboration between governments, industry, and technology sectors.

Conclusion

The IEA continues to enhance monitoring, project support, and resilience-building efforts in critical mineral markets. However, market forces alone are insufficient to achieve the necessary diversification and security. Urgent and coordinated action by governments and industry stakeholders is essential to secure the foundations of the future energy system and advance the Sustainable Development Goals.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 7: Affordable and Clean Energy
   • The article discusses the transformation of the world’s energy system and the importance of securing minerals essential for clean energy technologies such as solar panels and electric vehicles.
2. SDG 9: Industry, Innovation, and Infrastructure
   • Focus on critical minerals for industries like electronics, aerospace, and defence, and the role of technology such as AI in improving mineral discovery and processing.
3. SDG 12: Responsible Consumption and Production
   • Concerns about supply chain concentration, export controls, and the need for sustainable investment and environmental incentives.
4. SDG 13: Climate Action
   • Transition to clean energy technologies and reducing reliance on fossil fuels to mitigate climate change impacts.
5. SDG 17: Partnerships for the Goals
   • Emphasis on international cooperation, strategic partnerships, and policy support to secure supply chains and diversify mineral sources.

2. Specific Targets Under Those SDGs

1. SDG 7
   • Target 7.2: Increase substantially the share of renewable energy in the global energy mix.
   • Target 7.a: Enhance international cooperation to facilitate access to clean energy research and technology.
2. SDG 9
   • Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency.
   • Target 9.b: Support domestic technology development, research, and innovation.
3. SDG 12
   • Target 12.2: Achieve sustainable management and efficient use of natural resources.
   • Target 12.5: Substantially reduce waste generation through prevention, reduction, recycling, and reuse.
4. SDG 13
   • Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
5. SDG 17
   • Target 17.6: Enhance North-South, South-South, and triangular regional and international cooperation on and access to science, technology, and innovation.
   • Target 17.7: Promote the development, transfer, dissemination, and diffusion of environmentally sound technologies.

3. Indicators Mentioned or Implied to Measure Progress

1. Market Share Concentration of Critical Minerals
   • Indicator related to the average market share of the top producers of critical minerals (e.g., top three producers holding nearly 90% market share).
2. Demand Growth Rates for Minerals
   • Indicators measuring annual growth rates in demand for lithium (nearly 30% in 2024) and other battery metals.
3. Supply Deficit Projections
   • Projected supply deficits, such as the 30% copper supply deficit by 2035, indicating supply-demand balance.
4. Investment Growth Rates
   • Indicators on investment spending growth in critical minerals (5% growth in 2024, down from 14% in 2023).
5. Technological Efficiency Improvements
   • Measures of cost reduction and success rates in mineral exploration due to AI-driven geological analysis (e.g., 60% cost reduction, quadruple discovery success rates).
6. Geographical Diversification of Supply
   • Indicators on diversification of supply sources and refining capacity, including China’s dominant market share (70%) in refining strategic minerals.

4. Table of SDGs, Targets, and Indicators

Source: intellinews.com