Much of the developed world is undergoing an energy transition from fossil fuels to renewable and technology-based natural energy sources. To date, 96 countries representing almost 80 percent of carbon emissions have made net-zero pledges. Besides a massive investment in renewable energy sources and an increase in overall power production, the transition from fossil fuels will require a huge increase in raw materials. The need for Rare Earth Elements (REEs) and Lithium has already received some media attention, but there will also need to be a significant increase in basic mineral and metal extraction for the energy transition to work. 

Humans have been mining for thousands of years, as extracting resources from the Earth is crucial for our survival. Various minerals and metals are simply required for our modern society to function, and our needs keep growing. A World Bank study found that demand for 17 common minerals integral for the energy transition will increase dramatically. Solar and wind energy are the most popular renewable energy sources, and both require a large amount of natural resources.  

The mineral investment in renewable energy sources is much higher than coal or natural gas power. According to the IEA, it takes over 14,330 pounds of minerals per MW of solar energy, compared to 5,511 pounds/MW for coal power and 2,425 pounds/MW for natural gas. Wind power is even more resource intensive, requiring over 22,046 pounds/MW for onshore wind and over 33,069 pounds/MW for offshore.  

Dozens of nations have made pledges to reduce emissions in the face of climate change, but energy is not the only obstacle. Oil demand for road transport is projected to peak in 2027, as more people transition to electric vehicles. Electric cars are useful for lowering tailpipe emissions but are another clean energy technology that requires more minerals. The average electric vehicle requires over 440 pounds of special minerals, much of it used for the large battery, while the conventional petroleum car requires just 75 pounds per vehicle.  

The need for metal recycling has increased to offset the increasing demand for metal, but it won’t be enough. Currently, the vast majority of used solar panels and wind turbines end up in landfills, but much of the material can be recycled. Recycling renewable energy components – if economically viable – would be especially beneficial because of the extremely high material cost. Rules for more efficient recycling of metal components that contain REEs may be on the horizon as well. Still, even with a massive increase in recycling efforts, recycling will not be enough for most metals.  

Many different minerals are required for renewable technologies, and almost all of them will require an increase in production to meet demand. For example, the average Electric Vehicle requires 146 pounds of Graphite. The worldwide electric vehicle fleet is expected to reach around 700 million vehicles in 2040, and in 2022 the global extraction of graphite was 1.3 million metric tons. That 1.3 million metric tons of graphite translates into 19.5 million EVs. Without an increase in extraction, the world could only make 331 million EVs by 2040, and that is assuming all the graphite is used for cars, and all the cars stay on the road until 2040. To meet electric car demand alone, the world needs an average of 2.73 million metric tons of graphite per year, over double the current production. Currently, only a fraction of the total graphite production is used for batteries, with other uses including steelmaking, foundries, refractories, headphones, and pencils.  

Graphite isn’t the only one, even more common minerals like Zinc, Nickel, Copper, Cobalt, and Silicon will need extraction to increase to keep up with demand. The IMF predicts that in a net-zero emissions scenario, there will be substantial supply shortages for dozens of minerals and metals. The only metal they listed as without a future supply shortage was lead. A delay in production responding to demand could derail the entire schedule for a planned net-zero emissions world.  

The U.S. is heavily dependent on foreign sources of minerals. China in particular controls massive amounts of critical mining resources, as the U.S. has been hesitant to expand mining production in recent years due to environmental concerns and activist lawsuits. Coupled with a long and difficult process to open a domestic mine, few new mines have opened in the last few years. As mentioned before in a previous blog, opening a new mine takes five times as long in the U.S. as in Canada or Australia. Many environmentalists fail to realize that the transition to a more sustainable future requires actions that are harmful to the environment. Mining in the U.S. occurs under strict regulations and is far less environmentally harmful than foreign mines.  

A limited supply of just one of these crucial minerals could spell disaster not only for the clean energy transition but the global economy. China is the global leader in the mining of minerals needed for advanced technology and renewable energy. Additionally, many minerals not mined in China are sent there for refining because the international market can’t compete. China refines more than 60 percent of the world’s cobalt, more than 50 percent of Lithium, and over 80 percent of the REEs. The U.S. is aware of its vulnerable dependence on China, but little action has been taken so far. Other vital minerals come from unstable countries such as the Democratic Republic of the Congo, which supplies 70 percent of the world’s cobalt, and Russia, which is the global leader in palladium.   

Investors and governments are beginning to recognize that mineral demand could be the limiting factor of the green energy transition. The U.S. is already uncomfortable with its reliance on China for minerals and could be the driving force for change, regardless of green energy. Innovators are working on recycling technologies and developing new techniques, such as extracting metals from magma brine and more environmentally friendly mining. Still, an expansion in traditional mining production is required for a renewable energy transition and a technology driven economy.  

Some environmentalists may not like the idea of an expansion in mining, but mineral supply could become the bottleneck for a more sustainable future. Developing a secure domestic mineral extraction and refining process would be enormously beneficial to the economy and the long-term health of the environment but requires government action and investment to begin.  


Written by Owen Rogers, Public Policy Intern


The Alliance for Innovation and Infrastructure (Aii) is an independent, national research and educational organization. An innovative think tank, Aii explores the intersection of economics, law, and public policy in the areas of climate, damage prevention, energy, infrastructure, innovation, technology, and transportation.