Exploring Critical Minerals in the Energy Transition

Exploring Critical Minerals in the Energy Transition

The conversation focused on key issues associated with critical metals required for the global energy transition. Ensuring the supply of critical minerals (such as copper, nickel, lithium, and graphite) are essential for decarbonization. Below are some of the key points discussed by the panel.

1. Geopolitical considerations & Government’s Role: the importance of international cooperation for the energy transition given decarbonization is a global challenge, was raised. Australia’s critical minerals cooperation partnership with Japan was raised as an example. Large investments in critical minerals are government-enabled but private-sector-led, with governments enforcing compliance with milestones, including community and environmental impact. Corporations need Governments to provide predictable and stable regulatory frameworks, including fiscal settings and streamlined permitting processes. They also seek harmonized standards across countries to improve competitiveness. Capital markets also play a crucial role in supporting investments in critical mineral production, as governments and corporations alone cannot meet the financial demands.
2. Challenges in Mining and Innovation: There is a need for more critical minerals, and shortages may occur if new mines are not developed. However, many technologies that utilise these minerals are still innovating, making it hard to predict exact needs. Permitting delays (which can be as long as 18 years!) are a major hurdle for new mines, requiring a focus on streamlining processes and promoting recycling to reduce dependence on new mining.
3. Recycling and Circularity: The importance of recycling as a promising solution for managing demand, and even managing energy independence, was discussed, with new recycling facilities being developed in both the U.S and Australia. The conversation highlighted the importance of getting recycling right at the dawn of this new industry, contrasting it with the mistakes made in managing plastic waste. The potential to properly recycle minerals like batteries could significantly reduce environmental impact. For some materials, like aluminium, recycling is already successful. Recycling was described as a kind of “urban mining” for materials like nickel, lithium, and graphite – particularly from electronic waste (including electric vehicle batteries). Current recycling rates for lithium-ion batteries are low (around 5%) in the US, but there are initiatives like placing collection points in public places (e.g., stores, stadiums) to improve this.
4. Stockpiling and Defence: The idea of stockpiling critical minerals to mitigate supply risks – a type of ‘critical minerals reserve’ was discussed – including for defence purposes. However, stockpiling minerals is less straightforward than stockpiling other products, like petroleum. The variety of critical minerals, and the on-going technical innovations make it difficult to estimate even which minerals are needed and in what quantities. Nevertheless, physical stockpiling and financial instruments like debt and equity arrangements are two key strategies.
5. Environmental and Regulatory Challenges: The speakers acknowledged that permitting and environmental reviews for mining projects take a long time, due to the complexity of evaluating impacts on water bodies, wildlife, and local communities. Efforts are underway to streamline these processes, but the balance between swift approval and environmental protection remains challenging.
6. Community Impact and Sustainability: Governments and companies are seeking to ensure that mining projects create long-term socioeconomic benefits for communities. In the U.S., companies seeking funding must present community benefit plans to demonstrate sustainable and responsible practices, ensuring that investments lead to positive outcomes beyond short-term gains.
7. Indigenous Engagement: In Australia, there is a strong emphasis on involving Indigenous communities early in the project development process. The government is looking at improving cultural heritage policies to ensure fair economic benefits for traditional landowners.