Note from the CEO

Sufficient access to critical minerals and metals will be critical in order to achieve the required speed and the scope of the energy transition. Some voices even describe lithium as the new oil. Opinions differ when it comes to whether such access to critical minerals is within reach. Will we be able to feed the energy transition from molecules to electrons? In Rystad Energy, we think the answer is yes.

Sufficient access to critical minerals and metals will be critical in order to achieve the required speed and the scope of the energy transition. Some voices even describe lithium as the new oil. Opinions differ when it comes to whether such access to critical minerals is within reach. Will we be able to feed the energy transition from molecules to electrons? In Rystad Energy, we think the answer is yes.

And to what extent are supply chain issues and bottlenecks causing cost inflation in the new energy value chains?

Let’s take a minute to dwell on some of the different views. Although the mining of minerals occurs in different parts of the world, subject to varying degrees of geopolitical risk, the recent IRENA report on materials points to the fact that the picture changes significantly when it comes to processing minerals. China currently accounts for 100% of the refined supply of natural graphite and dysprosium (a rare earth element), 70% of cobalt, and almost 60% of lithium and manganese.

Moreover, as the world’s energy systems gradually transition from molecules to electrons, demand for global critical materials will grow materially. This in turn triggers uncertainties about the supply of metals, which some fear can slow the energy transition. While OPEC self-regulates oil supply, there is no OCMPC (Organization of Critical Metals Producing Countries). As stated, the mining and processing of critical metals are very concentrated, creating supply chain worries. This situation poses several key questions: Can the world increase the production of critical minerals sufficiently to meet rising demand? Will a shortage of copper slam the brakes on the energy transition? Does it really take 16 years for a new mine to become operational? And is it true, as some claim, that current investments in mining for critical metals are at only 10% of the levels required in order to get the job done?

The material-related technologies to supply the energy transition are in place. The resources are in place. Will we see players and countries taking the necessary steps and investments to feed the growth? We remain optimistic. We believe players in this space will push the “pedal to the metal” as needed.

In the upcoming Rystad Talks Energy on 31 August, we will get the latest Rystad Energy updates on the energy supply chain. We will also hear it from the industry, as we are fortunate to have Stephen Bull, EVP Strategy, Portfolio & Sustainability at Aker Solutions joining the discussion. Why does he define the offshore wind model as almost broken? Can this be fixed?

We are honored to also be joined by the Norwegian Minister of Petroleum & Energy, Terje Aasland, for the virtual opening of our annual flagship series of events, the 2023 Rystad Energy Week broadcast on 7 September, in addition to Mark Mills, Senior Fellow, Manhattan Institute, and Elizabeth Press, Director of Planning & Program Support, IRENA.

Please make sure to connect with us for Rystad Energy updates coupled with insights from these industry thought leaders.