New Delhi [India], August 1 (ANI): Global demand for critical minerals is set to rise strongly through 2040, driven by the expansion of electric vehicles, battery storage, renewable energy and electricity networks, while supply gaps for key minerals such as copper and lithium are expected to persist, according to the International Energy Agency's (IEA).

The report suggests that meeting future demand will require more than USD 750 billion in investment in mining and refining between now and 2040 under the Stated Policies Scenario (STEPS). Copper is expected to account for the largest share of investment at about USD 310 billion, followed by nickel at USD 280 billion.

The IEA projects lithium demand to more than triple by 2040 under STEPS, while graphite demand is expected to double and nickel demand to increase by 65 per cent. Rare earth demand is projected to rise by around 50 per cent, while copper demand is set to grow by more than 25 per cent, adding around 7 million tonnes by 2040.

Despite a growing pipeline of mining projects, the agency said supply gaps for copper and lithium could remain through 2035. A gap also emerges for cobalt, largely due to the export quota introduced by the Democratic Republic of the Congo, while nickel's supply outlook has tightened somewhat compared with last year.

The bigger vulnerability lies further down the supply chain. Mining projects are becoming more geographically diversified, but refining and downstream processing remain highly concentrated. China currently accounts for just under 50 per cent of global copper refining, 70 per cent of lithium refining, 75 per cent of cobalt refining, 85 per cent of magnet rare-earth separation and more than 90 per cent of battery-grade graphite production.

The IEA said this imbalance could create bottlenecks even as new mining capacity comes online. Announced projects outside dominant suppliers point to substantial increases in lithium and graphite mining, but refining and cathode-material capacity remains considerably smaller.

Recycling is expected to become an increasingly important source of supply. Under STEPS, secondary supply could roughly double its share, with average recycling rates rising from around 10 per cent currently to nearly 20 per cent by 2040.

The report said timely policies to reduce investment risks and support refining, processing and recycling capacity could help create more balanced and resilient critical-mineral supply chains. (ANI)