IEA launches the Critical Raw Material program for the energy sector

Fatih Birol the Executive director of the International Energy Agency (IEA) has informed that IEA is going to start the program whose main aim is to secure a steady supply of critical minerals to the energy sector. This is the direct reply to the rising demand for lithium, cobalt, and copper in the production of electric vehicles, solar panels, and other energy equipment which will help to fulfill the Paris Agreement goals. He has highlighted that gas and oil are still an important market that is under the eye of the IEA, however, the secure supply chain of critical minerals to energy technologies is an important and challenging aspect. He expressed: “Currently, we are A, not able to keep up with the demand, and B, the ability to manufacture these critical minerals is concentrated in one single country or two.”

According to Fatih Birol, the emerging program is “inspired by our oil security mechanism”. This mechanism required member countries to hold 90 days’ worth of oil stocks. The stocks could be released independently under the event which would impact the global supply disruptions.

The IEA action appeared as the potential answer to the countries’ efforts in cutting down emissions. This action requires a steady supply of critical raw materials especially rare earth elements. Taking into consideration that the biggest producer of most critical minerals (30 out of 50) is China which last year imposed an export on gallium, germanium, and graphite to protect its supremacy the steady supply chain of CRM’s is nowadays one of the most important goals. Moreover, the US Aerospace Industries Association informs that China is the world’s top miner and processor of rare earths. Taking this under consideration and the potential influence of demand on both price volatility and secure supply chains, the secure supply of CRM’s is IMS key consideration.