Critical Minerals Shortage Threatens Global Energy Sector

The world is facing a critical shortage of high-grade ores, particularly copper and rare earth metals. According to Peter Clack, average copper grades have fallen sharply since the early 1990s, requiring miners to move vastly more rock for the same metal.

This has severe implications for the energy sector, as new mines take 12 to 17 years to develop and existing ones are struggling to keep up with demand. The International Energy Agency's (IEA) 2025 critical-minerals outlook predicts a roughly 30 percent supply shortfall by 2035 under current policies.

Lithium, in particular, is expected to slip into deficit in the 2030s as investment follows market prices down. Rare-earth processing remains concentrated, with the dominant supplier accounting for most of the world's production.

The shortage of critical minerals has significant implications for the grid, with copper smelting fees already indicating that mine output is lagging processing capacity. The IEA and World Nuclear Association have estimated that critical-mineral use nears 7 to 8 tonnes per lifetime terawatt-hour for coal and gas, about 12 for nuclear, and 124 to 200 for solar and wind.

A transition to renewable energy sources has multiplied copper demand per useful kilowatt-hour, exacerbating the shortage. Energy News Beat's grid-hardware review finds that global electricity use is projected to grow above 3.5 percent a year through 2030, with demand growing faster than the wires can carry it.