The critical minerals market involves elements such as copper, nickel, lithium, cobalt and graphite. Copper continues to lead the list in terms of mining activities due to its historical importance, but lithium is advancing at accelerated levels.
Canada and Australia lead investments
Investment in the exploration of critical minerals grew 20% during the past year, mainly explained by a record in capital – with an increase of 90% – directed at the exploitation of lithium. canada and australia lead the way with year-on-year growth of more than 40%, especially in lithium-in-rock works. Exploration activities are also expanding in Africa and Brazil.
Global demand for batteries to store clean energy increased by two-thirds last year, becoming a growing share of total demand. And the task of standing up to China’s leadership in the area has also caused spending in other geographies, such as the Union and the European Union and the United States, to accelerate in two directions: towards the creation of an inventory of reserves and creating a supply chain that allows it to detach itself in the short term from Chinese supplies.
China It has been investing rapidly in mining assets in Africa and Latin America, and has begun investing in refining facilities and water reserves abroad, with the aim of securing strategic access to raw materials. Between 2018 and the first half of 2021, Chinese companies invested $4.3 billion to acquire lithium assets, double the amount invested by companies from the United States, Australia and Canada combined during the same period.
None of the Latin American geographies – including Mexico – is among the large investors in the exploration and treatment of lithium and other critical minerals. The Mexican administration, according to its plans, will invest 36.8 million pesos during this year and next in activities of exploration and evaluation of metal deposits.
Assembly companies close extraction agreements
The Paris-based IEA also outlines another relevant move: In a bid to secure mineral supplies, automakers are becoming increasingly involved in the critical mineral value chain. Long-term mining agreements have become the norm in industry acquisition strategies, but companies are also taking additional steps to invest directly in the critical mineral value chain, such as mining and refining.
Since 2021 there has been a notable increase in direct investment activities: in addition to Tesla, major automakers such as BMW, General Motors and Mercedes-Benz have forayed into investments in the critical minerals market and all during the last two years. BMW has invested in lithium refining, General Motors in lithium mining and the third in other long-term businesses involving the metal.