KZ Insight
Korea Zinc shares the brand values and future vision of the company
‘Minerals’- the core of the Clean Energy Transition Era
2023-10-26
2023 IEA Critical
Minerals Summit
seeks
to ‘strengthen global
cooperation
in establishing supply
chains’ for future
energy security
IEA Critical Minerals and Clean
Energy Summit
The system transition from fossil fuels such as oil and coal to clean energy in response to global climate change is increasing the demand for minerals. In fact, in 2022, the worldwide sales of electric vehicles exceeded 10 million units, accounting for 14% of total new car sales, and global investments in renewable energy also reached a historic high of $600 billion. This sustained growth in the adoption of clean energy is leading to a substantial increase in the demand for critical minerals such as copper, lithium, nickel, and cobalt.
According to a report by the IEA, the market size for critical minerals in the energy transition, such as lithium and nickel, doubled over the past six years, reaching $320 billion in 2022. A significant factor contributing to this growth was the increasing share of clean energy in the overall demand for critical minerals. It can be observed that lithium demand increased threefold between 2017 and 2022, and there were also respective 40% and 70% increases in the demand for nickel and cobalt.
Demand for key materials
and share of
clean energy
in total demand
Unit : ‘kt’, but unit of lithium ‘kt Li’
Clean energy
Other Uses
Unit : ‘kt’, but unit of lithium ‘kt Li’
*Sources : IEA(July 2023), Critical Minerals
Market Review 2023
Governments worldwide are pursuing diversification of their supply base for critical minerals to enhance energy security. Resource-rich nations are reevaluating their mineral laws and striving to create more value from natural resource extraction. In contrast, countries reliant on imports are working to enhance the competitiveness of their mining policies by minimizing environmental destruction while increasing self-sufficiency in critical minerals.
With the acceleration of the energy transition, the interconnection between minerals and energy is expected to strengthen. In this context, the International Energy Agency (IEA) conducted heated discussions on strengthening international cooperation for the diversification of the supply chain for critical minerals and the future of clean energy during the “Critical Minerals and Clean Energy Summit” held in Paris on September 28th.
At the summit, Fatih Birol, the executive director of the IEA, emphasized that “the foremost challenge for governments, businesses, and investors worldwide is to ensure a secure and sustainable supply of critical minerals for the clean energy transition.”
Session 1
Unlocking
potential for
technology,
recycling,
and jobs
Session 2
Accelerating
progress
towards
diversified
mineral
supplies
Session 3
Ensuring
transparent,
sustainable,
and responsible
supply chains
01 Unlocking potential for technology, recycling, and jobs
During the first session, discussions centered around strategies to accelerate technological innovation for mitigating raw material shortages, focusing on efficient use of resources, substitute materials, and new technologies. Policymakers and businesses also explored avenues for more efficient utilization of all waste streams, and they examined specific ways to improve existing waste regulations and incentive mechanisms. Additionally, there were detailed discussions on promoting the development of recycling markets and removing barriers to recycling.
Discussions also revolved around how governments and businesses can foster a skilled workforce and create job opportunities in the mining and recycling sectors to support their growth.
02 Accelerating progress towards diversified mineral supplies
In the second session, there was a focus on identifying the key areas that governments and businesses should particularly concentrate on to accelerate progress toward diversifying supply chains. Discussions centered on exploring strategies to reduce investment risks in mining projects and expedite project implementation.
As both producing and consuming nations contemplated ways to develop projects for mutual benefit, in-depth discussions revolved around specific bottlenecks hindering investments in refining and processing facilities in various regions. Strategies for effectively addressing these bottlenecks were thoroughly examined.
Furthermore, discussions also took place on how to enhance the availability of trustworthy data across the industry to improve market transparency, exploring the potential for collaboration between policymakers and businesses to establish a smooth and transparent market for critical minerals.
03 Ensuring transparent, sustainable, and responsible supply chains
This summit also included discussions on transparency and accountability concerning the environmental, social, and governance (ESG) impacts of mining that policymakers need to consider creating a fair competitive environment. Comprehensive discussions covered identifying legal (regulatory) barriers that hinder or impede sustainable and responsible development practices and explored policy mechanisms that could be implemented to promote or require improvements in ESG performance.
Countries rich in minerals must utilize their resources to promote sustainable economic development. There were discussions about identifying areas that require strengthened international cooperation, and efforts should be made to actively support those areas where international organizations can work together complementarily. The IEA also discussed strategies to lead the way in global progress toward mineral security, market transparency, and sustainable development execution.
This IEA international conference expanded its reach to include non-member countries, key corporate investors, international organizations, and a wide range of stakeholders. It brought together more than 50 energy and mineral resource ministers from countries, global business leaders in the critical minerals sector, investors, international organizations, and civil society figures, including Jennifer Granholm, the U.S. Secretary of Energy. Notably, among the attendees, Yun B. Choi, Executive Chairman and CEO of Korea Zinc was the sole representative from Korean companies, making his participation stand out.
Executive Chairman and CEO Choi delivered a keynote speech in the second session titled ‘Accelerating progress towards diversified mineral supplies’. He emphasized the need for government and private sector collaboration, as well as global cooperation, to enhance the stability of the supply chain for critical minerals used in secondary batteries.
The issue of high dependence on
specific countries for
nickel supply
chains is directly linked to energy
security.
Therefore, governments need to
carefully assess the areas
where they
should focus their resources and
investments
through global policy
coordination.
To reduce over-reliance
on specific countries or regions
for
critical minerals, the roles played by
initiatives like the
U.S.’s IRA and the
EU’s CBAM are very important.
– Yun B. Choi,
Executive Chairman and
CEO of Korea Zinc
In order to proactively address the surging demand for nickel, one of the critical materials in the energy transition, Korea Zinc plans to construct and operate an ‘All-in-One Nickel Refinery’ with an annual production capacity of 426 million tons of operational nickel by 2025.This facility will allow to produce various nickel feedstocks, including MHP, Matte, and black mass, tailored to meet the demands of consumers. By doing so, Korea Zinc is expected to contribute to the diversification of the global nickel supply chain, holding the world’s largest nickel sulfate production capacity, excluding China.
Korea Zinc
Nikel Value-Chain
To reduce excessive dependence
on specific countries and regions
for critical minerals,
securing sustainable
industrial competitiveness is essential.
Korea Zinc is committed
to
expanding its scope to the global
level through active cooperation
to diversify the supply
chain for
critical minerals in the second
battery sector.
Furthermore,
we will continue our efforts to
create a virtuous cycle
of
resources, conserve energy, and
create circular economy value.
