Surge in Energy Storage Demand Spurs Global Need for Critical Minerals

Energy Storage Drives Global Demand for Critical Minerals
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As the world shifts toward sustainable energy solutions, the demand for critical minerals has surged dramatically in recent years. While the electric vehicle (EV) market remains a significant consumer of these minerals, the energy storage sector is increasingly making its mark. By 2024, global energy storage installations have achieved a total capacity of 200 GWh, reflecting a remarkable 53% increase from the previous year, according to research firm Rho Motion. This rapid growth in energy storage systems is poised to have a substantial impact on the global demand for essential minerals.

Battery Energy Storage Systems (BESS) play a crucial role in supporting renewable energy development during this transition. These systems utilize batteries to store electricity for use during high demand periods or when production is low. Various battery types rely on different critical minerals. For example, lithium-ion batteries require lithium, nickel, cobalt, and graphite. In contrast, lithium-iron-phosphate (LFP) batteries also use lithium, while sodium-ion batteries incorporate manganese. The International Energy Agency (IEA) emphasizes that these minerals are “fundamental tools” in energy storage systems.

Market forecasts indicate that the energy storage market could be valued at approximately $114 billion by 2030, with Rho Motion predicting a further increase in installations to a total capacity of 400 GWh by 2025. Mordor Intelligence anticipates a compound annual growth rate (CAGR) of 14.31%, rising from $58 billion in 2025. These trends suggest robust demand for BESS batteries, which could account for about 20% of the global battery market.

Lithium, currently responsible for 9% of global demand from energy storage technologies, is particularly well-positioned for growth. The IEA’s Global Critical Minerals Outlook 2025 report states, “energy storage will start to drive a significant increase in lithium demand.” Similarly, total demand for graphite is projected to exceed 10 million tons by 2035, primarily due to energy storage needs.

However, while BESS systems present opportunities for many critical minerals, the outlook is less favorable for others. The growing preference for lithium-iron-phosphate (LFP) batteries, which do not require cobalt or nickel, has resulted in a declining interest in these two minerals. In 2024, LFP batteries accounted for 87% of energy storage installations, up from 83% the previous year, according to Rho Motion. Martin Jackson, a raw materials consultant at the commodities advisory firm CRU, noted, “We have seen a truly monumental decrease in the intensity of nickel and cobalt use in battery demand.”

It is important to note that this shift does not indicate a comprehensive decline in demand for cobalt and nickel. Energy storage still makes up a minority share of the global battery market, with the EV sector dominating at 80%. This sector continues to rely heavily on lithium-ion batteries that contain nickel and cobalt, particularly the NMC (nickel-manganese-cobalt) models.

Africa, which possesses approximately 30% of the world’s critical mineral reserves, stands to benefit from these dynamics. The continent, primarily due to the Democratic Republic of Congo, is the leading supplier of cobalt and accounts for 11% of global lithium production, as reported by the IEA. Additionally, Africa plays a significant role in the global graphite and manganese markets.