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Mineral prices threaten cleantech affordability

Jun 27, 2022
Price index of critical materials for clean energy technologies, by year
Data: IEA; Chart: Simran Parwani/Axios

Soaring prices for critical minerals threaten to reverse the trend of cleantech projects' declining costs.

Why it matters: Large-scale project viability could be at risk.

State of play: Prices on key materials such as lithium (batteries) and silicon (solar) are expected to increase through the end of 2022, according to a report from the International Energy Agency.

  • Steel prices (wind) hit a 2021 peak, but are expected to decline.
  • Price increases in 2021 were "greater than at any point in the 2010s," the report states.

The intrigue: IEA found evidence that the investor pool for critical materials is widening as more strategic groups try to insulate themselves from further supply disruptions.

  • It found vehicle and battery manufacturers such as Volkswagen, Tesla, CATL and LG Energy Solution are more willing to be directly involved in mineral mining and processing.
  • Governments, too, are allocating capital to domestic mineral mining, processing and recycling projects.

The bottom line: Financial institutions are still eager to fund cleantech projects, and many have actively set aside funds to do so, but rising prices could limit the number of projects that cross the finish line.

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