The prices of critical minerals used in clean energy technologies fell sharply in 2023, offering relief to consumers as battery prices dropped 14%, the International Energy Agency (IEA) says in a new report released on Friday. 

Driven by a strong increase in global supply, critical minerals used for batteries particularly saw a significant decrease, with lithium prices dropping by 75%. The prices of cobalt, nickel and graphite, fell between 30% and 45%, according to the Global Critical Minerals Outlook 2024 report seen by Kallanish. 

However, the IEA warns that the current supply might not be enough to meet future demand, as the critical minerals demand is expected to “grow strongly” across all IEA scenarios due to the rise in clean energy technologies. 

While investments in critical minerals rose by 10% and exploration spending rose by 15% in 2023, it was slower than in the previous year. Increased and more diversified investments will be needed to meet energy and climate goals, the agency warns.

The mined copper output increased by under 2% in 2023, with the IEA expecting a “limited growth” in mined supply in 2024. However, several new projects and expansion plans are anticipated to ramp up in 2025 and 2026, which could bring additional volumes to the market. 

Last year, lithium demand and supply each increased by 30%, with the build-up of inventories causing prices to fall drastically. Although prices saw a “slight uptick” in March-April 2024, “a significant price surge in the near term is difficult to envision,” the report notes. 

Nickel too saw a significant price drop of over 40% in 2023, primarily driven by oversupply. Demand for the metal increased 8% in 2023, while mined nickel supply rose 9% in 2023. The magnitude of the nickel supply may “diminish” in 2024, but “prices could remain suppressed” due to multiple projects in the pipeline, the agency adds.

“Secure and sustainable access to critical minerals is essential for smooth and affordable clean energy transitions,” says IEA executive director Fatih Birol. “The world’s appetite for technologies such as solar panels, electric cars and batteries is growing fast – but we cannot satisfy it without reliable and expanding supplies of critical minerals.”

“The recent critical mineral investment boom has been encouraging, and the world is in a better position now than it was a few years ago,” Birol continues. “But this new IEA analysis highlights that there is still much to do to ensure resilient and diversified supply.”