Critical dilemmas: Critical mineral demands versus long-term benefits of renewable energy

The surge in demand has spurred significant supply growth, particularly in countries like China, Indonesia, and the Democratic Republic of the Congo. As a result, prices for several battery-related metals have come under pressure, as supply attempts to keep pace with—if not outstrip—demand.

Yet, behind these market dynamics lie deeper uncertainties. While recent years have seen strong growth in mineral demand, the pace of investment is losing steam. In 2024, global spending on critical minerals rose by just 5%, a marked slowdown from the 14% jump seen in 2023. Exploration activities have plateaued and start-up funding shows early signs of hesitation, meaning that long-term supply may struggle to meet the world’s needs unless new momentum is found.

The race to secure critical minerals is not only an industrial challenge but also a defining test of whether the long-term benefits of renewable energy—cleaner air, reduced emissions, and energy security—can be realized amidst tightening resource constraints.

The Global Transition

Mineral requirements for renewable energy technologies are expected to quadruple by 2040, highlighting the pivotal role of critical minerals in the global transition to sustainable energy.

The Philippines currently financially encourages renewable energy scale-up through tax holidays, reduced corporate tax rates, and VAT exemptions on renewable energy equipment and facilities. The country’s abundance of natural resources such as high-temperature reservoirs and excess feedstocks contribute to its 31.5% renewable energy share. 

A range of energy transition minerals and metals (ETMs) essential for panels, turbines, and technological infrastructure—including copper, iron, and nickel—are prevalent in the country. The Philippines primarily exports its critical minerals–owing to a lack of a large-scale (regionally comparative) refinement industry. Specifically, nickel ore, copper ore, and iron-related materials are exported to neighboring countries like China, which receives a predominant majority of Philippine nickel ore exports. After it’s exported to China, it’s processed to serve as feedstocks for battery materials (notably for lithium-ion batteries).

The global energy sector is responsible for 13.6 gigatons of carbon dioxide emissions corresponding to 41% of the total global emissions. It is anticipated that this share would increase commensurate with the growing population and demands of technological advancements. Much effort is now being put into research and development of renewable energy, which is becoming less expensive and more efficient.

Renewable energy has always been anticipated to reduce carbon emissions in the energy sector. However, the demand for minerals necessary for renewable energy products and infrastructure is substantial. In response, the Philippine government generally prioritizes local production of batteries and wiring to support this transition. This shift to clean energy technologies will eventually lead to a large material footprint. 

Critical minerals are essential to economic security and to the manufacturing of certain products but have vulnerable supply chains. Mineral criticality is not static and changes as supply and demand dynamics evolve. As of 2022, there are 50 critical minerals defined by the USGS including aluminum, arsenic, chromium, dysprosium, magnesium, nickel, titanium, tungsten, and zinc. Aside from batteries, these minerals collectively support components like permanent magnets for wind turbines, photovoltaic cells, and corrosion protection for the deployment of renewable energy technologies. 

Solar & Wind

Two of the renewable energy sources showing the most potential for expansion in the Philippines include solar photovoltaic and wind. Globally, the World Bank expects the capacity of these two sources to increase by 500% and 300%, respectively. The Global Wind Energy Council also advocates increased wind energy investment in the Philippines and other countries with significant offshore resources, such as Japan, South Korea, Australia, and Vietnam. Doing so is expected to accelerate wind installations beyond 300 gigawatts per year. They concede, however, that despite its tremendous technical potential, the country faces significant hurdles in regulation, seabed lease acquisition, grid connection, ports, and supply chains.

Solar photovoltaic is one of the most rapidly popular renewable energy technologies. The Philippines’ location near the equator provides ample solar radiation with an average number of four sun-hours (i.e. hours where solar radiation reaches a peak value of 1 kW/m2) daily (Panaligan, 2020). Critical minerals are essential for producing photovoltaic cells and grids, with aluminum, copper, and silver being in highest demand for solar photovoltaic technology. While aluminum is one of the most globally abundant metals, its supply is not expected to be depleted soon since extracting all three minerals requires open-cut or open-pit mining.

In the Philippines, copper remains a rich mineral source. With significant deposits in areas like Baguio and Mankayan, copper plays a crucial role in electrical systems with solar panels and wind turbines. Additionally, the presence of several substantial nickel reserves further the ambition for future indigenous energy transmission and distribution. 

Wind turbine technology converts the kinetic energy from wind into electricity. Similar to solar photovoltaic technology, the Philippines is at a geographic advantage for wind energy generation. Consequently, there are already several local onshore wind farms in the country including the Burgos Wind Farm and Caparispisan Wind Farm in Ilocos Norte, the Pililla Wind Farm in Rizal, and the San Lorenzo Wind Farm in Guimaras. The demand for critical minerals for this renewable energy source is primarily for the construction of wind turbines. Steel, manufactured from iron ores and used for the turbines themselves, has the highest demand followed by copper used for the wiring systems. Depending on the design, other minerals such as nickel, molybdenum, titanium, manganese, vanadium or cobalt may be required.

If the 2015 Paris Agreement climate goals are met by 2040, the IEA expects the demand for copper to double and the demand for lithium to grow over 40 times as the clean energy transition progresses. Such an increase in demand would require increased mining operations and mineral processing, which both pose significant concerns to communities and biodiversity.

The acquisition, processing, and waste management of critical minerals poses safety and health risks to communities.

Mineral extraction and processing typically take place at mining sites near communities eventually affected by various health risks including respiratory diseases, infectious diseases from air, water, and soil contamination, noise-induced hearing loss, chemical exposure, and physical injuries, among others. 

A comprehensive analysis of small-scale mining based in Benguet, Philippines by a team from the University of the Philippines Manila summarized the environmental, health, and safety hazards attributed to mineral extraction. Small-scale miners are particularly notorious for using mercury and cyanide, both swiftly lethal upon adequate exposure. Among the primary causes of accidents and physical injuries in the mining work process were trips, cave-ins or rock falls, subsidence, and misuse of explosives and equipment. Consequent self-reported health symptoms include dizziness, coughing, purulent phlegm production, fever, and fatigue.

A study by a team from the Vietnam National Institute for Food Control (NIFC) in Bac Kan, Vietnam found that soils near mining sites demonstrated elevated levels of arsenic, cadmium, lead, and zinc which posed both carcinogenic and non-carcinogenic risks. Dermal exposure was the greatest contributor to non-carcinogenic risks while ingestion was the greatest contributor to carcinogenic risks. The same study found that children were at higher risk compared to adults. Similarly, Arreza et al.’s (2022) report showed that road dust samples collected in human settlements near Surigao del Sur mining areas had concentrations of chromium, nickel, manganese, and zinc exceeding the average urban road dust metal concentrations and the regulatory guideline thresholds of various international agencies. The study also found children to be at high risk for exposure to such dangerous chemical dusts.

Proper waste management and disposal at the end of a renewable energy material or infrastructure's life can be challenging. Similar to mining sites, health assessments around a metal solid waste dumping in Assam, India reported high concentrations of chromium and zinc classified as strongly to extremely polluted and strong to moderately polluted,respectively. Chromium posed  significant carcinogenic and non-carcinogenic risks, particularly  to children.

Navigating the transition to renewable energy, particularly regarding critical minerals, is a complex challenge that demands ongoing scientific and political collaboration with a focus on affected communities and localities.

The urgency for a clean energy shift is clear, with substantial benefits that make renewable energy the globally compelling choice. In the context of critical minerals, in particular, the collaboration between government agencies, research groups, and impacted  communities is imperative in developing sustainable mining practices and developing policies that regulate the extraction of minerals and ensure the safety of the workforces involved.