Critical materials must go circular for energy transition

As we decarbonise our energy sources, the demand for critical materials is growing. Lithium, nickel, cobalt, manganese, graphite and rare earth elements are among the materials needed to create wind farms, solar panels and batteries for electric vehicles. thinkstep-anz’s Head of Circular Economy, Jim Goddin, explains how a circular economy is essential for a sustainable transition to renewable energy.

There’s no way around mining critical elements. Those materials that are commercially essential but rare are only found in certain regions and prone to price volatility or exposure to social or environmental risks. If we accept that we need them for technologies that replace energy from fossil fuels, the only solution is to mine them. They’re unavailable elsewhere in the volumes we’ll need them, and although we should keep working on substitutes, time is now against us.

This means that sustainable mining practices are crucial. Today, comminution (crushing rocks) accounts for around a third of a mine’s typical energy use. Collectively, this accounts for around 3% of global energy use — just crushing rocks.

For many minerals, we’ve already extracted the rich deposits. The concentration of desired materials in the rocks we mine has reduced significantly since the early 1900s. This means we must crush more rock to get the minerals we seek.

The European Union is heavily focused on sustainable extraction as it aims to produce more of what the region needs at home. Mining can leave visible scars on the landscape, and reports of its environmental and societal impacts are all too common. This means that the bar for a social licence to operate is high. Taking genuine action to promote sustainable mining is vital, but just as important is how we use the materials we extract.

The link between critical minerals and the circular economy

The circular economy is all about retaining manufacturing value. It’s about keeping the products we manufacture in service for longer and how we can reuse, remanufacture and ultimately recycle or reintroduce materials back into the environment to nurture more growth.

Recycling alone isn’t the solution.

A significant challenge in recycling critical materials is the loss of trace elements during the process. When we recycle high-value alloys containing critical minerals, those critical minerals often get lost or diluted through the recycling process. This means that we must replace those critical elements and the only way to do that is to mine some more.

One of the best ways to minimise the impacts of mining — and our exposure to supply risks — is to reduce the material we need. This means using materials for longer and then reusing or remanufacturing components, so we keep their properties and maintain the value added through manufacturing.

Doing this doesn’t reduce what we need to mine to establish our low-carbon future but drastically reduces our need to replace these materials. This, in turn, enables other regions to secure what they need sooner and accelerates the low-carbon transition. It also creates opportunities for new jobs and shelters our economy from supply shortages, price volatility and geopolitical factors that would otherwise undermine our economic resilience.

The role of geopolitics

The geopolitical landscape significantly influences the supply of critical minerals. Countries like China have established a monopoly over certain minerals through state-supported mining and refining processes.

To mitigate supply chain risks, countries must collaborate with friendly nations and adopt circular economy principles. Businesses, particularly in advanced manufacturing, play a vital role in managing these risks. It’s imperative for a business to understand their risks and find ways around them.

Businesses must understand and manage the risks associated with the supply of critical materials. Developing strategies to retain ownership and access to these materials is vital for mitigating supply chain disruptions and ensuring long-term sustainability.

Shifting the mindset

Our traditional economy involves making and selling products. Once we’ve sold the product, we no longer have access to the materials it contains, and we have to buy more. As the demand for materials outstrips supply, our costs and risks increase.

In the circular economy, the focus isn’t on selling the product but on selling the function that the product delivers. A growing number of businesses have adopted this model and now rent access to their products. They retain ownership and continue to have access to the critical materials they’ve already bought. In some cases, this approach has also motivated the business to design better, more durable and more repairable products. Philips’ light-as-a-service is an excellent example of this.

However, one of the most challenging aspects of this transition is changing societal attitudes. A large part of how we define ourselves and broadcast our success in life is through buying things. How do we shift the old markers of success to something else that doesn’t require us to consume vast amounts of material?

What should we aspire to instead as a society and as individuals? The most frequent response to this question is that we need to redefine success in life, shifting our markers from material possessions to free time, experiences, relationships and community contributions.

Sustainable mining and circular economy models are crucial to our economic resilience and to our low-carbon, sustainable future. However, the real challenge is changing what we aspire to and how businesses deliver value to us.

Image credit: iStock.com/piranka