Majority of critical minerals face heightened climate risks by 2050, study finds

Critical minerals are vital for electric vehicle (EV) batteries, wind turbines, and solar panels.

This is according to a new report from PwC, which analysed nine commodities across critical minerals such as copper, cobalt and lithium; key crops such as wheat, rice and maize; and vital metals such as zinc, iron and aluminium.

Cobalt, copper and lithium are crucial components in electronics and clean-energy technologies, while aluminium (derived from bauxite), iron and zinc play pivotal roles in manufacturing, transportation and infrastructure.

The production of these crucial commodities is heavily concentrated in a select few countries, many of which are grappling with escalating climate risks. Each resource relies on just three countries for anywhere from 40% to 85% of its global supply.

According to the report, even with a rapid reduction in global carbon emissions, by 2050, 87% of global rice production, more than 70% of cobalt and lithium production, and approximately 60% of bauxite and iron production will be vulnerable.

PwC’s global climate lead Emma Cox said: “Even if global carbon emissions rapidly decrease, climate disruption poses a serious and growing threat to the world’s ability to produce essential commodities – including food as well as materials that are themselves essential to the net-zero transition.”

The report highlights that crops responsible for 42% of the world’s calorie intake are increasingly imperilled by heat stress and drought. Rice stands out as exceptionally vulnerable, with an estimated 90% facing significant heat stress by 2050 in a high emissions scenario.

Drought risk for essential crops is also mounting, with less than 1% of maize and wheat currently confronting significant drought risk, but projected to surpass 30% and 50%, respectively, by 2050 in a high emissions scenario.

Moreover, approximately 40% of zinc production could face significant drought risk by 2050.

However, the report notes that it’s possible to mitigate these risks, with 47% of chief executives already prioritising safeguarding their workforce and physical assets against climate-related risks.

Strides in corporate action

According to PwC’s 2024 Annual Global CEO Survey, 47% of chief executives have already implemented measures to protect their workforce and assets from climate change.

However, most of the remaining firms, 29% of the total, have no plans to act in response to these issues, underscoring the pressing need for further action to ensure the global economy effectively adapts to climate risks.

This includes strengthening resilience by identifying and managing risks across the supply chains, seizing opportunities to offer products or services that aid companies and communities in adaptation, and collaborating with stakeholders ranging from governments to local communities to foster collective efforts and advance adaptation initiatives at both policy and systemic levels.

PwC UK’s global sustainability leader Will Jackson-Moore said: “Many locations that produce essential commodities are likely to experience more frequent spells of intense drought and heat stress by 2050.

“To avoid economic losses and protect communities and ecosystems; producers, and the broader business community, should understand the impact of climate disruption on production and engage in multi-stakeholder efforts to adapt.”