Global decarbonization to address climate change will require enormous amounts of graphite and manganese, nickel and cobalt. Above all, it will require copper. Without copper, we cannot build solar panels, wind turbines, or electric cars and their battery chargers. S&P Global, the market research firm, expects copper demand to double by 2035 and climb thereafter, dramatically outstripping supply. “In the 21st century, copper scarcity may emerge as a key destabilizing threat to international security,” its 2022 report found.
Mining is having a moment. The 2010’s were a tough decade for the industry, with metal prices taking a dive in the mid-2010’s and mass layoffs across the industry. The prices of gold, silver and copper all bottomed out in 2014 and 2015. Coal has also had a tough decade as the world woke up to climate change and started the transition away.
But the push towards decarbonisation has seen a revival in the mining industry’s fortunes. Put simply, it will become the most important industry in the world’s efforts to achieve net zero.
Lithium is the first battery mineral that comes to mind in this context. The Biden White House has put out estimates that demand for lithium and other battery minerals could swell by 4,000% in the coming decades. And the International Energy Agency has estimated that the world will only have half the lithium and cobalt it needs to hit 2030 climate goals. This article shared an even more stark estimate:
A May report by the Carnegie Endowment for International Peace laid out still more dire projections: in 2030, lithium, cobalt, and graphite demand may outpace production for the U.S. and its allies tenfold, thirtyfold, and eightyfold, respectively.
As a result, the mining industry is having a moment. Ken Hoffman, the head of the battery minerals team at McKinsey, estimates that decarbonising the modern world is going to make the mining industry a lot of money – $15 to 20 trillion by his estimates.
This article is the best we’ve come across that outlines the absolute scale of the challenge and the size of the opportunity in the energy transition. Australia stands to be one of the great beneficiaries of this transition. It is a story worth paying attention to.
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