A report by the Energy Transitions Commission (ETC) has highlighted the need for increased investment to avoid a shortage of minerals in the coming decade. The rapid demand growth resulting from the energy transition could lead to supply gaps and higher prices for metals such as lithium, nickel, graphite, cobalt, neodymium, and copper. This could potentially delay the target of achieving net-zero emissions by 2050.
To address this risk of a shortage, the report suggests that mines need to produce more. However, the development of large-scale mining projects can take up to 20 years. The lack of investment in exploration and output over the past decade has further exacerbated the problem.
Chair of the ETC, Adair Turner, emphasized that scaling up the supply of key minerals like lithium and copper would be challenging within the next decade to meet the rising demand. The report also highlighted that annual capital investment in energy transition metals has averaged $45 billion over the last 20 years, falling short of the $70 billion required per year until 2030 to expand the supply.
To bridge this investment gap and ensure a stable supply of metals, the report calls for collaboration between governments, regulators, producers, and consumers. The recommendations include increasing recycling efforts, improving material efficiency, investing in new mining projects, and implementing stricter environmental and social standards.
The ETC projects that the energy transition will require the production of up to 6.5 billion tonnes of materials between 2022 and 2050. Steel, copper, and aluminium are expected to account for 95% of this demand. The forecast assumes aggressive deployment of clean energy technologies for global decarbonization and adherence to recent trends in recycling and material usage.
However, the report acknowledges that if investors accelerate progress in technology, efficiency, and the recycling of clean energy materials, the need for fresh supply from mines could potentially decrease by 20% to 60%.
In conclusion, the energy transition faces potential supply gaps for crucial metals unless investment is increased. To mitigate this risk, efforts must be made to ramp up production, investment in new mining projects, improve recycling, and implement stringent environmental and social standards. Collaboration among various stakeholders is crucial to ensure a stable supply of metals and achieve the goal of net-zero emissions by 2050.
