A recently published analysis predicts that “metals essential to the energy transition will take center stage, with a sustained period of extraordinary growth in demand” which may last until 2030, according to the UK-based consultancy Wood Mackenzie.
The UK-based company, which recently acquired metals analysis firm Roskill, also predicts that a potential ‘rise in’ consumer awareness ‘could undermine’ long-term use of the primary metal ‘.
The author of the new report, Simon Morris, claims that unlike the start of the 21st commodity boom of the century triggered by urbanization and China’s infrastructure spending, this time not all commodities will benefit from increased demand or prices.
Instead, Wood Mackenzie predicts that approximately $ 50 trillion “will be invested [globally] over the next three decades to electrify infrastructure and design those aspects of modern life that contribute the most to carbon emissions ”as a scenario that means“ hydrocarbons will be spectators ”.
While fossil fuels may not be part of the expected boom, Morris writes: “The winning commodities of the energy transition are a set of industrial metals that will electrify society. He later identifies aluminum, copper, nickel, lithium and cobalt as metals that will experience high double or even triple growth in annual consumption by 2030.
According to a scenario presented by Wood Mackenzie, the annual demand for these metals would increase by the following percentages by 2030: aluminum, 29%; ; nickel, 65 percent; copper, 85 percent; lithium, 130%; and cobalt, 167 percent.
Metals producers, miners, investors and policymakers face “dizzying needs for additional metals that will fuel the energy transition over the next 20 years – 360 million metric tonnes (Mt) of aluminum, 90 Mt of copper and 30 Mt of nickel ”under a Wood Mackenzie scenario.
A mining frenzy could make the sector the next environmental scarecrow, following in the footsteps of single-use plastic, the consulting firm warns. “If metal producers are too successful in drawing attention to the amount of their primary metal (that is, not recycled) that will go into cars, phones, telecommunications and energy transition infrastructure, they could become the new target of consumer anger, ”Morris writes.
He continues, “And if, with government policy, they force manufacturers to reduce their use of primary metals, the super cycle story might lack a ‘happy forever’. By going further, consumers might be able to turn away more completely from certain types of consumption. For example, if the “Uberfication” of private transport [drives] a shift to the ownership of grouped rather than individual vehicles, a reduction in the consumption of cars, the demand for metals will suffer. “
Investments in the extraction and recycling of these metals should continue in the short to medium term, according to the consulting firm. “There is a unique opportunity for the industry to act preemptively to ensure that supply is available when it is needed most,” Morris concludes.