Mining and the big 5 energy transition metals


Mining activities will be crucial for an energy transition to happen.

According to information provided by Metals and Mining and reported via Forbes, the entire renewable power value chain will need primarily of 5 metals to achieve its low-emission goals.

Although the energy transition represents a vital opportunity for miners, many in the industry believe they pursue a completely distinctive path.

The reduction in carbon-emissions requirement leads people in the industry to underestimate mining efforts.

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However, according to industry analysts, mining will be crucial for such a transition to happen.

There are five metals heavily needed in renewable energy infrastructure, mainly in electrification activities: copper, nickel, aluminum, cobalt, and lithium.

Wind turbines, solar panels, energy storage batteries, and charging centers for electric vehicles (EV) will need from those materials in their equipment.

Which will be the future for mining then? Julian Kettle from Metals and Mining, consulted by Forbes, said the next 20 years of the energy transition would be transformational for metals.

The big five for transition

Among the activities in which the significant five metals will be crucial for the energy transition to happen are the Electric Vehicles (EV) construction and reliability services. The EV industry will heavily rely on aluminum, copper, lithium, nickel, and cobalt.

For instance, aluminum will minimize electric cars and truck weight. Batteries for vehicles will need lithium, nickel, and cobalt for energy storage purposes.

Another renewable sector in which metals are needed is in the transmission and distribution grid construction. In that regard, copper and aluminum are critical for the grid to function reliably and sustainably.

Finally, wind turbines and solar panels require several metal components in their construction.

These metals’ importance is increasing since forecasts predict an increase by about a third by 2040 in aluminum and copper demand. Nickel may increase by two thirds by the same date, and cobalt and lithium by twice or five times, respectively.

Some experts from Wood Mackenzie observe such forecasts may equal the mining transition for China in the eighties. When China began its national infrastructure investment programs, mining skyrocketed.

In that sense, mining could be equally benefited from a cleaner energy transition now.

Concerns: risks and costs from a mining boom

One big concern from people in and outside the industry is the increasing dependence on cobalt supply from the Democratic Republic of Congo. Projections foresee 80% of the global supply of cobalt by the Republic by 2025.

Therefore, experts recommend battery makers to invest in technologies to reduce the cobalt’s proportion in their batteries.

Another concern is the cost of this metal transition. According to Metals and mining predictions, the transformation will require over $1 trillion over the next 15 years to address a consistent supply of only these five metals.

For nickel, cost projections are $150 billion; for aluminum of $335 billion; and copper of $525 trillion. In that sense, mining will need stimulus and federal back-up to achieve its goals in the transition.

Finally, experts expect fiscal support to appear. It may not be as direct as in the energy sector through green hydrogen or to-decarbonize bonds. Some initiatives such as green deals, transparent policies on a carbon tax, and ESG standards may be the answer for mining companies to embrace.

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