Quick Insight: yes, we need more mining but how much investment do we need?
And what tradeoffs will we need to make for a green energy future to be possible.
By now we should all know that if the sustainability transitions are going to happen, then we will need more mining. But, how much more, and how much will this cost?
Green energy inputs such as lithium and rare earths are getting a lot of press coverage. But, it may surprise you to learn that the biggest investment needs are going to be for extra copper and nickel. But then, when you think about it, copper is used in solar, wind, EV's and electricity networks. So we should expect demand to rise sharply. And nickel plays an important role in increasing the energy density of EV batteries. And EV batteries will make up 50-60% of the demand for energy transition metals. So that shouldn't be a surprise either.
How big is the gap?
According to the IEA it's roughly US$180 billion, or c. US$23 billion pa. This sounds like a massive number, as do the figures often used in reports on future green energy mineral demand. Annual copper production will need to increase by 11.5 million metric tons (45%) by 2031—equivalent to doubling production from the top four copper-producing countries. Demand for lithium, nickel, and cobalt (the core battery metals) is expected to increase by 8x, 2x, and 1.8x, respectively. And the availability of rare earth metals (a crucial components of electric motors) will need to double.
Will be be able to raise all of this extra investment, or will the transitions hit the buffers?
Actually, the shortfall is not as big as you might think. Yes, its challenging, but we have done it before when we scaled up fossil fuel production in the second half of the last century.
The biggest challenge is probably going to be political - balancing the need for more mining with other social and environmental issues.
We need an informed debate on what matters to us, and what price we are prepared to pay.
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