- The long term outlook for many energy-related metals and minerals is brighter than ever before.
- Earlier this month, BloombergNEF estimated that the mining industry needs fresh investments of some $2.1 trillion to secure the supply of critical metals and minerals.
- So far, the bright long term outlook has failed to motivate miners to expand production of those metals in any meaningful way.
Metals are the new oil and gas when it comes to the energy transition. Making the vision of an emission-free economy running on wind, solar, hydrogen, and batteries requires massive amounts of certain metals and minerals labeled as critical—and with a good reason. Without these metals, there will be no transition. And now, many of them are facing critical shortages.
Earlier this month, BloombergNEF estimated that the mining industry needs fresh investments of some $2.1 trillion to secure the supply of critical metals and minerals. Otherwise, the transition forecasting arm of Bloomberg said, the cost of the transition is set to tick even higher than it already is.
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“The report indicates that key energy transition metals such as aluminum, copper and lithium could face deficits in primary supply this decade – some as soon as this year,” BloombergNEF wrote, adding that per its estimates, the world could need 3 billion metric tons of metals between now and 2050 in order “to properly build out low-carbon solutions such as electric vehicles, wind turbines and electrolyzers.” What’s more, this is only half of the amount needed to be produced by 2050 in order to succeed in the net-zero vision.
Such an outlook, while looking rather grim to transition architects, represents an opportunity for investors. Indeed, Reuters columnist Andy Hume wrote this week that the shortage predictions should bring big investors back to metal funds—after flows into commodity funds declined considerably over the last ten years.