Copper, nickel, lithium cobalt, silver or platinum multiply their demand until 2030 for renewables, batteries and electric vehicles, according to BofA.
Bank of America warns, in its “Global Metals Weekly” report, of a new movement in the heat of the COP26 emission reduction targets. If you want a horizon of net zero emissions, the demand for raw materials such as lithium, cobalt, nickel, silver or platinum will skyrocket. We will have to count on it and take numbers.
The demand for metals electric vehicles, energy storage and renewable energies will increase rapidly to achieve the goal of net zero emissions. The annual growth rate could reach 25%.
Decarbonization effectively means a electrification of the world economy through renewable energies, energy storage and electric vehicles.
Renewables with lithium and copper
According to the IEA, installed power generation capacity in metal-intensive renewables and sales of electric vehicles should increase by 4 and 18, respectively, between now and 2030.
Coupled with BofA metal demand models, a growth rate of metal consumption is calculated. 3.6% (for copper), 24.6% (lithium), 7.6% (nickel), 18% (cobalt), 2.5% (silver) and 3.3% (platinum). In this sense, the supply of lithium in 2020 was 387,000 tons, but the demand could increase to 3 and 5 million tons in 2030 and 2050, respectively. mining industry must increase its Capex: it will need to spend 72,000 million dollars per year until 2030 just to avoid the bottlenecks towards achieving the goal of zero emissions, a figure that does not take into account the aforementioned increase in demand, so the investment needed will be greater.
Global mining Capex averaged $99.5bn over the last decade, but this figure does not necessarily include all the additional investment needed to support decarbonisation. Therefore, it could it will be necessary to double it to achieve that level of emissions in three decades.
MIFTs (important metals)
The installed capacity of renewable energies must gradually increase in the coming years to reach the zero level. In fact, according to IEA calculations, the share of solar PV and wind power in total generation should reach 40% and 68% in 2030 and 2050, respectively.
This has implications for a number of MIFTs (Important Metals for Future Technologies), especially copper and silver.
The demand for the former could increase by 4 million tons per year thanks to investment in renewable energy generation, without taking into account the power generation capacity. Similarly, the demand for silver, which is used in solar panels, could also be higher in the coming years, compared to around 3,000 tons in 2019/2020. Energy storage, it is necessary to solve the imbalance that occurs with renewables between the periods of electricity generation and the moment in which it is needed, it is necessary to store the electricity. The hydrogen and the batteries (for which lithium is essential) are some of the technological solutions being considered to achieve this. And finally, BofA analyzes the automotive sector. The electric vehicles should represent the 64% of car sales in 2030, a figure well above the current penetration rate of 31%.
In addition to passenger cars, the IEA scenarios also incorporate targets for commercial vehicles. This is especially important for platinum, as BofA believes heavier vehicles will run predominantly on fuel cells, rather than batteries. As more electric vehicles are put on the road, the demand for electric vehicles will grow. platinum and of copper.