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Demand for metals rises along with the ecological transition

Green transition plans are causing the demand for metals to increase exponentially and challenge our society and economy today. The ambitious requirements of the green transition demand large quantities of metals, and their demand will most likely reach unprecedented levels in the coming decades.

To give you an idea, a common electric vehicle battery pack requires: approximately 8 kg of lithium, 35 kg of nickel, 20 kg of manganese, and 14 kg of cobalt. In addition, charging stations also require large amounts of copper. Solar panels, on the other hand, use silicon, silver, zinc and copper. And, wind turbines require iron ore, copper and aluminium.  Following this thread, the International Energy Agency’s Net Zero Roadmap defines that the share of energy from renewables will increase from current levels of around 10 percent to 60 percent. However, fossil fuels will be reduced from 80 percent to 20 percent. This will require a large investment in renewable energy and will have a major impact on the demand for metals.

Against this background, specialists face a number of major challenges. The first question, as expected, is how far metal production can be stretched to support this ecological transition. Production of some materials such as graphite, cobalt, vanadium and nickel appear to be inadequate for the forecasts made, showing a large gap against demand. Other supplies such as copper and lithium are also insufficient.

The supply of materials varies according to each one, i.e. there are some materials whose extraction could be increased by investing in their development and, on the contrary, there are other minerals whose reserves would be very limited, even if large amounts of money had been invested. This is where recycling will play a fundamental role, developing new recycling methodologies for underdeveloped materials and limiting supply. Scrap reuse only occurs on a large scale for copper and nickel, but is now increasing for some scarcer materials such as lithium (in the lithium batteries recycle, for example) and cobalt.

Another factor to consider is the concentration of supply, as the production of certain materials is concentrated in very specific countries. China is the largest producer of vanadium, graphite, molybdenum, aluminium and lead. Australia is the largest producer of lithium. The Democratic Republic of Congo produces cobalt, and other countries such as South Africa, Chile, Russia, Brazil, the United States, Peru and Turkey are also included in this list. All this would entail disproportionate benefits and also certain risks, for example, interruptions in their institutions or problems in expanding their production. In response to this situation, the EU proposes increasing its autonomy in a number of strategic areas in order to avoid being so dependent. This would entail a readjustment of international relations and efforts to extract these elements from within our borders.

Nor should the environmental impacts of mining be forgotten, and it will be of great importance that miners devote time to developing techniques that have less impact on the environment in order to attract more economic resources such as green finance.

Looking at the figures that justify the growth in demand for metals, we find, among others, the production of lithium, which has risen sharply to very high levels. Its production has evolved from around 27,000 tonnes in 2010 to around 82,000 tonnes in 2020. Cobalt production has also grown by 65.81% in the same time period, from 79,270 tonnes produced to 131,434 tonnes. And behind them there is a long list of minerals that have undergone a very similar development.

In conclusion, the demand for metals is increasing at the same pace as the development of the ecological transition plan, which poses a challenge to be able to supply and provide for all the actors in the plan. New techniques need to be developed both for the extraction of materials in an environmentally friendly way and for their reuse. The trade in more complex or exotic metals will start to gain prominence in the area of recycling and companies in the sector will be presented with a new opportunity that will undoubtedly open up a whole new field of expansion.

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