ENERGY MINERALS

$1 trillion in metals investment needed for energy transition

The transition to a low carbon global economy will require more than US$1 trillion of investment in metals such as copper, cobalt, aluminium, nickel and lithium by 2035 – more than double the figure invested over the past 15 years, natural resources consultancy Wood Mackenzie has said.

Tom Hoskyns

Rising demand for clean technology such as EVs will need vast investment in metals such as copper, nickel, lithium and aluminium

Governments across the world have used stimulus packages to accelerate or kick-start decarbonisation initiatives in 2020.

However, Julian Kettle, WoodMac's vice chairman for metals and mining, cautioned the fundamentals for several metals were "poor and deteriorating, with prices for most well below long-term incentive levels".

"Understandably, investors are not totally convinced that the road to recovery is assured or of the sunlit uplands that the energy transition represents.

Kettle suggested the current lack of investment in new metal supply could eventually see some metals substituted out of use.

"If producers cannot meet the most basic of consumers' needs, a time will surely come when they find ways to innovate out such unreliable raw components from their supply chain," said Kettle.

Meanwhile, the growing importance of ESG among investors means Kettle expects carbon to become a "non-negotiable component of any AGM - as safety did in the 1990s".