A
new World Bank report highlights the potential impacts that the expected
continuing boom in low-carbon energy technologies will have on demand for many
minerals and metals.
Using
wind, solar, and energy storage batteries as key examples of low-carbon or
“green” energy technologies, the report, “The Growing Role of Minerals and
Metals for a Low-Carbon Future” examines the types of minerals and metals
that will likely increase in demand as the world works towards commitments to
keep the global average temperature rise at or below 2°C.
Minerals
and metals expected to see heightened demand include: aluminum, copper, lead,
lithium, manganese, nickel, silver, steel, and zinc and rare earth minerals
such as indium, molybdenum, and neodymium.
The
most significant example is electric storage batteries, where demand for
relevant metals: aluminum, cobalt, iron, lead, lithium, manganese, and nickel—
could grow by more than 1,000 percent if countries take the actions needed to
keep global warming at or below 2°C.
The
report shows that a shift to a low-carbon future could result in opportunities
for mineral-rich countries but also points to the need for these countries to
ensure they have long-term strategies in place that enable them to make smart
investment decisions. In readiness for growth in demand, countries will need to
have appropriate policy mechanisms in place to safeguard local communities and
the environment.
“With
better planning, resource-rich countries can take advantage of the increased
demand to foster growth and development,” said Riccardo Puliti, Senior
Director and Head of the Energy and Extractive Industries Global Practice at
the World Bank. “Countries with capacity and infrastructure to supply the
minerals and metals required for cleaner technologies have a unique opportunity
to grow their economies if they develop their mining sectors in a sustainable
way.”
The
future demand for specific metals is not only a function of the degree to which
countries commit to a low-carbon future, it is also driven by intra-technology
choices.
The
low-carbon technologies that emerge as most applicable and beneficial, will
play an important role in defining the commodity marketplace of the next 50
years. For example, the three leading forms of alternative vehicles — electric,
hybrid, and hydrogen — each have different implications for metal demand:
electric vehicles require lithium; hybrid vehicles use lead and hydrogen-powered
vehicles use platinum.
Demand
for individual metals and minerals will reflect the component mix of low-carbon
technologies, corresponding with economic changes and technical developments.
To
position themselves well, countries will need reliable sources of economic data
and market intelligence, as well as the capacity to turn that information into
plans, investments, and sustainable operations.
Based
on current trends, it is expected that Chile, Peru, and (potentially) Bolivia,
will play a key role in supplying copper and lithium; Brazil is a key bauxite
and iron ore supplier; while southern Africa and Guinea will be vital in the
effort to meet growing demand for platinum, manganese, bauxite, and chromium.
China
will continue to play a leading role in production and reserve levels in
practically every key metal required under low-carbon scenarios. India is
dominant in iron, steel, and titanium, while Indonesia, Malaysia, and
Philippines have opportunities with bauxite and nickel.
A
“green” technology future has the potential to be materially intensive, the
report states. Increased extraction and production activities could also have
significant impacts on local water systems, ecosystems, and communities. As
countries develop their natural resource endowments, it will be critical that
sustainability, environmental protection, and options to recycle materials be
integrated into new operations, policies and investments.
“The
Growing Role of Minerals and Metals for a Low-Carbon Future” report is intended
to contribute to a richer dialogue around the opportunities and challenges for
resource-rich countries that a low-carbon future presents.
The
analysis is designed to support policy-makers and other stakeholders in the
areas of extractives, clean energy and climate change to better understand the
issues involved and identify areas of common interest.