The mining industry faces "considerable challenges" meeting larger-than-expected demand for copper, nickel and other electric vehicle metals fueled by a US climate law, said S&P Global in its recent report as quoted by Reuters.
The US Inflation Reduction Act (IRA) offers tax breaks for EVs, solar panels and other renewable energy products made from metals extracted in the United States or countries with U.S. free trade deals. Metals from "foreign entities of concern" including China, Russia, North Korea and Iran will be banned in 2025. That has sparked a race among manufacturers to lock down supply.
Demand forecasts for various EV metals have increased 12% to 15% since US President Joe Biden signed the IRA last August, according to the report. By 2035, demand for lithium, nickel and cobalt is expected to be 23 times higher than in 2021, with copper demand doubling over the same period, the study found. All of the metals are widely used in EVs and other electronics.
Significant quantities of battery metals are needed to satisfy the new demand. Only lithium is expected to be available to US industries in significant quantities, while nickel and cobalt supplies are unlikely to satisfy demand, the report found. Recycling is unlikely to provide enough raw metals.
"The global trade in minerals will increasingly reflect the competition between the U.S. and China, as well as Europe, for those supplies," said Dan Yergin, S&P Global's vice chairman. "Mineral supply is going to be increasingly entangled with geopolitics."
Theodor Lisovoy, Editor in Chief of the European bureau, Rough&Polished
