Mining, refining and smelting sectors need to invest up to $4 trillion to support the net-zero transition, otherwise the supply shortage of materials necessary to reduce CO2 emissions may hinder the progress in the field, according to a report by McKinsey.
To meet demand for minerals and metals used in battery electric vehicles (BEVs), wind turbines, solar panels and electrolysers, the report states that mining project development will need to far exceed historical growth rates, while the pace of exploration will also have to accelerate.
Investments in mining, refining and smelting will need to increase to about $3-trillion to $4-trillion by 2030, or about $300-billion to $400-billion a year, including capital expenditure for exploration and new and ongoing projects.
“Labour capacity will also need to be increased by 300 000 to 600 000 specialised mining professionals, which could be particularly challenging given the recent decline in the number of mining engineering graduates,” the report warns.
There is also a requirement for an additional 200 GW to 500 GW of energy by 2030 to power these mining and processing assets, which will be equivalent to 5% to 10% of estimated solar and wind power capacity by 2030.
The report forecasts that, while some materials such as nickel may experience modest shortages of between 10% and 20%, others such as dysprosium, a magnetic material used in most electric motors, could see shortages of up to 70% of demand.
Theodor Lisovoy, Editor in Chief of the European bureau, Rough&Polished
