There are several metals critical to green technologies. Copper and nickel are called established metals. Trading in these metals has been taking place for over a century. Then, there are rising metals like lithium and cobalt where there is no established trading on exchanges. However, they have become crucial for their role in green transition technologies. There is likely to be a rise in the demand for certain metals (nickel, copper, and manganese) for their role in a wide array of green technologies. Others like cobalt and lithium are limited to batteries.
The IEA’s “Net Zero by 2050” report estimates that the demand for lithium for use in batteries will grow 30‐fold to 2030 and is more than 100‐times higher in 2050 than in 2020. In addition, the total market size of critical minerals like copper, cobalt, manganese and various rare earth metals grows almost sevenfold between 2020 and 2030 in the net-zero pathway.
The increased demand will need to be matched by supply. A study by IMF shows that many of the metals required for transition, at current production rates, will be inadequate to satisfy future demand. As a result, metals like nickel, vanadium, cobalt and graphite will likely be in short supply. The recent rise in commodity prices is a clear indicator of these shortages.
These metals form a few regions. For instance, the Democratic Republic of the Congo accounts for about 70 per cent of global cobalt output and 50 per cent of reserves.
While the scenario looks difficult, there are two imponderables. First technological change is hard to predict. Second, the speed and direction of the energy transition are likely to be dictated by policy changes.
The road for the shift to net zero will be tough. But it is the only road for the future.
Utkarsh Majmudar 