Minerals and metals required for current decarbonisation trajectories may not meet demand and could require $4tn of investment by 2030.
Latest analysis from McKinsey reveals in The net-zero materials transition: Implications for global supply chains report the supply of many minerals and metals embedded in key lower-carbon technologies are expected to face a shortage by 2030.
The report uncovers materials like nickel are expected to experience modest shortages (approximately 10% to 20%), while dysprosium, a highly magnetic material used in most electric motors, could see shortages of up to 70%.
McKinsey’s study states unless mitigation actions are put in place, such shortages would likely hinder the global speed of decarbonisation. This could lead to price spikes and volatility across the materials supply chain – slowing down adoption rates as customers would be unable to shift to lower-carbon alternatives.
McKinsey senior partner Michel Van Hoey said: “It is crucial to ensure the timely scale-up of projects that have already been announced so far, while also protecting future demand.
“This will require mining for materials to exceed beyond historical growth rates, while at the same time doubling down on exploration to ensure further scale up of supply beyond 2030.
“This could mean investment increasing by about $300bn to $400bn per year to meet demand.”