The current metals “super-cycle” that is a major component of the global energy transition could stall due to a gloomy global macroeconomic environment, geopolitics and lack of investment in new factories.
Wood Mackenzie’s study stated $200bn of new mining projects are required by 2030, as well as well as more efficient and creative methods of recycling existing scrap metals.
Nick Pickens, Research Director of Global Mining at Wood Mackenzie, said: “A 7-10-year lead time for new mining projects makes meeting supply/demand requirements difficult.
“Combined with mid-term uncertainties for demand and metal prices, the situation does create some serious headwinds for the metals super-cycle.”
Pickens added that copper markets would continue to be volatile as end-users clamoured for the metal to support increased electrification.
“Products such as copper wire rod and electrodeposited foil are used extensively in the manufacture of electric vehicles [EVs] and renewable energy equipment,” Pickens said.
“This means investment in support infrastructure to underpin copper end-use demand is essential moving forward.”
Pickens added that new projects were required to meet long-term demand, but scrap copper will also play a pivotal role for a long-term solution as it offers lower carbon intensity than new copper.
The booming demand for battery raw materials has seen markets become increasingly volatile Sue Shaw, Head of Energy Transition & Battery Raw Materials, at Wood Mackenzie, said.
Shaw said: “Prices for battery raw materials will remain volatile, but future cycles are becoming more sustained as markets are showing signs of maturing.
“The pressure to deliver is huge even with recycling.”
Bulk commodity price weakness will contribute to a fall in mining companies’ profits in 2024 according to Wood Mackenzie forecasts.