A Comparison of Minerals Used

Nickel and copper are two metals that will play crucial roles in the transition to a greener future. Global demand for these metals is expected to skyrocket, thanks in part to the rise of electric vehicles (EVs) and energy storage applications.

According to experts at the recent Future Of Mined Commodities Forum, while stainless steel remains the primary first use for nickel, batteries will be the primary engine of demand increase over the next two decades. Battery utilization is predicted to expand from 7% of the whole market in 2021 to 40% of nickel use by 2040. This increase will more than quadruple global nickel demand to six million tonnes per year. The relevance of energy storage in enabling greater usage of renewables will also play an important role in boosting demand.

Supplying rising nickel demand will be difficult, especially in an ESG-constrained world. Analysts estimate that an additional 1.65 million tonnes of nickel will be required for production between 2026 and 2038, with recycling playing a significant role in bridging the gap. Our current expectation is that EV recycling will recover 20% of the nickel demand for EVs by 2040.

Similarly, copper is finding new applications in green technologies such as EVs, offshore wind, and solar. While copper has been used for thousands of years for its beauty and other features, its ability to conduct electricity will be the key driver of rising demand over the next 20 years and beyond. Experts predict that electrical applications in green technology will account for 40% of future demand growth.

Furthermore, copper’s environmental credentials extend beyond its involvement in low-carbon end users. The carbon intensity of producing finished copper is only one-quarter that of aluminum, and a major number of planned copper mining projects throughout the world will use low carbon intensity power sources.

For example, hydropower is nearly entirely used in Zambia’s Copperbelt and the Democratic Republic of the Congo. In Chile, up to 50% of electricity is generated by hydro, wind, or solar, with over 90% of new capacity expected to be renewable. Recycling will also play an important part in meeting future copper demand, with recycled feedstock expected to supply six million tonnes of the 16 million tonnes of additional total copper demand over the next 20 years.

To bridge potential supply shortages, the mining industry will need to change significantly to meet rising demand for nickel and copper. Because there are no new nickel mining projects being developed outside of Asia, battery producers will have to rely on recycling to fill the void. Furthermore, government measures and regulations will be required to encourage and propel recycling ahead.

The industry’s task is to ensure that supply of these vital metals maintains up with rising demand. The present prediction suggests a need for an additional 1.65 million tonnes of nickel to be produced between 2026 and 2038, according to analysts. Similarly, a 10-year supply shortfall of up to five million tonnes of copper will exist until 2031. To meet this demand, major investment in new processing capacity will be required in North America, Europe, and Asia.

One of the most important aspects to examine is the environmental, social, and economic consequences of mining these metals. The great majority of new capacity expansion in the last decade has occurred in Indonesia, with substantial environmental consequences. Current vows by Indonesia to restore deforestation and halt the expansion of coal-fired power plants would make replicating these growth rates extremely difficult. Thus, it is vital to guarantee that the mining industry follows ESG best practices to limit the impact on the environment. Regionality and legislation will also be important factors in boosting nickel recycling. In Europe and the United States, there is an increasing emphasis on using locally produced raw resources. Battery recyclers in the United States are establishing factories near cell scrap generation, which will help to minimize Scope 3 emissions. Yet, government measures and regulations will be required to encourage and propel recycling ahead.

The move to a greener future is expected to fuel exceptional growth in demand for these important metals in the coming years. While recycling will be critical in satisfying demand, the mining industry will also need to change in order to bridge potential supply gaps. Governments will need to support and promote recycling activities in order to reach a cleaner future, while also ensuring that mining adheres to ESG best practices in order to reduce environmental effect.

The move to a greener future is advancing, and demand for essential metals such as nickel and copper is likely to skyrocket in the coming years.

Nickel and copper are both important components of electric vehicles, which are growing more popular as buyers seek to lessen their carbon footprint. Furthermore, considerable volumes of these metals are required for renewable energy storage applications.