Rating agency sees industry well equipped for necessary investments. Long lead times for projects present challenges.
According to the rating agency Fitch, the energy and transportation transition will significantly increase demand for metals such as copper, cobalt and lithium. Both application areas require significantly more of these and other raw materials, such as rare earths. Fitch also cites figures from the International Energy Agency (IEA), which expects demand for minerals to increase sixfold by 2050 compared to today. Fitch expects global demand to peak in 2040, when most of the infrastructure needed for the energy transition will have been built.
Supply gap expected from 2025
The supply of raw materials will not be able to meet the increased demand in all cases, as mining projects sometimes have very long lead times; this applies in particular to copper, cobalt and lithium. New projects would gradually come on stream, but the rating agency still expects supply gaps after 2025. The financial resources needed to bring new mines on stream are basically available, but if prices for certain commodities remain low for a longer period of time, this could impact investment decisions and thus future supply. Another problem could be the shortage of labor that the industry is currently facing (we reported).
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