Friday Facts:  Clean Energy Transition Linked to Mining Renaissance 

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Today’s Key Takeaway: “To sustainably meet increased demand for minerals, the United States, regional partners, and mining companies should align incentives and reconcile the tension between the need to expand production with the environmental and social considerations of affected communities. It is therefore imperative to increase mining production, both at existing mines and in new mines, while ensuring that mining is socially licensed and generates inclusive economic gains for countries and communities.

The Indispensable Industry: Mining’s Role in the Energy Transition and the Americas
Ryan C. Berg, Henry Ziemer, Center for Strategic & International Studies, January 24, 2023

The modern economy hinges on mining. From the inner workings of computers and chips to the batteries inside cars, to industrial power generation and distribution, metals and minerals extracted from the earth directly touch the lives of countless individuals. As the United States and international community look to spur a transition to clean energy and mitigate the effects of climate change, demand for these resources will skyrocket. A myriad of estimates all point to the need for a dramatic uptick in mining in the near to mid-term. The World Bank projects the need for a 500 percent increase in graphite, cobalt, and lithium production by 2050. In 2022, one estimate claimed that approximately 700 million metric tons of copper would be needed over the next 22 years to reach sustainable economic growth targets—roughly the equivalent to what has been mined over the past 5,000 years of human history. Still other projections find that more than 300 new mines extracting critical minerals will be needed by the year 2030 to prevent a crippling supply shortage.

These estimates are rooted in a sanguine assessment of the requirements of achieving ambitious environmental and climate goals. The landmark study from S&P Global on the future of copper cited above bases its projections on the Paris Climate Agreement and the goal of net zero emissions by 2050. These analyses underscore a key insight—that the transition to clean energy is inextricably linked to a renaissance in mining, and more broadly, a renewed focus on the entire mineral supply chain. Indeed, virtually every technology seen as critical to the green revolution, from electric vehicles (EVs) to solar and wind power, demand far greater inputs of minerals and metals than traditional carbon-intensive methods. In the United States, the average American is already estimated to consume around three million pounds of minerals, metals, and fuels over their lifetime, a number which will in all likelihood increase as the energy transition continues to accelerate.

Another common thread visible in recent studies of the mining industry is that the world remains largely unprepared to meet the dramatic uptick in demand for minerals. There is little sign that the supposed 300 new mines needed to meet clean energy needs for cobalt, graphite, lithium, copper, and vanadium will be anywhere close to operational by 2030. Indeed, only approximately 25 bona fide greenfield mineral discoveries are made each year, with only a fraction of these attracting enough interest and financing to become a new mine. Increasing mineral supply is further complicated by the long time horizons required to move from identification of a mineral deposit to extraction, as well as the significant negative externalities mines impose on nearby communities.


Visual Capitalist, January 17, 2023