Meeting the Critical Demand

In the Deloitte report “Tracking the Trends 2021,” Dr. Adriaan Davidse, director consulting, Deloitte Canada, and Dr. Jacek Guzek, associate director consulting, Deloitte Africa, write about meeting demand for critical minerals and green energy. And they make some good points.

They state rightly that renewable energy sources, accelerated adoption of electric vehicles and a general move toward increased electrification are all aspects of the global move toward the future of energy, which promises to drastically alter the demand dynamics of the mining industry.

This will present new opportunities for mining companies, but it will take a rearrangement of priorities. First, there will need to be regulatory support to diversify the supply chain for critical minerals.

China has made dominance of mineral markets a strategic priority, giving its companies government support to capture market share. President Joe Biden’s recent executive order on supply chains calls for an immediate 100-day review of four critical sectors: pharmaceuticals, critical minerals, semiconductors and advanced batteries like those used in electric vehicles. The mining industry needs the support of its government to keep the supply chain flowing.

Globally there is no denying the move to a climate-neutral future. So which commodities will be the stars of such a future?

Dr. Davidse and Dr. Guzek said, “Ramping up renewable energy generation is bound to heighten the need for nickel, cobalt, lithium, heavy rare earths and copper. That list would further include graphite and manganese if lithium-ion batteries win the race for supremacy of the EV market. Redox flow batteries – just one proposed alternative to lithium-ion batteries in stationary energy storage applications – would require greater supply of vanadium and zinc. Conversely, if hydrogen fuel cells gain greater traction, demand for platinum seems likely to spike.”

The climate-neutral future is coming. With a clear view of future market possibilities, many mining companies will have a better idea about where to allocate investment dollars and will better be able to chart a path to greater profitability.