The global mining industry will require up to $2.1 trillion in new investment by 2050 to meet net-zero demand for raw materials, a new BNEF report estimates.

Metals are crucial to many of the technologies that will shift the world to a low-carbon economy – everything from wind turbines and EVs to power grids and electrolysers.

According to Transition Metals Outlook 2024, published on Thursday, capital requirements in the Net Zero Scenario (NZS) increase by 31% between 2024 and 2050. Under the Economic Transition Scenario (ETS), this requirement is lower at $1.6 trillion, Kallanish learns.

Though a near-term oversupply of several transition metals has weakened prices and forced miners to curb production at more expensive operations, BNEF warns upcoming supply deficits could threaten the transition. Around 6 billion tonnes of energy transition metals will be needed from 2024 to 2050 in a net-zero emission pathway.

“The prolonged deficit of these metals will lead to higher prices for raw materials, which increases the cost of clean energy technologies. High costs could slow their adoption, and the energy transition at large,” explains Kwasi Ampofo, lead author of the report.

To avoid the expected supply squeeze, investment must be ramped up in both primary metals supply and recycling, BNEF suggests. Lithium, for example, could face a deficit from next year – when EV demand is expected to pick up again. Such a scenario could go on for the next two decades, the report estimates.

BNEF says the copper market is already undersupplied, and that graphite could be in deficit from 2028. Nickel, meanwhile, is expected to be in surplus until 2030, and cobalt until 2040. Manganese is the only battery metal forecast to be in oversupply until 2050.

Production of copper (contained metal) is set to grow 12% from 2023 to 2050, nickel by 28%, cobalt by 60%, manganese by 11% and graphite by 95%. Supply of lithium (lithium carbonate equivalent) should surge 418% in the period, according to the report.

Nickel is set to be the most recycled metal by 2050, with almost 50% of supply coming from secondary production. Copper’s share is estimated at 35%, followed by lithium and cobalt at 15%. Manganese recycling isn’t likely to be representative.

In the ETS by 2050, lithium will need $102 billion in cumulative investment or $174 billion in the NZS. Investment needs for nickel are expected at $40 billion under ETS and for graphite at $17 billion.

“Investment decisions across energy transition markets need to be taken immediately to ensure projects are commissioned well in advance of demand growth, rather than in response to it,” BNEF says. “At the same time, spending must expand and accelerate to align with the anticipated surge in demand and to maintain momentum in the energy transition through to 2030.”