Which key commodities will see an uptick in exploration and development activity within the context of decarbonization?
Copper is the key commodity from an investment perspective due to its broad ranging use, from windings for motors and generators, to cables connecting wind turbines, to grid networks and wiring looms for electric vehicles (EVs).
Nickel is common to all regular li-ion battery chemistries due to its cost-effective corrosion resistance.
Tin is an often-forgotten metal used for soldering electrical connections. The more electrical machinery and control boards we make, the more tin we use rendering the metal critical despite substantial thrifting in recent years.
Lithium is tough to replace due to its effective energy storage and low weight. Most other materials are very much heavier and there are still substantial gains to be made in terms of its capacity to store greater power density.
Neodymium and praseodymium rare earths are critical for permanent magnets. Dysprosium and terbium are also added to preserve the permanency of magnets when operating at high temperatures. While it is possible to run generators without permanent magnets the benefits gained through adding rare earths outweighs their capital cost.
In terms of geography, which mining jurisdictions are set to benefit from greater exploration activity?
There is no particular country or geography in all this. Canada and Australia are working hard to help miners develop new mines in these regions with new lithium mines and new nickel prospects.
China holds almost all the cards when it comes to critical raw materials supply
There will probably be more copper mined along the Andes from Colombia to Chile, particularly with a new focus on exploration for copper and gold in Ecuador and Colombia.
Zambia, Botswana, and Namibia are also popular destinations for explorers while braver folk with deeper pockets are active in the Democratic Republic of Congo.
Copper is one of the most important commodities for the energy transition. Are there enough quality copper projects currently in operation to meet demand, or is more exploration necessary?
Copper production is likely to fail to keep pace with new demand for EV chargers, wind and solar farm connections, and the cabling for new EVs. New discoveries in Ecuador, Chile, and Zambia are a long way off production and developers may be encouraged to accelerate their plans if prices rise appreciably from here.
Despite the move towards cleaner sources of energy, such as the use of hydrogen, there is still likely to be a need for metallurgical coal for the manufacturing of steel. Do you think this will only be a short-term scenario, or is hydrogen the energy source of the future for steel production?
Hydrogen may well prove to be the energy source for the future of steel production but it is early days and it will take many years to phase out metallurgical coal if this is ever achieved. Ultimately steel production should move to electric arc furnaces recycling steel, as structures are replaced, but again this is likely to take decades.
Several countries, including Canada and the U.S., and also the EU, are seeking to establish supply chains away from China’s present dominance. Do you see this process accelerating and spreading to other jurisdictions and regions?
China holds almost all the cards when it comes to critical raw materials supply. Europe and the U.S. have failed spectacularly to enable mine production, smelting and refining of most critical raw materials and now feels vulnerable to Chinese political demands.
Canada and Australia have done the most to catch up, with Australia selling much of its mine production to China, effectively handing the ball to the Chinese. Japan is extremely concerned, particularly following previous threats from China to withhold rare earth supplies, but appears to have done little to protect its supply chains.
The best solution is to develop new and cleaner “hydrometallurgical” refining processes to bypass traditional smelting and refining, but the technologies are still being developed for larger scale production.
Currently, is there enough mining activity globally to satisfy a prolonged increase in demand for metals?
The very rapid, planned development of EV manufacturing, renewable energy projects, and charging networks is going to demand more production than is currently planned across nearly all critical raw materials.
Existing mines will struggle to expand to meet the demand and new mines will have to be financed across a range of metals to even start to catch up with the supply demand imbalance in many areas.
