Critical commodities demand is ever increasing, with bottlenecks slowing down necessary production growth. What are the solutions?
The energy transition is currently underway all around the globe, and people and businesses are collectively switching sources of their consumed energy to more sustainable options. However, this fundamental restructuring requires an ever-increasing volume of inputs, vastly coming from natural resources that have earned a label of criticality for their scarcity and supply uncertainty. Therefore, with the increase of consumption, there needs to come a necessary increase of production. But where is this going to come from, and how can we resolve the scarcity issue?
Over the next 20 years, demand for critical commodities is going to increase significantly. Even though each region defines a slightly different set of commodities critical for them, there is an intersection area represented by a handful of materials that will play a dominant role in the energy transition.
The most prominent ones are copper, nickel and lithium. The issue to resolve is how and where to source the materials and how to increase production quickly enough to keep up with both global and regional energy transition plans. Fortunately, every big problem also presents a big business opportunity. The most effective resolution to this global issue is to gather investment and direct it into increasing production, so part of the answer is “invest.” Still, the second part of the question remains – invest where?
Markets that are established as favourable to mining and FDI absorption are a first choice. One of these markets is Australia, as globally, it is the second most attractive mining investment target region. There are currently over 100 mining projects waiting to be brought into the production stage. It is an overwhelming amount of projects with regional nuances based on state approaches, legislation or bureaucratic processes that can all affect speed and rate of investment return.
This is where the Capacity Investment Map Australia comes into play. CRU+ has produced a report mapping critical materials projects in Australia across cobalt, copper, lithium, manganese, nickel, rare earths, tin and vanadium. It is designed to give the reader an overview, making them aware of the important factors before deciding whether and where to invest.
The report delves into topics such as expected increases in critical minerals consumption, mining business and costs inflation in Australia, economic outlooks for Australia and China, and state-by-state policy and mining development ranking. It aims to give the overwhelming number of projects a structure, with ranking of their development stage, capacity and location in jurisdictions. If investing in critical material is something that would be a good fit for your personal or organisational investment portfolio, email the lead author of this study, Simona Nenickova, at simona.nenickova@crugroup.com, and we will be happy to explore this topic further with you.
