The mining industry is currently facing a critical supply shortage of key metals, despite a growth in supply over the past decade. According to BloombergNEF’s Transition Metals Outlook, the world needs $2.1 trillion in new mining investments by 2050 to meet the increasing demand for clean energy technologies. This shortage could impact essential metals such as aluminum, copper, and lithium, potentially leading to deficits as early as this year. The scarcity of these metals could result in higher prices for raw materials, making clean energy technologies like EVs and wind turbines more expensive.
Kwasi Ampofo, head of metals and mining at BNEF and lead author of the report, emphasized that prolonged deficits in these metals could drive up prices, hindering the adoption of clean energy technologies and slowing down the overall energy transition. BloombergNEF’s Economic Transition Scenario (ETS) predicts that between 2024 and 2050, the world will require approximately 3 billion metric tons of metals to facilitate the global energy transition. This demand could double to 6 billion metric tons if the goal of achieving net zero emissions by 2050 is pursued, potentially leading to a spike in metal prices and impeding the progress of green technologies.
BNEF suggests that recycling metals could alleviate supply pressures and play a vital role in the supply chain, ultimately reducing emissions from production. Allan Ray Restauro, a metals and mining associate at BNEF, highlighted the importance of government policies in ensuring the success of the industry. Establishing collection networks, setting recovery rate requirements, developing frameworks for tracing individual cells, and managing second-life batteries are essential steps that governments need to take to build a robust system overseeing the full lifecycle of battery metals.
As the world transitions towards a low-emissions economy, resource-rich countries are faced with the challenge of reducing emissions while developing their mining sectors. The mining industry plays a crucial role in supplying minerals necessary for clean energy technologies, yet it also contributes to global emissions, particularly in coal extraction. Countries like Chile are making strides by incorporating renewable energy into mining operations, but many developing nations struggle to balance growth, sustainability, and emissions goals. Governments must implement policies that decarbonize mining while promoting economic growth and meeting targets set out in the Paris Agreement.
The demand for energy transition metals is expected to vary by region, with Southeast Asia projected to be the fastest-growing market for these materials in the 2030s. This surge in demand could benefit the region’s vast mining industry, aiding in industrialization while contributing to global emissions reductions. Conversely, China has outpaced the global average in metal consumption, with its transition metal consumption expected to peak by 2030. In conclusion, a $2.1 trillion investment in mining is crucial to meet the global demand for clean energy. Recycling and supportive policies will be essential in maintaining the momentum of the energy transition amidst tightening metal supplies and rising prices.
In a strategic move to bolster its position in the silver industry, Coeur Mining has announced a $1.7 billion all-share deal to acquire Canadian silver producer SilverCrest. This acquisition will add the high-grade, low-cost Las Chispas mine in Mexico to Coeur’s portfolio, positioning the company to become a major global silver producer with an annual production target of 21 million ounces of silver and 432,000 ounces of gold. The Las Chispas mine, which commenced production in late 2022, produced over 10.25 million silver equivalent ounces in its first full year of operations.
Coeur’s CEO, Mitchell J. Krebs, praised the mine’s strong operational performance and low cash costs of $7.73 per ounce. The partnership will see Coeur holding a 63% share, with SilverCrest retaining 37%. The acquisition price of $11.34 per share represents an 18% premium to SilverCrest’s recent trading levels. Both companies’ boards have endorsed the deal, pending regulatory and shareholder approval, with the closing expected in Q1 2025.
Mexico led global silver production in 2022, producing an estimated 6,300 metric tons, surpassing China, the second-largest producer, with 3,600 metric tons. Peru holds the largest silver reserves globally, totaling 98,000 metric tons, followed closely by Australia with reserves of 92,000 metric tons. The stable silver output in Peru is supported by its extensive reserves and advanced mining infrastructure. The surge in silver prices in 2023, driven by increased demand for solar energy and electronics, has led to significant mergers in the silver mining sector, including Coeur Mining’s acquisition of SilverCrest and First Majestic’s purchase of Gatos Silver for $970 million. Despite supply shortages, Coeur’s acquisition signals hope for the global silver industry.
