Despite a decade of expansion in production and exploration, metal supply remains inadequate to meet soaring demand, BNEF’s Transition Metals Outlook 2024 reports.
This supply crunch poses a risk towards the adoption of clean energy technologies. The report highlights that critical energy transition metals, including aluminium, copper, and lithium, may experience supply deficits within this decade, potentially impacting efforts to transition to renewable energy sources.
BloombergNEF estimates that approximately $2.1 trillion will be required for the energy transition metal sectors from now until 2050 to meet the demands of a net-zero emissions world. This significant investment is critical for the extraction and processing of 3 billion metric tons of metals the world could require to facilitate the transition to renewable energy sources and achieve global climate goals between 2024 and 2050.
The figure underscores the financial commitment needed across various sectors, particularly in the extraction and processing of metals essential for clean energy technologies like solar panels, wind turbines, and batteries for electric vehicles.
As Demand Soars, the World Faces a Looming Lithium Shortage
But according to the report, key energy transition metals such as aluminium, copper and lithium could face deficits in primary supply this decade – with lithium expected to face a deficit from as early as 2025. The deficit is attributed to the rapid electrification of transport, which has made lithium demand to expand the most over the coming two and a half decades, with a 17-fold jump between 2023 and 2050, according to BNEF’s Net Zero Scenario.
The report has sounded the alarm over the global supply of critical minerals, including cobalt, platinum, rare earths, and silicon, highlighting significant geopolitical risks due to their concentrated production. A staggering 69-80% of the extraction of these metals occurs in a single region, making them particularly vulnerable.
This concentration becomes even more pronounced when examining refined supplies, with all energy transition metals tracked by BloombergNEF exceeding the 30% threshold by a considerable margin. Such dependency raises concerns about potential supply disruptions that could impede the progress of clean energy technologies.
With supply chains increasingly becoming vulnerable, there is a call for international collaboration, the public-private sector, and intergovernmental alignment to “find the sweet spot between localisation and globalisation that can drive progress towards the security of supply for energy transition metals,” the BNEF states.
Africa is Poised to Become a Key Player in the Electric Vehicle Industry
With Africa holding roughly 30% of the world’s critical mineral reserves, including 55% of cobalt, 47.7% of manganese, and 21.6% of natural graphite, UN Trade and Development Secretary-General Rebeca Grynspan believes that additional deposits of minerals critical to the global energy transition, such as copper and lithium, can power a sustainable energy future.
“Cobalt, manganese, graphite, and lithium are not just elements on the periodic table,” Ms. Grynspan said. “They can be the building blocks of a new era – powering our homes, driving our vehicles, and connecting our world. Catalysing a green revolution that can lift millions out of poverty and create a fairer world.”
But to realise this vision, Ms. Grynspan said, the world must break free from the past and reject the extractive model that has kept resource-rich nations dependent and poor.
“Instead, we must embrace a new paradigm that prioritises domestic value addition, fosters regional integration, and empowers local communities,” she added. A similar view was shared by The World Energy Council and South Africa’s president, Cyril Ramaphosa recently in New York to USA investors, on the sidelines of the UN General Assembly.
But amidst BNEF’s warnings of a critical minerals supply crunch, South Africa has a unique opportunity to capitalise on its manganese reserves through strategic policy initiatives and investments, boosting production and local value addition.
From Kalahari to Cathodes: South Africa could win in the transition
According to Bloomberg, manganese is positioned to play a big role in the energy revolution, with demand expected to increase 15-fold. This explains why global majors BHP and Anglo-American are particularly interested in South Africa’s GNU policy for critical minerals, given that they are the country’s main manganese exporters.
The seaborne trade of manganese from the Northern Cape has led to the emergence of some of the wealthiest and powerful Black Economic Empowerment (BEE) investors in South Africa, exporting raw commodities to large smelters established in the Asian subcontinent, especially in countries like Malaysia, India, and China.
As the world’s leading producer of manganese, South Africa holds over 80% of global reserves, positioning it as a key contributor to this shift. Electric vehicle manufacturers are increasingly exploring manganese-enriched lithium-ion batteries as an alternative, driven by environmental, social, and governance (ESG) concerns associated with cobalt mining in the Democratic Republic of Congo (DRC).
This strategic pivot towards manganese not only addresses supply chain challenges but also aligns with the growing emphasis on sustainable practices in battery production. With the rapid electrification of transportation, manganese’s role in battery technology is set to expand significantly, making it a vital mineral for the future of clean energy solutions.
Leading black mining firms such as United Manganese of the Kalahari (UMK), Kudumane Manganese Resources, Kalagadi Manganese, Assmang, and Tshipi é Ntle Manganese Mining, alongside major players like Glencore, South32, and Anglo American, are well-positioned to benefit significantly from the anticipated surge in manganese demand for battery production during the energy transition. These manganese miners should be muttering silent prayers that Transnet’s rail and port woes, which battered coal exports, will soon be resolved to prevent similar disruptions to manganese shipments.
South Africa’s Manganese Revolution: Moving Up the Value Chain through Downstream Processing
South Africa’s Manganese Mining Company (MMC) has recently announced a significant investment in the production of high-grade manganese sulphate, aiming to meet the growing demand from the battery industry. MMC will construct a 6,000-tonne per annum commercial High Purity Manganese Sulphate Monohydrate (HP MSM) plant in Mbombela, South Africa
While there is still dithering and inertia amongst policymakers, it appears that the private sector may be warming up for a big push towards the transformation of the local automotive industry.
Editor: Fulufhelo-Lloyd Nedohe| @lloydnedohe_ on X
