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Beyond the Battery Criticals and the Green Energy Transition – Megacities to Drive Metals Demand

By now it has been well established – and we have covered this fact on numerous occasions — that the global push towards net zero carbon will require massive amounts of metals and minerals underpinning renewable energy technology supporting the shift.

Here, the mainstream media largely focuses on covering material needs to achieve climate goals –which often means that the emphasis is on battery critical materials Lithium, Cobalt, Graphite and Manganese – and Nickel, as it ascends to the U.S. Government Critical Minerals List –  as well as on the Rare Earths.

Via a new infographic by Visual Capitalist comes a reminder that it’s not just these materials we need to focus on, and that, while it is of course a major factor, other drivers beyond the renewable energy transition are sending demand scenarios for metals and minerals to unprecedented heights.  As Visual Capitalist’s latest posits, “the expansion of megacities will boost metal markets.” 

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Writes Nicholas LePan for Visual Capitalist:

“As developing economies grow, millions of people are moving to cities to pursue opportunities compounded by proximity and availability to resources. Many of these people see their economic circumstances improve, and consumption increases as a result.

Cars get more numerous, electricity and public transport networks expand, and consumers buy more electronic products for their homes. All of this means more steel, more copper, more aluminum, and more cement are needed.”

Using data from Swann Group’s Swann Index, Visual Capitalist shows Nickel demand estimated to rise from 2.4 million tonnes in 2019 to 5.2 million tonnes, in 2035, which would amount to an increase by 116%.

For Aluminum, Swann sees demand increased by 57%, from 66 million tonnes to 103.6 million tonnes in 2035.

Owing largely to the expansion of decarbonization technology, as well as the transition to electrification and automation, analysts see demand for Copper increasing by 26%, from 23.6 million tonnes in 2019 to 29.7 million tonnes by 2035.

As LePan writes, while for now Asian and primarily Chinese megacities are leading demand, projection of future population growth indicate a shift  towards the African continent, which according to some estimates, is home to 17 of the 20 fastest growing cities from 2020 to 2025.

All of which is to say that as stakeholders move to devise resource policy, it is more important than ever to keep an eye on the big picture.

We are facing a world with increasingly complex and daunting geopolitical tensions which in turn impact mineral resource supply scenarios (see our recent coverage on the geopolitics of resource supply here).

For the United States to remain competitive, U.S. critical mineral resource policy must be measured against two overarching imperatives:  It must be comprehensive, ensuring that all metals and minerals underpinning 21st century technology are appropriately accounted for – and it needs to focus on the entire value chain, from mine to manufacturing.  We can, and should, harness partnerships with allies, expand recycling capabilities and work on “closed-loop solutions,”–  but we will not be able to meet vastly increasing mineral needs without leveraging and expanding domestic production and processing capabilities.