How EV Industry will Fuel the Growth of mining and metals sector

In 2020, the total mineral requirement for electric vehicles and battery storage was 0.4 Mt. According to the IEA's Sustainable Development Scenario (SDS), demand would increase by more than 30 times by 2050, reaching 12.7 Mt. If the forecast is predicated on a climate-driven net-zero scenario by 2050, demand will increase by more than 40 times. Lithium is predicted to grow the fastest of all the minerals, followed by nickel and graphite.

Aluminum and Copper will be the Key

How much an EV weighs is a critical factor in its efficiency, which affects its range and appeal to customers. For example, it’s estimated that for every 100kg saved, an EV’s mileage increases by 10% to 11% and reduces battery costs by 20%. When lighter materials, such as aluminum, are used to make EV car bodies, this can help offset the weight of batteries, says EY.

With increasing usage of Aluminum for the production of EV, this metal will be of critical importance. If we consider a midpoint estimate of 250kg per EV with 30 million EVs, the aluminum demand from EVs only will equate to 7.5mt by 2030.

Speaking about Copper, there is about five times more copper in an EV than in an ICE vehicle. This means that, if 30 million EVs are produced in 2030, an additional two million tonnes of copper per annum will be required by that point. Copper will also be required for new charging ports and infrastructure, increasing overall demand by 12% to 15%, states EY.

This rise in demand, along with growing production costs and declining ore grades, is anticipated to drive copper prices higher and lead to a hunt for alternatives. There is currently no direct equivalent for copper, however researchers are exploring using aluminum instead of copper in some applications to save money.

While continuous battery technology improvement is anticipated to have an influence on copper consumption, overall copper demand from the mobility industry is predicted to treble in the next decade.

The Future Roadmap

In a report in the journal Nature Reviews Materials, British earth scientist Richard Herrington points out that by the year 2035, there could be 245 million battery electric vehicles on the road. In addition, there will be a huge demand for stationary batteries needed for energy storage to compensate for the less consistent output of clean energy sources such as wind and solar.

The rise in the demand for the battery components will lead to increased extraction of the key materials like lithium. However, this in turn can deliver an adverse effect to the environment as well. For example - The world's second-largest producer of lithium (after Australia) is Chile, where the metal is obtained from salt brines in the Atacama Desert. The locals living around there are in an ongoing dispute with the mining companies claiming the operations, which use a lot of water for extraction, could have a serious impact on the delicate ecosystem of the driest desert on Earth.

To avoid some of these issues, the key to meeting this rising demand, effective recycling will relieve pressure on mining.