Dash for $10 Trillion of Metals for Energy Transition Starts Now
Comment of the Day

February 10 2023

Commentary by Eoin Treacy

Dash for $10 Trillion of Metals for Energy Transition Starts Now

This article from Bloomberg may be of interest. Here is a section: 

Getting to net zero could require almost $10 trillion of metals between now and 2050, according to BNEF, with annual demand peaking at close to $450 billion in the mid-2030s. While steel and aluminum are expected to see the most demand growth in terms of absolute volume, copper is set to be the most valuable opportunity, with an estimated $3.4 trillion of the red metal needed to avert climate disaster.

In total, a whopping 5.2 billion metric tons of metals will be necessary to underpin a net-zero transition, with nearly four times as much metal due to be consumed in 2050 versus today.


Eoin Treacy's view

I continue to be amazed at how the word trillion is bandied about when it comes to spending plans for renewable energy. In 2020 total global copper consumption was 23.6 million tonnes and is probably around 25 million this year.

5.2 billion is 208 times larger, even if you divide that by 27 years between now and 2050 you get 7.7 times. Increasing global copper supply by 10% is a mammoth task and might take a decade.

Increasing it by 770% would require mining on a global scale that would make the old ‘49ers blush and even then, would not achieve the stated goals of decarbonization. The simple conclusion is decarbonization is not going to happen or if it does the solution will not rely on copper.

Inconvenient logic is not going to get in the way of people adhering to whatever idealism they find comfortable. Money will still flow into renewables but the fossil fuel sector is not going anywhere.
Copper continues to unwind its short-term overbought condition and will need to hold support near $3.90 if the benefit of the doubt is to be given to the upside.
Uranium miners continue to exhibit first step above the base characteristics. 

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