If you want to generate, transmit, store or use low carbon energy, you need significant amounts of metal. Vast quantities of copper or aluminium are required for the wires to transmit that energy, while if you want to store it, you need battery metals such as nickel, cobalt and lithium. Yet despite growing acceptance of the need to transition to a low carbon economy, there remains a huge reality gap in terms of understanding and accepting the consequences at a practical level.
Western governments are doing a great job of stimulating demand for EVs and renewable energy, yet the expectation is largely that supply of the raw materials required will take care of itself. In reality, the looming supply gap can only be filled by investing in countries with significant ESG risks and extended lead times.
While the West ponders and debates the problem, China is getting on with making itself the dominant force at every stage of the global battery raw material supply chain, from extraction through refining to manufacturing. That creates a situation in which we may end up having to go cap in hand to China to supply the raw materials for our energy transition – to find the answer is ‘no’.
At a recent talk for McInroy & Wood Personal Investment Managers, I explained the realities of the supply chain for energy transition metals and why ultimately only policy and society can drive the changes needed to ensure sufficient supply of these vital commodities. You can watch an edited version of my presentation below.
Watch the replay
Does the energy transition start and finish with metals?
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