Analysts believe two countries will be in the driving seat when it comes to the supply of commodities for electric cars: Chile and the Democratic Republic of Congo
If the Government gets its way, pollution-belching cars will be phased out in favour of electric vehicles by 20352020欧洲杯体育足彩外围app. There’s just one problem: we may not have enough of the metals needed to make the EV revolution a reality.
There could be 56 million electric vehicles globally by 2040, according to some estimates. The amount of metal needed in these vehicles will increase exponentially – with copper, lithium, nickel and cobalt all in huge demand.
Vast quantities of lithium, nickel and cobalt are needed in car batteries. Copper, prized for its thermal and electrical conductivity, could be the biggest winner of all. An electric car requires almost four times as much copper as a conventional vehicle. The metal will also be needed for the thousands of charging points necessary to keep EVs on the go.
Mining giant Glencore2020欧洲杯体育足彩外围app reckons that three million tonnes of copper a year will go into electric cars by 2030, compared to just 0.2 tonnes today.
Where all of this extra material is going to come from is increasingly exercising the minds of governments, miners and carmakers alike.
A2020欧洲杯体育足彩外围appnalysts at Bernstein have crunched the numbers of known supply (or reserves) versus demand, and worked out that two countries will be in the driving seat when it comes to future commodity supply – and whether we can all have electric cars: Chile and the Democratic Republic of Congo.
2020欧洲杯体育足彩外围appChile is blessed with bountiful lithium and copper reserves, while the DRC is the source of three-quarters of the world’s cobalt – and a pretty big supplier of copper, too.
As Bernstein's scribes put it: "We can't have EVs without Chile's permission" and "we can't have EVs without Congo's permission".
While the total reserves globally might be enough to meet demand for EVs, don't forget these metals will still be needed in other sectors and products too, so carmakers will have a fight on their hands to lock down supply.
Chile has a well-established mining industry, but the DRC is an altogether bigger challenge: it is a desperately poor country and an unstable jurisdiction where major mining companies are reluctant to tread.
There are a number of ways to reduce reliance on just two countries – none of them easy. Scientists are looking at substituting metals in batteries by tinkering with the chemistry, but even under a “progressive” model forecast by Bernstein, we will still need plenty of lithium and cobalt.
M2020欧洲杯体育足彩外围appiners could simply dig up more stuff. Unfortunately, discoveries are few and far between, with many of the biggest-producing mines dating back decades.
P2020欧洲杯体育足彩外围apputting a new mine into operation costs billions and can take years, meaning that few companies want to take the risk. Alternatively, high-cost, previously mined deposits could be reopened – if commodity prices rise sufficiently to make them economical.
Commodity prices are not high enough for miners to take the risk on major new projects.
Confusingly, given that its long-term prospects look good, the LME copper price has actually fallen nearly 13pc in the last year. This is mostly because fears of a slowdown in China’s economy – all but certain after the coronavirus outbreak2020欧洲杯体育足彩外围app – mean traders do not think the metal’s short-term future is very bright.
A supply crunch could eventually catch up with the market, pushing up prices across the board – and threatening to slow the rollout of electric cars just when we need it to accelerate.