White paper “How can super regions achieve the energy transition?” written in collaboration with the Future Minerals Forum. ” provides a roadmap for how the superregion can become a global force in mineral production and related clean energy technologies.
Wood Mackenzie estimates that around $400 billion in capital spending will be needed by 2030 to mine, refine and smelt critical minerals to close the gap between supply and demand and limit global temperature increases to 1.5 above pre-industrial levels within the range of °C.
“Creating a mineral super-region provides a unique opportunity for countries in the region to work together, leveraging existing resources and expertise,” said Julian Kettle, co-author of the white paper and senior vice president of research at Wood Mackenzie. “The region can become a global leader in mineral production and related clean energy technologies, countering China’s dominance of the energy transition ecosystem.”
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The white paper adds that unlocking the potential of super regions requires a combination of four key variables: resources, capital, demand and skills. If the superregion can work together on all four variables, it can become a powerful metals and mining powerhouse, driving the energy transition and economic development. “
Africa has unparalleled natural resources
The white paper states that Africa is clearly a global leader in minerals necessary for the success of the energy transition. With 79% of the world’s cobalt reserves, 44% of the world’s manganese and 21% of the world’s graphite, as well as significant resources for many other minerals including copper and tin, the continent’s potential is unparalleled.
However, the continent faces strong headwinds due to its underdeveloped financial ecosystem, underdeveloped infrastructure and the reluctance of many African countries to invest.
Middle East provides funding and experience
The white paper states that the Middle East has the potential to play a key role in the creation and long-term success of the super-region and can provide solutions to some of Africa’s problems. The region is home to sovereign wealth funds that control trillions of dollars and have extensive experience investing overseas in physical infrastructure, sometimes even mining. This expertise can be used to invest in mineral supply chains domestically and across the super region.
The region is also one of the most naturally productive regions of solar energy along with sub-Saharan Africa.
However, the report adds that while the Middle East has access to capital and natural resources, it lacks significant reserves and production.
“The Middle East currently produces 35% of the world’s oil, but not much cobalt, nickel, lithium or graphite,” Kettle said. “This is a clear example of how collaboration within a super region can open up new business avenues.”
South Asia offers huge demand potential
South Asia does not have the financial clout of the Middle East or the rich natural resources of Africa, but as the world’s most populous region, it has huge potential as a super-regional center of demand and production.
The white paper points out that India is expected to add 152 gigawatts (GW) of solar installed capacity by 2020, and sales of pure electric vehicles and plug-in hybrid vehicles in India may also exceed 19 million by 2050, resulting in substantial growth. Growing demand for minerals.
“The emergence of South Asia as a demand center, coupled with a competitive workforce, low-cost capital and easy access to ports, makes it a logical destination for midstream and downstream activities in the mineral supply chain,” Keitel said.