Modern Mining February 2024

cost of emissions) and coverage (either sectorally or regionally). The USA, for example, does not have a federal carbon tax whilst also being one of the world’s larg est emitters of CO₂. The result is an asymmetric system where businesses in regions like Europe face carbon costs on a much larger scale than elsewhere in the world. To challenge this asymmetry, regula tory levers are now being pulled to level the playing field, like the carbon border adjustment mechanism

(CBAM). The signalling of CBAM com ing into force has had a positive impact, encouraging other regions to consider and develop their own carbon markets. CBAM in Europe and beyond will help to protect the goals of more climatologi cally ambitious regions to support their domestic industries, with its overall impact on global decarbonisation efforts ulti mately depending on how the money is spent.

metals by WMF, with CRU noting actions on some of these commodities including: Copper: According to Gordon, CRU has identified copper as a critical commodity for advancing the decarbonisation agenda with challenges both in forecasting demand and ramping up supply. There is an extremely strong demand growth trajectory for copper due to the energy transition equating to roughly an addition 4.8 million tonne per year by 2033. According to Gordon, this could be moderated by thrifting and substitution (largely to Al e.g., wire and cable, radiator fins) and also by ever improved recycling. Conducting electricity requires very pure metals and recycled copper cannot yet be made sufficiently pure to be used for, if this becomes possible it would relieve some primary demand growth. “From a supply side, we are looking at a sup ply gap of 8 million tonnes in 2033. To put that in perspective, that’s up to 32 new world class copper

Global cumulative solar photovoltaic installations surpassed 1 500 GW at the end of 2023.

The appetite of industrial end users, like automakers and technology providers, to decarbonise their value chain is potentially growing at a faster rate than the regulatory environment, and is perhaps incentivised by the notable step up in government actions which has been seen Metals and Minerals for the clean energy transition As metals and minerals are integral to the decarboni sation agenda; governments and their institutions have identified lists of materials that are considered critical, however, the assessments for some of the minerals required vary. It is important to note that being designated “critical” is an indication of some form of failure in a market and that it should be the aspiration of participants in an industry to work together to keep commodities “core” rather than critical. “The impact of a shortage of a particular com modity on an exporting country vs an importing country can lead to different focus and response– for instance, nickel is unlikely to be critical in Indonesia whereas it might be in Japan. CRU works with the World Materials Forum (WMF) each year to produce a criticality assessment for most of the key traded commodities.” “Market predictability is clearly the most chal lenging area for the critical commodities in the table. This is due to the difficulty of forecasting the rate of the energy transition and the quantity of metal that will be required in, for example, electric vehicles or energy storage facilities. This uncertainty means there is, and will continue to be, a wide spread of possible future demand scenarios.” At the moment copper, nickel, praseodymium, neodymium and tin are considered to be critical

NB: Each of the different indicators is scored between 1 and 3. As such, each element has a cumulative score between 7 and 21. These 5 commodities each score >14 and are designated as “critical”.

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