Modern Mining November 2024

COMMODITIES OUTLOOK

Faster capital deployment will be needed to service critical raw material demand Despite increased focus being placed on achieving global decarbonisation agendas, approximately 60% of the world’s electricity is still produced using conventional fossil fuels. To facilitate a greater renewable energy component, a huge amount of capital needs to be deployed in a short space of time to ensure that the supply chains for the ‘critical’ raw materials required by these technologies remain robust. As things currently stand, investment in new critical raw material projects outside of China has been slow to materialise, leading to a widening of the gap between notional demand and plausible achievable supply. Failure to address this quickly will have a dual impact, simultaneously handicapping the West’s ability to achieve sustainability objectives as well as increasing exposure to Chinese supply, which raises geopolitical over-reliance issues the world is trying to move away from. T he need to find sufficient financing solutions fast is emphasized by the fact that global primary energy consumption is anticipated to rise from around 175 000 TWh per year By Callum Ross, Consultant at CRU Group

today to 187 000 TWh per year in 2040, with an increased proportion coming from electricity. This will inevitability lead to an increase in demand for the so-called critical raw materials used in solar and wind energy generation, as well as battery storage. A breakdown of the specific material requirements for each of these technologies is discussed below: Solar: Solar Photovoltaic (PV) energy already accounts for ~5% of global electricity production, with CRU expecting that this will rise to ~26% by 2040. Substantial quantities of silicon metal are consumed in the manufacture of polycrystalline silicon, which is used in the production of semiconductors for the electronics industry and, importantly, in PV panels. To meet silicon metal demand outside China and the CIS by 2028, CRU forecast that 9-11 new projects will be needed in addition to supply that already exists or is expected to come online. However, the power requirements to run a silicon smelter are vast, with 12-15 MWh required per tonne of silicon. When powered by coal, this translates into 10-15 tCO2/t of silicon, on

Callum Ross, Consultant at CRU Group

Figure 1: Silicon metal demand from solar PV manufacturing excl. China, kt/y, 2020-2028. SOURCE: CRU

top of the 5 tCO2/t that is emitted from the use of carbon reductants in the smelting process. This makes attracting investments for greenfield developments problematic in regions that do not have access to cheap renewable power at a suitable scale. Wind: As with solar, CRU expects a significant rise

14  MODERN MINING  www.modernminingmagazine.co.za | November 2024