Minerals and metals necessary for the global decarbonisation drive may face significant shortages by 2030.
That’s according to the latest analysis from McKinsey & Company, which suggests meeting the demand for these crucial resources could require an investment of $4 trillion (£3.1tn) by the end of the decade.
The report, titled “The net-zero materials transition: Implications for global supply chains,” indicates that Several minerals, including nickel, are projected to experience moderate shortages of approximately 10 to 20%, while dysprosium, a magnetic material widely used in electric motors, could face shortages of up to 70%.
The study warns that without effective mitigation measures, such supply shortages could hinder the pace of global decarbonisation, potentially leading to price spikes and volatility throughout the materials supply chain.
Michel Van Hoey, senior partner at McKinsey & Company adds: “It’s crucial to ensure the timely scale-up of projects that have already been announced so far, whilst also protecting future demand.
“This will require mining for materials to exceed beyond historical growth rates, while at the same time doubling down on exploration to ensure further scale-up of supply beyond 2030.
“This could mean investment increasing by about $300 billion (£235bn) to $400 billion (£314bn) per year to meet demand.”