FMF2024 REPORT : USD5.4-TRILLION IN MINERAL INVESTMENT NEEDED FOR ENERGY TRANSITION BY 2035
The Future Minerals Forum ( FMF ) released its latest report in partnership with leading industry think tanks on 4 December 2024 . The FMF2024 Report : “ Shaping the Future of Minerals ”, offers critical insights into creating shared value across the mining ecosystem .
According to Ali Al-Mutairi , executive director of FMF , “ The report provides authoritative content that tackles the tough issues facing the supply of minerals and aims to spark debate on the way forward at FMF in January 2025 .”
“ The Super Region has significant untapped potential in minerals that can drive the global energy transition . However , the report shows that capital investment of USD5.4-trillion will be required to sustain and expand global mining and processing facilities – nearly the equivalent to the combined GDP of Japan and Spain ,” Ali Al- Mutairi added .
The report features insights from internationally recognised advocates for the minerals sector including Mark Cutifani , chair of Vale Base Metals and Dr Michelle Foss , Fellow of Energy at the Baker Institute , Rice University as well as leading experts from CRU , Wood Mackenzie , Global AI and Clareo-DPI .
In the report they explore :
• The contribution of minerals to society
• The value proposition of the sector for supplier countries
• Resource depletion and the need for significant investment to achieve development and the energy transition
• The need for new forms of partnership to unlock funding
• How the benefits of mining can be equitably shared with host countries and communities
• Addressing perceptions of mining that can reduce societal acceptance and hamper investment
Key insights include :
• Capital investment of USD5.4-trillion will be required to sustain and expand mining and processing facilities – USD500-billion more than the previous decade ( 2012-2023 vs . 2024-2035 )
• More than 90 % of the mass move involves coal , iron ore , copper and gold :
◦ Over 70 % of total capital will be needed for these four commodities , with roughly 75 % of it dedicated to sustaining existing assets .
◦ The steel value chain alone is estimated to require about USD1.6-trillion in sustaining capital expenditure
• For some critical minerals the mining phase is where most value is generated for countries : 70 % of the value generated from cobalt is in mining ; 68 % for graphite ; 54 % for lithium .
• Regions like Asia Pacific , India , Latin America , and Sub-Saharan Africa will require over 40 % of total capital investment , reflecting a shift in capital flows to emerging markets .
• Production of cathode materials , battery cells and battery recycling could produce around USD800-billion in annual revenue by 2040 .
On building shared value propositions in the mining industries , Cutifani says , “ In the end , partnerships for shared , durable value creation and commitment to supporting commercial frameworks can go a long way toward meeting and exceeding key stakeholder expectations .”
Addressing the vital role of collaboration , Ionut Lazar , a principal consultant at CRU adds , “ Collaboration across sectors is essential to meet global decarbonisation targets – it cannot be achieved by a single entity . It is a global , multi-stakeholder challenge that requires strategic collaboration , especially if we want to move at pace and achieve the desired scale .”
Furthermore , the report highlights the importance of policies centered on GDP growth , job creation and export enhancement as essential for countries aiming to boost value addition .
Patrick Barnes , global head of Metals and Mining Consulting , Wood Mackenzie explains , “ Value addition can provide countries with a range of well-known benefits : increased GDP , more fiscal revenue from a larger tax base , increased export earnings from higher-value products and creation of direct and indirect jobs . But countries cannot afford to proceed blindly . Their plans have to take into account the real market dynamics , costs and benefits if they want to compete for investment and actually realise value ”.
For Peter Bryant , co-founder and board chair , Development Partner Institute and board chair , Clareo , the role of government and industrial policy cannot be overstated : “ To date , the minerals industry has not prioritised shared prosperity effectively , resulting in a breakdown of trust with governments and local communities . However , the industry is at a turning point . Companies are taking on the responsibility of creating shared value , collaborating with new partners and at a deeper level . Government plays a key role in creating shared value by providing the springboards to investment and not being overly prescriptive ."
Dr Foss also emphasises the role of government in building shared value , “ While the mining industry can do much to help build and boost local and regional benefits , responsibilities lie with government jurisdictions to ensure that benefits linked to economic rents – revenue streams from taxes and royalties – are allocated in ways that build trust .”
Richard Rothenberg , chief executive officer , Global AI Corporation adds , “ As the demand for critical minerals continues to grow , policymakers and investors should prioritise sustainable practices , community engagement and transparent governance to ensure long-term success and positive public perception .”
To view the FMF2024 Report : “ Shaping the Future of Minerals ” go to : https :// www . africanmining . co . za / research-papers / •
Source : supplied by the Future Minerals Forum www . africanmining . co . za African Mining Publication African Mining
African Mining • January 2025 • 59