How net zero targets will affect mining jobs over the next few years
What does global demand for battery minerals like lithium mean for mining industry jobs in Australia?
The demand for minerals like lithium, cobalt and copper, which are essential to the technologies needed to decarbonise the global economy, is likely to outstrip supply as early as 2024, a new report finds.
Analysts at S&P Global have released their 2023 Metals and Mining Industry Outlook, shining a spotlight on rare-earth elements and other “battery metals” which will be essential to the transition away from fossil fuels.
The report points to government incentives and policy mandates leading to an increase in the sales of passenger plug-in electric vehicles by 28.1% (compound annual growth rate) globally through to 2026. That might be good news in the mission to reach net zero, but the report says, “battery component supply pipelines will struggle to keep up with such a sharp rise in demand”.
“Our assessment of developing lithium assets foretells healthy growth in 2023, but a failure to meet demand expectations as early as 2024,” S&P Global’s analysts say.
“Cobalt faces similar challenges, although rising output into 2024 — primarily from the Democratic Republic of Congo — results in a deficit starting in 2025. The anticipated growth in Indonesian primary nickel supply into 2025 will postpone a deficit until 2026, when battery-related demand for nickel is forecast to hit 17.6% of all nickel demand — up from 7.1% in 2021.”
Demand for iron ore, zinc and copper set to be flat
Energy transition efforts will also drive up demand for iron ore, zinc and copper, the report states.
“Yet the narrative is markedly different,” S&P’s analysts said. “Despite additional demand from rapidly expanding solar and wind farm installations, global crude steel production is forecast to be largely flat through 2026, which will contribute to weak demand for seaborne iron ore.
“Refined zinc consumption is expected to rise modestly through the forecast period, with offshore wind farms a key net new contributor. Both commodities are expected to be in surplus as of 2026.”
The forecast suggests demand for refined copper, essential to electric vehicles and transmission networks, will double by 2035. Demand though, isn’t the issue. The issue is supply.
Copper’s supply problem
S&P’s report points to a decade of “limited copper-focused exploration and development”, with only a dozen major copper discoveries globally since 2012. The lack of exploration has been driven by tightening industry exploration budgets and a focus on expanding existing operations as rising copper prices meant lower-grade endowments became more economical to mine.
“With the expansion inevitably leading to lower overall mining grades, many existing operations will be hard-pressed to expand production when faced with higher throughput requirements,” the report states.
What this means for mining jobs in Australia
Australia’s mining industry is far from asleep at the wheel when it comes to the increasing demand for battery metals. In the July-September quarter of 2022, the nation’s non-petroleum mineral exploration hit a record high $1.08 billion, with iron ore, battery minerals and coal the main commodities being sought.
Western Australia alone has seen billions of dollars in investment (including $1.6 billion from the Australian Government in 2021-22) not only in battery minerals exploration and exploitation, but in the value-added supply chain. For example:
- Tianqi Lithium (China), Albemarle (USA) and SQM (Chile) — three of the largest lithium producers in the world) have partnered with Australian companies (IGO, Mineral Resources and Wesfarmers) to build and operate battery-grade lithium hydroxide facilities at Kwinana
- BHP Nickel West is operating a battery-grade nickel sulphate plant, also at Kwinana (which will produce 100,000 tonnes of nickel sulphate a year)
- Other producers, including Lynas Rare Earths and Iluka Resources, are set to establish processing operations in WA.
The WA Government is well aware of the economic opportunities, including the thousands of jobs the battery minerals industry can create in the state. They’ve invested millions in training and upskilling programs, including training packages specific to the battery industry.
You can read more about what’s happening in rare-earth elements, battery minerals and investment in WA in this report, but the point is it’s not hard to see that there will be plenty of job opportunities in the battery minerals industry in Australia, and especially in WA.
Jobs are already being created right through the value chain, from exploration and mining of raw materials, to refining and processing, to downstream activities like cell manufacturing, battery pack assembly, and even battery reuse and recycling.
The problem remains, as the experts at S&P Global point out, not the opportunities for employment but the availability of labour in Australia to fill the roles created.
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