Bloomberg: Copper, battery metals heading for supply shortage

Two reports produced by the BloombergNEF (BNEF) research business unit of that global company point to nonferrous metal markets destined to be short of supply for the next decade or more.

Although mining capacity is a key focus of the report on copper and a second one on battery metals (cobalt, lithium and nickel), the forecast points to ongoing high prices for recyclers and continued investment in nonferrous metals recycling capacity.

A mid-August Bloomberg summary of the copper report starts off by stating, “The world may have to rely on new recycling technologies to prevent shortages of copper as the shift toward clean energy supercharges demand for the wiring metal.”

The report says Sung Choi and fellow analysts at BNEF are forecasting annual copper demand as being “set to expand 53 percent to 2040, mainly driven by the electrification of transport and infrastructure.”

On the supply side, the BNEF analysts say primary supply might increase just 16 percent thanks to the difficulty of expanding existing copper mines or creating new ones. Narrowing a projected shortfall of from 5 million to 14 million metric tons by 2040 mgiht be a lot to ask of recyclers.

However, access to the red metal already could be driving increased investments in copper recycling in nations with developed economies. Recycled-content copper investments underway in the United States include those by Igneo Technologies LLC in Savannah, Georgia; the Aurubis AG facility in Augusta, Georgia; a plant in Shelbyville, Kentucky, being built by the Wieland Group; and the Ames Copper recycled-content anode plant in Shelby, North Carolina.

Bloomberg quotes the BNEF analysts as writing, “Investing in technologies related to recycling, lowering costs and improving recovery rates from low-grade deposits could help bring new copper supply online to meet growing demand.”

On its website, BNEF also hosts a late July blog post titled, “Race to Net Zero: The Pressures of the Battery Boom in Five Charts.” As with copper, BNEF points to “soaring demand [that] comes up against supply constraints” for battery metals including cobalt, lithium, manganese and nickel. “Lithium, nickel and manganese could all see technical supply deficits this year."

BNEF adds, “Raw materials availability is the biggest constraint for the production of lithium carbonate and hydroxide [and] the lithium industry could struggle to meet growing demand from electric vehicles (EVs) unless new projects are ramped up quickly over the next two years."

Harvesting lithium from end-of-life lithium-ion batteries has been one of the most active investment sectors for several years. One recent investment in the sector in Kentucky entails $310 million initially, with the potential to grow to $1 billion.

The analysts also say if cobalt is a bottleneck, nickel could be eyed as a substitute material. “Cobalt use in lithium-ion batteries has evolved over the last three years as a result of the higher prices recorded in 2018 and the ethical concerns automakers have around supply from artisanal miners in the Democratic Republic of Congo,” says Kwasi Ampofo of BNEF. “These concerns have resulted in a shift to less cobalt-intensive battery chemistries or those without cobalt.”

That, too, would likely require recycling investments, as most nickel currently goes into stainless steel and is recycled back to stainless steel at mills around the world. Nevada-based Aqua Metals is among several companies piloting technology to make nickel sulfate from spent batteries.

While not mentioning recycling specifically in the blog post, BNEF writes, “As demand for EV batteries grows, countries are racing to become more self-sufficient and build their own domestic supply chains.”