Critical Metal Demand To Triple By 2030, But Demographics Pose Risks

The energy transition is reshaping the global mining industry, with demand for critical minerals expected to surge over the coming decades. A shift toward renewable energy and electrification drives demand for commodities like copper, nickel, and rare earth elements.

According to BDO's Annual Mining Report, the demand for key energy transition minerals will nearly triple by 2030 and quadruple by 2040.

Copper remains a cornerstone of the transition, as it is the only critical mineral vital for all clean energy technologies, such as solar, wind, electric vehicle (EV) manufacturing, and power grids.

While copper prices hit a record high in mid-2024, they later softened due to weak demand from China's property market. In 2025, forecasts suggest continued price constraints due to high inventories despite the long-term positive outlook.

Merger and acquisition activity has surged – with mining giant BHP unsuccessfully bidding for Anglo American and launching a joint venture with Lundin. Meanwhile, sector leader Freeport-McMoRan is opting for capex-driven internal expansion.

Nickel, a metal essential for battery technologies, has faced a turbulent period. In 2024, an oversupply from Indonesia and China led to mine closures, including those operated by Glencore and BHP. However, a rebound is expected in 2025 as supply surpluses narrow and demand for EV batteries remains strong.

Despite the forecasted price stabilization, industry players remain cautious, with some automakers shifting towards alternative battery chemistries that reduce dependence on nickel.

Zinc, another key transition metal used in wind and solar infrastructure, experienced a sluggish first half of 2024 due to subdued industrial activity but rebounded later in the year thanks to Chinese stimulus measures.

In 2025, BDO expects the demand to strengthen as renewable energy projects ramp up. Still, supply constraints and logistical challenges may continue to drive price fluctuations.

The rare earth element market is also in focus as countries look to diversify their supply chains since the U.S., China, and Myanmar account for 92% of global production.

President Donald Trump's recent remark shows the importance of this group of metals, which is vital for producing magnets.

"We're looking to do a deal with Ukraine where they're going to secure what we're giving them with their rare earths and other things," he said, per Reuters.

Looking forward, despite opportunities created by the energy transition, BDO notes a pressing demographic challenge.

Per McKinsey's survey of Canadian mining companies, 70% of people between 15 and 30 years old would not consider working in mining. Meanwhile, between 2016 and 2022, the number of mining engineering graduates in the U.S. fell by 41%.

While the industry tries to reverse the trend by integrating advanced technologies and enhancing sustainability efforts to create a more attractive work environment – closing the skills gap remains a key. To drive the next phase of mining evolution, the future workforce will need expertise in automation, AI, and environmental management.

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