Energy Transition to Drive Next Super Cycle
-
bookmark
-
print
The transition to a lower-carbon world could drive a commodities price boom that is even longer, deeper and broader than the storied, decade-long super cycle that came on the back of voracious Chinese demand in the early 2000s, experts told BMO’s 30th Global Metals and Mining Conference.
Panelists on an Energy Metals Transition breakout session, hosted by BMO Capital Markets commodities analyst Colin Hamilton, also said the next super cycle will be multi-metal and will not be limited to a single region or geography.
“A lot of people have asked the question, where is the next big demand wave going to come from? Is there ever going to be another super cycle?” said Oskar Lewnowski, CEO and CIO at Orion Resource Partners.
“I think what nobody really foresaw was that the next big source of demand growth for metals globally wasn’t going to be on a geographic basis, but really on the thematic basis of the energy transition.”
All Things Energy
Whether it’s aluminum or copper for electric vehicles or transmission infrastructure, or metals ranging from cobalt to nickel and lithium in the manufacture of EV batteries, the energy transition will apply pressure to metals across the sector as the world’s economies drive toward net zero.
Panelists predicted strong demand growth for minerals and metals ranging from vanadium – used in nuclear reactors, ceramics and superconducting magnets – to nickel, zinc, platinum and even tin.
According to Charlie Durant, Research Manager at CRU Group, copper and nickel will experience massive demand jumps in the next 20 to 25 years, driven by the transition to renewable fuels and especially as electric vehicle production becomes the standard for automobile manufacturers; copper will get an additional boost from offshore and onshore wind power generation and solar power generation.
Durant said that, by 2035, 33% of primary nickel demand will come from electric batteries, versus 8% now, while EV and renewable energy related refined copper demand will rise to potentially 4.5 million tonnes in 2035, from about 1 million tonnes today.
As a reference, the last super cycle saw average annual demand for key commodities grow at a rate that was three times the average growth rate for the past 50 years, Lewnowski said, predicting that copper and aluminum will be the big winners in the next super cycle, as long as prices don’t rise too far, too fast and prompt substitution.
The question is not whether prices rise, but how they will ebb and flow amid various scenarios around the intensity of supply and demand, Durant said.
“There’s some really huge step gains here,” he noted. “While the future is incredibly uncertain, this is something that will impact many different commodities.”
The Sustainability Key
To sustain the super cycle, the industry must be able to attract further investment to help finance some $160 billion in capex needed to fulfill just the incremental demand from renewables in the next ten years.
With much of the world’s GDP now committed to a carbon neutral future – many governments around the world are targeting zero carbon emissions by 2050 – the fundamental challenge for the industry will be attracting new investment.
Part of the work of miners will be to assure investors that the industry is not just producing the metals required for the transition, but that it is doing so responsibly, and is fully integrated into building sustainable production solutions.
“I think this is about, how do we actually participate?” said Gillian Davidson, non-executive Director and Chair of the Sustainability Committee at Central Asia Metals. “And the other is, how do we become an innovation partner?”
Davidson says there’s been great initiative and leadership from the mining sector, but that it all comes down to driving sustainability from the mine face through the supply chain. She said reducing a company’s carbon footprint at the mine level is indeed required, but she also urged the industry to look across the entire supply chain to see where it can decarbonize and introduce even more sustainable practices.
“We’re moving the narrative beyond ‘we're important because you need us,’ to ‘how do we help solve your problems and some of these bold goals that have been set out,’” she said.
John Mulligan, Director of Market Relations and Climate Change Lead at World Gold Council, agreed if miners do more to show how they are reducing their carbon footprints it is likely to prompt new financing to really flow.
“It’s that full value chain approach, combined with increasing demand for renewables, that will make this next cycle truly super,” said Lewnowski. “If you want multiple expansion and interest to increase, the industry itself needs to be more virtuous in its production of metal … We need to set the bar higher.”
Energy Transition to Drive Next Super Cycle
Director, Sustainable Finance
Magali Gable joined BMO’s Sustainable Finance team in early 2020. She supports BMO’s Energy and Natural Resources clients by offering advisory services,…
Magali Gable joined BMO’s Sustainable Finance team in early 2020. She supports BMO’s Energy and Natural Resources clients by offering advisory services,…
VIEW FULL PROFILE- Minute Read
- Listen Stop
- Text Bigger | Text Smaller
The transition to a lower-carbon world could drive a commodities price boom that is even longer, deeper and broader than the storied, decade-long super cycle that came on the back of voracious Chinese demand in the early 2000s, experts told BMO’s 30th Global Metals and Mining Conference.
Panelists on an Energy Metals Transition breakout session, hosted by BMO Capital Markets commodities analyst Colin Hamilton, also said the next super cycle will be multi-metal and will not be limited to a single region or geography.
“A lot of people have asked the question, where is the next big demand wave going to come from? Is there ever going to be another super cycle?” said Oskar Lewnowski, CEO and CIO at Orion Resource Partners.
“I think what nobody really foresaw was that the next big source of demand growth for metals globally wasn’t going to be on a geographic basis, but really on the thematic basis of the energy transition.”
All Things Energy
Whether it’s aluminum or copper for electric vehicles or transmission infrastructure, or metals ranging from cobalt to nickel and lithium in the manufacture of EV batteries, the energy transition will apply pressure to metals across the sector as the world’s economies drive toward net zero.
Panelists predicted strong demand growth for minerals and metals ranging from vanadium – used in nuclear reactors, ceramics and superconducting magnets – to nickel, zinc, platinum and even tin.
According to Charlie Durant, Research Manager at CRU Group, copper and nickel will experience massive demand jumps in the next 20 to 25 years, driven by the transition to renewable fuels and especially as electric vehicle production becomes the standard for automobile manufacturers; copper will get an additional boost from offshore and onshore wind power generation and solar power generation.
Durant said that, by 2035, 33% of primary nickel demand will come from electric batteries, versus 8% now, while EV and renewable energy related refined copper demand will rise to potentially 4.5 million tonnes in 2035, from about 1 million tonnes today.
As a reference, the last super cycle saw average annual demand for key commodities grow at a rate that was three times the average growth rate for the past 50 years, Lewnowski said, predicting that copper and aluminum will be the big winners in the next super cycle, as long as prices don’t rise too far, too fast and prompt substitution.
The question is not whether prices rise, but how they will ebb and flow amid various scenarios around the intensity of supply and demand, Durant said.
“There’s some really huge step gains here,” he noted. “While the future is incredibly uncertain, this is something that will impact many different commodities.”
The Sustainability Key
To sustain the super cycle, the industry must be able to attract further investment to help finance some $160 billion in capex needed to fulfill just the incremental demand from renewables in the next ten years.
With much of the world’s GDP now committed to a carbon neutral future – many governments around the world are targeting zero carbon emissions by 2050 – the fundamental challenge for the industry will be attracting new investment.
Part of the work of miners will be to assure investors that the industry is not just producing the metals required for the transition, but that it is doing so responsibly, and is fully integrated into building sustainable production solutions.
“I think this is about, how do we actually participate?” said Gillian Davidson, non-executive Director and Chair of the Sustainability Committee at Central Asia Metals. “And the other is, how do we become an innovation partner?”
Davidson says there’s been great initiative and leadership from the mining sector, but that it all comes down to driving sustainability from the mine face through the supply chain. She said reducing a company’s carbon footprint at the mine level is indeed required, but she also urged the industry to look across the entire supply chain to see where it can decarbonize and introduce even more sustainable practices.
“We’re moving the narrative beyond ‘we're important because you need us,’ to ‘how do we help solve your problems and some of these bold goals that have been set out,’” she said.
John Mulligan, Director of Market Relations and Climate Change Lead at World Gold Council, agreed if miners do more to show how they are reducing their carbon footprints it is likely to prompt new financing to really flow.
“It’s that full value chain approach, combined with increasing demand for renewables, that will make this next cycle truly super,” said Lewnowski. “If you want multiple expansion and interest to increase, the industry itself needs to be more virtuous in its production of metal … We need to set the bar higher.”
Heard at our Global Metals & Mining Conference
PART 2
ETE: Building Momentum One Scholar at a Time
April 21, 2021
Ana-Maria Mikhail, a MSc student in Metals and Energy at Imperial College London, the secret sauce to cement a career in the mining industr…
PART 3
Ian Bremmer in Conversation: The Pandemic and a Changing Geopolitical Landscape
March 02, 2021
As BMO opened its 30th annual Global Metals and Mining Conference amidst the COVID-19 pandemic, there was plenty to reflect on about how th…
PART 4
Episode 33: The Evolution of ESG in Mining
Dan Barclay March 16, 2021
Dan Barclay is joined by Tom Butler, CEO for the International Council on Mining and Metals in a discussion on how ESG policy has evolved i…
Conference
Feb. 23 - 26, 2025 | Hollywood, Florida
Email UsYou might also be interested in
Why Sustainability Is Good Business: Key Takeaways from IEFA Toronto 2024
Building for Tomorrow: Real Estate, Construction, and Sustainability
A First in Western Canada: Avenue Living Leverages BMO's Retrofit Program to Add 179 New Rental Units in Downtown Edmonton
For Canada to Be a Mining Leader, Industry Collaboration With Government is Needed
Highlights from our 33rd Global Metals, Mining & Critical Minerals Conference
Gold Expected to Shine Amid Uncertainty: World Gold Council at BMO Conference
With Changes, the Mining Industry Could Have a Larger Role in Addressing Climate Change: Ivanhoe Mines’ Friedland
Our Industry-Leading Global Metals, Mining & Critical Minerals Conference
The Role of Responsible Mining in the Clean Energy Transition: ICMM CEO Rohitesh Dhawan in Conversation
Record Investor Attendance Expected at BMO's 33rd Global Metals, Mining & Critical Minerals Conference, February 25th to February 28th, 2024
How NASA and IBM Are Using Geospatial Data and AI to Analyze Climate Risks
BMO Arranges Green Financing to Fund New Lawson Centre for Sustainability, Trinity College's Most Significant Build in a Century
BMO ranked one of the most sustainable companies in North America on the Dow Jones Sustainability Indices
Canada Has an Opportunity to Become a Global Leader in Carbon Dioxide Removal
More Companies Have Plans to Address Climate Change Based on Rising Business Importance: Survey Results
BMO Climate Institute Business Leaders Survey: Nearly Half of Business Leaders in the U.S. and Canada Believe Climate Change Has Already Affected Their Businesses, but Few Have a Strategy
How the Energy Sector Is Helping Canada Achieve Its Decarbonization Goals
Why Businesses Need to Accelerate Their Efforts to Fight Climate Change
Transforming the Global Food System to Benefit Investors and the Planet
BMO Donates $3 Million to GRID Alternatives to Provide Solar Energy Solutions for Low-Income Families
Banco do Brasil and BMO Financial Group to Introduce First-of-its-Kind Program to Provide Sustainability-Linked Trade Loans Supporting Brazilian Exporters
BMO Provides Innovative New Sustainability-Linked Deposit Product to Zurn Elkay Water Solutions
Quick Listen: Michael Torrance on Empowering Your Organization to Operationalize Sustainability
BMO and Bell Canada Execute Innovative Sustainability-Linked Derivative Tied to Ambitious GHG Emission Reduction Targets
BMO Named to UN-Convened Group Providing Guidance to Global Banks on Nature Target Setting
Driving Innovations In Tech To Strengthen Climate Resilience With Climate Engine’s Spatiafi, Built On Google Cloud
BMO Celebrates Earth Day with 3rd Annual Trees from Trades Day on its Global Trading Floors
BMO Donates $2 Million to the University of Saskatchewan to Accelerate Research Critical to the Future of Food
North America’s Critical Minerals Advantage: Deep Dive on Community Engagement
Energy Transition Will Require Collaboration Between Miners and End-Users
Exploring North America’s Critical Minerals Advantage: Global Metals, Mining & Critical Minerals Conference
The Most Valuable Commodity is Trust: ICMM to BMO Global Metals, Mining & Critical Minerals Conference
Rock Legends Reflect on Mining Hits and Misses: Global Metals, Mining & Critical Minerals Conference
Not All Carbon Credits Created Equal: BMO Global Metals, Mining & Critical Minerals Conference
BMO Experts at our 32nd Global Metals, Mining & Critical Minerals Conference
Evolving Mining for a Sustainable Energy Transition: ICMM CEO Rohitesh Dhawan in Conversation
Will 2023 be the Year of Gold: World Gold Council at BMO Conference
Global Finance Magazine Names BMO The World's Best Metals & Mining Investment Bank for 2023
Public Policy and the Energy Transition: Howard Learner in Conversation
Taskforce on Nature-Related Financial Disclosure (TNFD) – A Plan for Integrating Nature into Business
Takeaways from the BMO Climate Institute Small and Mid-Sized Businesses Climate Survey
BMO Ranked North America's Most Sustainable Bank by Corporate Knights for Fourth Consecutive Year
Is Green Financing for Nuclear the Next Frontier in the Energy Transition?
ESG Trends in the Base Metal and Diversified Mining Industries: BMO Equity Research Report
BMO ranked one of the most sustainable companies in North America on the Dow Jones Sustainability Indices
BMO Climate Institute Survey Shows Costs and Competing Priorities Slowing Climate Action for Small and Mid-Sized Businesses
Managing and Monetizing Your Transition to a Net Zero World with BMO and Radicle
BMO the Top Ranked Financial Institution on New Global Sustainability Benchmark Announced at COP 27
COP27 in Focus: Will Energy Security and Economic Uncertainty Impact the Climate Transition?
BMO to Invest in Innovative Carbon Offsets from CarbonCure to Permanently Store CO2
RoadMap Project: An Indigenous-led Paradigm Shift for Economic Reconciliation
A Canadian First: BMO and Concordia University Partner for a Sustainable Future with Innovative Sustainability-Linked Loan
Sustainability Strategy and Reporting for Small and Medium Sized Companies: A Discussion at the Conference of Montreal
BMO to Acquire Calgary-based Radicle Group Inc., a Leader in Environmental Services
Investment Opportunities for a Net-Zero Economy: A Conversation at the Milken Institute Global Conference
How Hope, Grit, and a Hospital Network Saved Maverix Private Capital Founder John Ruffolo
Hydrogen’s Role in the Energy Transition: Matt Fairley in Conversation
Key Takeaways on Ag, Food, Fertilizer & ESG from BMO’s Farm to Market Conference
Exploring the Physical and Transition Risks Facing Food and Agriculture
Building an ESG Business Case in the Food Sector: The Food Institute
Forging Ahead in the Energy Transition: Darryl White to Global Reserve and Asset Managers
BMO and EDC Announce Collaboration to Introduce Sustainable Finance Solutions for Canadian Businesses
Retrofitting Canada's Building Sector: Efficiency Canada’s Corey Diamond in Conversation
The Role of Hydrogen in the Energy Transition: FuelCell Energy CEO Jason Few in Conversation
BMO proud to support first Government of Canada Green Bond transaction as joint-lead manager
Op Ed: Government Action Can Help Spur More Home Building To Address Canada’s Housing Shortage
Tackling Climate Change in Metals and Mining: ICMM CEO Rohitesh Dhawan in Conversation
The Market Transition from COVID-19 has Begun: Belski to BMO Metals and Mining Conference
BMO Launches Business Within Reach: BMO for Black Entrepreneurs and Commits $100 million in loans to Help Black-led Businesses Start up, Scale up, and Grow
The Post 2020 Biodiversity Framework – A Discussion with Basile Van Havre
BMO Announces Plan to Partner with Breakthrough Energy Catalyst to Accelerate Climate Innovation
BMO Financial Group Named North America's Most Sustainable Bank for Third Consecutive Year
Mitigating the Physical Impacts of Climate Change with Spatial Finance
BMO Helps Boralex Go Beyond Renewable Energy, with the Transition of its Credit Facility to a Sustainability-Linked Loan
A Global First: BMO Supports Bruce Power with World's First Nuclear Green Financing Framework
BMO ranked one of the most sustainable companies in the world according to Dow Jones Sustainability Indices
The Future of Remote Work and Diversity in the Asset Management Industry
Opinion: Canada and the U.S. have a shared interest in securing self-sufficiency in critical minerals
North American Metals & Mining first: BMO helps Sandstorm Gold Royalties achieve ESG goals with Sustainability-Linked Loan
Education, Employment and Economic Empowerment: BMO Releases Wîcihitowin ᐑᒋᐦᐃᑐᐏᐣ- First Annual Indigenous Partnerships and Progress Report
BMO Announces $12 Billion Financing Commitment towards Affordable Housing in Canada
In support of Canada’s bid to host the headquarters of the International Sustainability Standards Board
BMO supports Canada's bid to host the headquarters of the International Sustainability Standards Board
BMO Named to Canada's Best 50 Corporate Citizens Ranking by Corporate Knights
A North American First: BMO Helps Gibson Energy Fully Transition Credit Facility to a Sustainability-Linked Loan
Understanding Biodiversity Management: Best Practices and Innovation
Ian Bremmer in Conversation: The Pandemic and a Changing Geopolitical Landscape
Episode 29: What 20 Years of ESG Engagement Can Teach Us About the Future
BMO Financial Group 2020 Sustainability Report and Public Accountability Statement Now Available Online
Episode 28: Bloomberg: Enhancing ESG Disclosure through Data-Driven Solutions
BMO Ranked Among Most Sustainable Companies on Dow Jones Sustainability Index - North America
BMO investing in a sustainable future with $1M donation to the Institute for Sustainable Finance
BMO Financial Group Reaches Key Milestone in Matching 100 Per Cent of Electricity Usage with Renewables
BMO Financial Group Recognized as One of the World's Most Sustainably Managed Companies in New Wall Street Journal Ranking
Episode 23: TC Transcontinental – A Market Leader in Sustainable Packaging
BMO Financial Group to Source 100 Per Cent of Electricity Usage From Renewables
Episode 07: World Bank: Mobilizing Capital Markets for Sustainable Finance
Episode 06: Responsible Investing – Industry Trends and Best Practices from Canada