Minerals, Metals Mean Massive Opportunities For MENA
Electric vehicles, energy storage, wind power, solar PV, concentrated solar power, bioenergy, geothermal, expanded electricity grids, hydrogen, geothermal, bioenergy, and carbon capture and sequestration will need a huge amount of minerals and metals as the energy transition plays out.
Using information from the World Bank, Bloomberg New Energy Finance, the US Geological Survey, the American Exploration and Mining Association, Levin Sources and the IEA, we can say the following:
Electric cars and their batteries will need aluminum, copper, lithium, nickel, manganese, cobalt, graphite, chromium, titanium, zinc, lead, iron, silver, silicon and rare earth elements.
Wind power will need copper, nickel, chromium, neodymium, molybdenum, iron, lead, zinc (especially for offshore wind), and aluminum.
Solar PV systems will need copper, silicon, cobalt, indium, iron, lead, vanadium, manganese, titanium, germanium, selenium, tin, tellurium, gallium, silver, and aluminum.
Concentrated solar systems will need copper, nickel, chromium, zinc, silver and aluminum. Bioenergy will need, inter alia, copper, zinc and aluminum.
Geothermal will need nickel, copper, titanium, manganese, molybdenum, aluminum and chromium. The growing electricity grids will need copper and aluminum just to start into the extensive list for this.
Hydrogen production will need a lot of nickel, rare earth elements, platinum group metals, and aluminum, among others.
Nuclear will need molybdenum, aluminum, chromium, indium, vanadium, lead, steel, uranium and many other minerals.
Carbon sequestration and storage will need, inter alia, chromium, cobalt, copper, manganese, molybdenum, nickel, iron and steel.
These lists are not comprehensive, but they give a sense of the mineral needs, especially considering how many of these systems expected to be in service globally and regionally in the coming decades.
We can find some of these minerals and metals in the Middle East and North Africa region. Investors, advisers, consultants, mining engineers and more might be interested in what is happening in the region. Using information from the US Geological Survey and the Austrian Federal Ministry of Tourism and Sustainability, we can say the following:
Algeria produces iron, zinc, gold, and silver. Bahrain produces aluminum. Egypt produces iron, manganese, aluminum, tin, and gold. Iran produces iron, chromium, manganese, molybdenum, titanium, aluminum, bauxite, copper, lead, zinc, gold, and silver. Mauritania produces iron, lead, copper, and gold. Morocco produces cobalt, nickel, copper, lead, zinc, and silver.
Oman produces chromium, manganese, aluminum, and copper. Qatar produces aluminum. Saudi Arabia, the biggest produces iron, aluminum, bauxite, copper, zinc, gold, and silver. Sudan produces iron, chromium, manganese, gold, and silver. Tunisia produces Iran and zinc. The UAE produces aluminum.
These countries are not the largest producers of these minerals and metals by far. However, as I tell my students and those I advise: You do not know until you know. This means that there could be a lot of minerals and metals resources in the region that are yet to be found. The expected huge increase in demand for many minerals and metals as the energy transition takes off in the next decades and beyond could bring considerable investment into the region.
As with oil and gas minerals and metals have distinct levels of reserves estimates. In the most general sense they are proved, possible, and probable reserves. Proved reserves are those that can be extracted with a reasonable return at the current prices and with current technologies and financing. Probable reserves have a more than 50 percent chance of success, but are not near the remarkably high chances of success as proved reserves given present prices, technologies, and financing. Possible reserves are those with modest chances for profits and investment success given the present prices, financing, and technologies.
However, with the massive, expected demand in minerals and metals, there is a good chance that some possible reserves could move into the probable reserves category. Mining and other supply chain technologies related to it could also have great improvements over the years pushed by the increased investments and revenues. Many will look to cut costs via inventions and innovations. Many will look to increase output by similar activities.
Countries outside the region dominate the production of minerals and metals needed for new energy systems.
Using data from the World Bank, Bloomberg New Energy Finance, the US Geological Survey and the IEA, here are some examples. Chile, Peru, and China dominate the production of copper. Indonesia, the Philippines, and Russia are the most important producers of nickel. The Democratic Republic of Congo, Russia and Australia are the most important producers of cobalt. China, Mozambique and Brazil are the most important producers of graphite.
China and the US are the major producers of rare earth elements. Australia, Chile and China are the biggest producers of lithium. South Africa, Russia and Zimbabwe dominate in the production of platinum metals groups.
From a recent IEA report, we see that China, Chile, and Japan dominate in the processing of copper. China, Chile, and Argentina dominate the processing of lithium. China, Finland, and Belgium dominate the processing of cobalt. China and Malaysia dominate the processing of rare earths. China dominates in the production of wind, solar, and battery technologies, and their devices. China has set itself up for the new energy transitions quite nicely.
There will be a huge demand globally and regionally for recycling and the R&D, investments, education, and training related to recycling. Lithium’s recycling rate is extremely low. Improving recycling rates for lithium and some other minerals and metals will be some of the biggest money makers in minerals and metals.
The region could benefit by building up capacities and in these things. It could create a strong core of invention and science related to the energy transition. The region could benefit by improving its human capital in mining, processing, and the construction of new energy systems as well as carbon capture and sequestration.
Many in the region could find jobs in the new energy systems and their related supply chains and sales, maintenance, and repair networks. There will many jobs available for welders, electricians, geologist, engineers who work on recycling and reuse of the metals, electricians, linemen, material scientists, project managers, and a lot more.
The region could, and should, start focusing on starting supply chain investments for storage, transshipment, recycling, maintenance, and repair to name just a few of the potential opportunities here.
The region is a crossroads between east and west and north and south. It will continue to be a place where the sea lanes of communications and chokepoints are important. Now they are important for cargo traffic, oil and LNG.
As the energy transition takes off, the Bab Al-Mandab Strait, Suez Canal, Strait of Hormuz and Strait of Gibraltar could continue to be vital passageways, but for wind vanes, solar panels, parts for concentrated solar devices, geothermal equipment, minerals and metals, and all the important inputs to the energy transition.
Egypt, Morocco, the UAE, Saudi Arabia, Oman and many other places could develop storage, processing and trans-shipment facilities.
The energy transition could lead to more secure and resilient economies with more stable government budgets and jobs creation. There is VUCA — volatility, uncertainty, complexity and ambiguity — in the energy transition. There are also massive opportunities for the inventive, creative, energetic and entrepreneurial.
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