Anticipated copper and nickel demand due to energy transition will require equire $250 billion to $350 billion cumulative capital expenditures by 2030, said McKinsey is a study looking at the production challenges ahead. 

Today the consultancy published its report, The Raw-materials Challenge: How The Metals And Mining Sector Will Be At The Core Of Enabling The Energy Transition. 

McKinsey notes that energy transition is underway, but worries that producers won't be able to keep pace. 

" Despite a relatively large pipeline of projects to scale up supply in some of these commodities, and efforts to reduce the capital and operating costs associated with a number of them (such as direct lithium extraction), the task at hand is not trivial. In fact, ... we could see copper and nickel demand exceeding supply by five to eight million and 700,000 to one million metric tons, respectively," writes the reports authors. 

Given significant costs and long lead times for mines—eight to 10 years—the authors write that new incentives are needed. 

"Clearly signaling growth, technology mix, and material needs will be an important mechanism to enable raw-material suppliers to approve large capital investments. This will take place (and is already doing so) in multiple forms: from off-take agreements with producers and partnerships with raw-materials suppliers to equity ownership of raw-material production," recommends the authors.

"As the raw-materials supplier to the economy, the mining sector will need to grow at an unprecedented pace in order to enable the required technological shifts. The sector will be expected to move at a faster pace, despite its traditional reputation as a long lead-time, highly capital-intensive industry."

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