Prices for lithium, cobalt, nickel, aluminium and copper have jumped sky-high as renewable energy projects and battery manufacturing operations expand across the globe. While the scarcity of these resources is a major concern, many energy companies are also worried that the rising prices of metals and minerals may thwart their plans for large-scale green energy investments.

The price of metals and minerals has surged over the past year, and the uptrend is likely to persist as global demand for these resources continues to grow in tandem with the green transition.

Lithium, cobalt, nickel, aluminium and copper prices have soared as renewable energy projects and battery manufacturing operations expand worldwide. While the scarcity of these resources is a major concern, many energy companies are also worried about the rising prices of metals and minerals as they have designed plans for large-scale green energy investments.

The price increase for lithium has exceeded 700 per cent between January 2021 and March 2022, while the price of cobalt rose by more than 150 per cent and nickel by nearly 100 per cent. Although lithium production grew by 36 per cent in 2022, demand has outpaced supply, driving prices higher. Demand for lithium needed for electric vehicles alone increased by roughly 76 per cent last year.

Copper is playing an increasingly special role among metals. Its price rose significantly from late December to late January, from 3.81 dollars to 4.24 dollars per unit weight. Many expect both the demand for copper and its price to rise, as copper has a wide range of uses around the world.

„Copper is typically used as a construction metal for wiring for both buildings and machinery… but if we look at the decarbonisation net zero energy transition trend, copper is the new oil,”

said Al Chu, who manages the BNY Mellon Natural Resources fund. He believes that the price of copper will drastically increase this year, as ”every renewable energy pretty much needs copper, because if you’re talking about electrifying something and transmitting electricity, you need copper,” he said.

In the following decades, huge quantities of copper are likely to be required to achieve net-zero goals. The metal, however, is not readily available, as many of the existing mines have already been depleted. Mining will also become increasingly complicated in the future, as many copper-rich regions are inn underdeveloped and remote areas, which is why lithium is expected to remain as important as copper.

Saxo Bank Head of Commodity Strategy Ole Hansen said that copper will “ settle into a USD 3.75 to USD 4.75 range during the coming months before eventually breaking higher to reach a new record sometime during the second half.” This growth could last until 2030, according to the analysts at the research and consultancy group Wood Mackenzie.