Shovel ready: Supply chain scrutiny drives metals and mining deals in Africa
The green transition is boosting demand for key metals and Africa’s commodity markets are under pressure to increase extraction. But buyer awareness of Scope 3 emissions means that processes need to be cleaned up and fast.
When Mark Twain referred to a mine as nothing but a hole in the ground with a liar standing next to it, he probably wasn’t imagining that those mines might be surrounded with solar panels as well.
And yet, 170 years later, demand for ‘clean’ copper could even surpass the Californian gold rush of the 1850s. The International Energy Agency predicts that annual copper demand for electricity grids will grow from 5 million tonnes in 2020 to 7.5 million tonnes by 2040 in its stated policies scenario and to nearly 10 million tonnes in the sustainable development scenario.
In a green and electrified economy, copper is everywhere and the financial markets reflect this. According to data from S&P Global Market Intelligence, copper assets made up 33.8% of all 228 metals and mining asset acquisition transactions in 2022. Diversified metals and mining, including lithium, graphite, cobalt and nickel, made up another 32% of those transactions.
Increased market activity also reflects a global realization that the massive supply gap in the so-called ‘metals of the future’ could jeopardize any effort to decarbonize the economy.