Impact of Ukraine Conflict on Metal Prices
In the wake of the Russian invasion of Ukraine, global metal prices have surged, with further increases anticipated for essential electric vehicle (EV) battery minerals such as nickel, cobalt, lithium, and copper, according to a recent report by the International Monetary Fund (IMF).
Critical Role of Minerals in Energy Transition
The IMF report emphasizes the criticality of these minerals in the global energy transition. Copper, nickel, cobalt, and lithium are fundamental components in EVs, batteries, renewable-energy technologies like solar panels and wind turbines, and infrastructure such as charging stations. An average EV battery pack, for instance, requires substantial quantities of these minerals – about 8 kilograms of lithium, 35 kilograms of nickel, and 14 kilograms of cobalt.
Predictions of Dramatic Demand Increase
Based on projections by the International Energy Agency (IEA), the demand for these minerals is expected to rise sharply by 2030. Copper demand may increase by 1.5 times, while nickel and cobalt demands could double. Lithium demand is forecasted to increase sixfold, potentially elevating these minerals to the same level of economic importance as crude oil over the next two decades.
Geographical Concentration of Supply
The report also addresses concerns regarding the concentration of these mineral deposits in specific countries, which adds to the vulnerability of global production. Major copper mines are located in Chile, Peru, and China, while significant nickel supplies come from Indonesia, the Philippines, and Russia. Cobalt and lithium deposits are predominantly found in the Democratic Republic of the Congo, the Philippines, Australia, China, and Chile.
Need for Market Diversification
Experts underscore the necessity of diversifying critical markets to support the global transition to zero-emission energy technologies and mitigate the effects of climate change. International cooperation, data exchange, and other strategic approaches are crucial for this diversification.
Ukraine’s Mineral Wealth
The report also mentions Ukraine’s vast mineral resources, valued at $14.8 trillion, with significant deposits of coal and iron ore. However, Russia’s annexation of Crimea and the ongoing conflict have resulted in the seizure of numerous Ukrainian deposits, potentially worth between $12.5 trillion to $15 trillion.
IMF’s Outlook on Fossil Fuels
Additionally, the IMF predicts rising prices for fossil fuels, which are important for clean energy, indicating a complex interplay between traditional energy sources and emerging clean technologies. 
