Global Energy Transition at Risk Due to Low Mining Investment, Says Rio Tinto Chairman

April 15, 2024

Dominic Barton, the chairman of Rio Tinto, expressed significant concern regarding the global energy transition during his speech at the Ecosperity conference in Singapore. Barton emphasized the critical shortage of investments in the mining sector, which is jeopardizing the supply of essential minerals like copper, lithium, and cobalt. These materials are indispensable for manufacturing electric vehicles, solar plants, and wind farms.

According to Barton, the investment shortfall in the mining industry since 2015-2016 is in the range of hundreds of billions of dollars, with the capital needed to open new mines lagging severely behind demand. The International Energy Agency notes that the amount of metals required for each kilowatt of generation capacity has surged by 50% since 2010, and electric vehicles require six times more minerals than vehicles with traditional combustion engines.

Highlighting the urgency of the situation, Barton stated, "The gap is humungous, and I am actually very worried about whether we will be able to close it." He also pointed out that the process of developing new mines takes significantly longer than in the past, compounding the challenge of meeting rising global demand for critical minerals.

Barton also acknowledged the mining industry's need to enhance its public image and build trust, reflecting on Rio Tinto's own challenges, including the controversial destruction of ancient Aboriginal rock shelters in 2020, which he described as "terrible" and "embarrassing."

Scott Clements, a partner at Tribeca Capital, also spoke at the conference, highlighting the "phenomenal returns" potential in the mining sector. He emphasized the importance of the industry being perceived as part of the solution to global environmental challenges rather than a contributor to the problem.

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