BAKU, Azerbaijan, October 5. Fitch Ratings expects that demand for energy transition metals, such as copper, nickel, cobalt and lithium will rise by up to several hundred percent over the next two decades, Trend reports.
The latest report from Fitch Ratings reveals that an economy that relies on clean energy and zero-emission vehicles requires more minerals than one based on hydrocarbons.
“Metals demand will be defined by chosen technologies and battery chemistries as well as government policies and investor behavior incentivizing energy transition. A huge supply response will be required from miners given that most of scenarios assume market deficits for most of green energy metals post 2025-2030. Market deficit and high prices will support miners’ cash flows to provide for future investments. The ability of miners to cope with the challenge of energy transition will depend on operational strength, reserve portfolio and prudent capital allocation decisions. Miners are enhancing their exposure to energy transition metals, which Fitch considers positive for their business profiles,” reads the report.
Fitch put Anglo American plc’s ‘BBB’ rating on Positive Outlook in April 2022, as the company delivered on production growth and is better positioned than its peers for the global energy transition, along with its conservative financial profile. Zijin Mining Group Co., Ltd’s upgrade to ‘BBB-‘ reflects the company's deleveraging after the ramp-up of its major copper and other mine assets in China and overseas, and the benefits of diversifying its exposure to lithium carbonate with the acquisition of the 3Q project in Argentina. BHP and Rio Tinto are reshuffling their portfolios to adjust to the green transition from their current exposure to the more traditional economy. Rio Tinto is focused on increasing its footprint to lithium and plans to increase direct participation in its large copper project in Mongolia. BHP aims to increase exposure to nickel and copper in its bid for Oz Minerals, the Australian producer.
Follow the author on Twitter: @Lyaman_Zeyn