Research firm McKinsey’s inaugural ‘Global Materials Perspective’ report shows that, while the green energy transition could generate 340 000 global jobs to scale critical minerals and metals supply by 2035, 1.25-milion jobs may be at risk, driven by a decrease in thermal coal demand.

The report, which was published on September 17, focuses on the new phase of the energy transition where costs, complexity, challenges and trade-offs are beginning to play out, showing the intertwined dynamic between the energy transition and materials, highlighting how it is creating adaptive challenges for the industry.

This is demonstrated by the growing share of global market production increasingly shifting towards energy transition materials, such as copper, lithium and nickel.

The report shows that the highest level of global market production growth is expected from copper at 30% and lithium at 475% by 2035.

The report highlights that, overall, the mining and metals sectors are currently in a strong financial position, having achieved strong growth in profitability in recent years.

However, it notes that maintaining a strong financial position will be required to scale up the metals and mining industry to support the energy transition, with analysis based on insights from McKinsey’s Metal and Mine Spans, estimating that as much as $5.4- trillion in global capital expenditure and 270 GW of power will be needed, with another 1 100 GW required to decarbonise, to meet demand by 2035.

The report provides a companion viewpoint to McKinsey’s simultaneously published 2024 Global Energy Perspective, which reveals that the supply of critical metals, including lithium and nickel, is scaling up more quickly than expected.

McKinsey says demand patterns are shifting towards alternative technologies and materials in anticipation of supply gaps, thus closing the expected supply-demand gaps.

However, shortages of several critical materials used in the large-scale deployment of low-carbon technologies are still expected. These included an expected 30% to 40% shortage of lithium and rare earth elements, and a 10% to 20% shortage of iridium and copper.

“The size and shape of the metals and mining value pool are continuously changing as the energy transition progresses. Closing the supply-demand gap for critical commodities will be essential to the economic deployment of low-carbon technologies and accelerating the transition,”McKinsey associate partner Michel Foucart said.