Demand for metals used in everything from wind-turbine blades to batteries will surge for decades to come, driven by efforts to decarbonize the global economy and shift away from fossil fuels, according to the World Bank.
Even as consumption growth for other commodities like grain probably will trail off in the next 30 years, metals will remain in high demand, delivering “windfall gains for countries that export them,” the bank’s economists wrote in a report released on Thursday.
The adoption of low-carbon power generation “implies a permanent increase in demand for copper, nickel, cobalt, and lithium, and an eventual drop in the use of fossil fuels.”
The long-term outlook for metals and other commodity classes has profound implications for developing nations, two-thirds of which are reliant on raw-material exports for much of their income, according to the report.
The bank urged commodity-dependent governments to build so-called rainy-day funds, avoid debt accumulation and shy away from protectionist trade policies when price volatility looms.