World Bank sees copper, lithium prices staying high on energy transition demand

Copper and lithium prices are expected to remain high due to demand related to the energy transition, according to a World Bank official.

“The prices of lithium and copper are very high and I suspect that they will remain high due to the enormous demand of the [energy] transition,” said Carlos Jaramillo, the bank’s VP for Latin America and the Caribbean in an interview for Linkedin News on Tuesday in the framework of COP27.

The importance of minerals has increased due to the global challenge of reducing CO2 emissions, requiring large financial sums. Only through public-private alliances will it be possible to advance in this sense, said the official.

Although there is no direct financial relationship, the World Bank is advising governments in the region to regulate clean production and bring more benefits to communities, Jaramillo said when asked by BNamericas if it has initiatives regarding the development of lithium in Chile and Argentina.

BNamericas also asked if there could be a risk in China continuing to be the world’s leading copper consumer and manufacturer of batteries for electric vehicles (accounting for 70% of the latter). Jaramillo said the main thing is that the resources are used to benefit the population and that mining is done without harming the environment, regardless of where the investment comes from.

"All investors are welcome in most Latin American countries, as long as they comply with regulations and generate income for the country and communities," he added.

Investors and customers, such as those from European countries, are willing to pay higher prices for products manufactured or processed without carbon emissions or without causing deforestation, Jaramillo said.

If appropriate measures are not taken, by 2030 up to 5.8mn people in Latin America and the Caribbean could fall into extreme poverty as a result of climate change and, by 2050, more than 17mn people could be forced to leave their homes to escape climate impacts, the World Bank said in a September report.

In fiscal year 2022, ending in June, the bank provided close to US$4.7bn for projects that target climate actions in the region.