Mineral Resource Valuations in the Energy Transition Era

The International Energy Agency’s Global Critical Minerals Outlook 2025 sets out the scale of expected demand growth. Under net-zero aligned scenarios, lithium demand is projected to increase around sevenfold by 2035, nickel and cobalt roughly threefold, and copper approximately twofold. Under the more conservative Stated Policies Scenario, copper demand grows by around 30% to 2040.

The supply gap

The more consequential finding concerns supply. Copper and lithium are identified as the significant exceptions where mined supply from currently announced projects falls short of projected 2035 demand — implied deficits of roughly 30% for copper and 40% for lithium.

The causes of the copper shortfall are structural rather than cyclical: declining ore grades, rising capital costs, limited new discoveries and long project lead times. None of these resolve quickly, which is why the IEA estimates around USD 500 billion of new capital investment in mining is required to 2040 under the Stated Policies Scenario, rising to roughly USD 600 billion under the Announced Pledges Scenario.

What this does and does not mean for valuation

It is tempting to translate a projected supply deficit directly into a higher long-run price assumption. That would be a mistake, and it is worth being explicit about why.

A projected deficit is a statement about announced projects against modelled demand. It does not account for supply that responds to price, for substitution, for recycling, or for demand that fails to materialise if costs stay high. The IEA scenarios are explicitly scenarios, not forecasts of a single outcome.

The defensible use of this data in a valuation is as a structural argument for the shape of risk — a market where supply is slow to respond and demand is policy-sensitive — supported by sensitivity analysis across price paths, rather than as justification for a single elevated price deck.

Where the value actually sits

Mineral asset value is driven by extraction economics rather than by resource size. Ore grade, strip ratio, metallurgical recovery, processing cost, and access to power and water typically determine whether a resource is economic at a given price. Two deposits with identical contained metal can differ enormously in value.

Demand concentration is also relevant: electric vehicles account for the majority of projected lithium and nickel demand growth, with battery production expected to require a significant share of global cobalt and graphite by 2030. A mineral asset valuation is therefore partly a bet on battery chemistry, which continues to evolve.

Practical guidance

Work from the technical reports rather than from headline resource statements, model the economics explicitly, and present the result as a range with the price assumption isolated. Where a valuation depends on a price materially above long-run historical levels, that assumption should be stated plainly rather than embedded in the model.