Zinc Prices Rise on Demand for Renewable Energy Equipment
The price of zinc is rising and it will drive up the price of everything from renewables to cell phones.
- Zinc is used in many common products, including cell phones
- Cost of renewable energy projects and some electronics may rise as prices of key metals rise
- Industry experts say the price is likely to continue to rise amid a supply crisis in Europe
But that’s good news for miners – Australia is the world’s second-largest producer.
The price of zinc on the London Metals Exchange hit a 14-year high in October and is holding near that price.
It is one of many metals that are rising in price and driving up the cost of renewable energy systems in particular.
Since the start of 2020, the price of PV-grade polysilicon used in solar panels has more than quadrupled, steel has increased by 50%, copper by 60% and aluminum by 80%.
Rising prices could also drive up the cost of mobile phones, which require many of the same resources.
Pete Lau of phone maker OnePlus said Business Intern last year that “prices throughout the supply chain, from raw materials to 5G chips, are all on the rise.”
Variscan Mines chief executive Stewart Dickson said the price of zinc could rise further.
Soaring energy prices in Europe have forced some smelters to close, which has tightened supply.
Belgium cut production in half in the middle of last year.
“Supply is expected to fall 3% per year, but demand will double by 2030,” Mr Dickson said.
His company is involved in two zinc projects in Spain and other projects in Chile and Australia.
What else could come up?
Zinc is used as a protective coating on steel, combines with copper to make brass, and is found in chemical compounds in rubber and paints.
It is used in electroplating, metallization and automotive parts as well as in electronic products such as fuses, anodes and batteries.
You can find it on gutters, burner plates, cable wraps, and sunscreen.
But the biggest impact of rising zinc prices could be in the renewable energy sector.
“Batteries need zinc, solar panels need zinc to improve energy flow, and wind turbines need zinc,” Dickson said.
There are over 100 large-scale solar projects underway in Australia and they are all facing pressure from the rising cost of a number of resources.
But one analysis by the International Energy Agency (IEA) in December found that rising costs would not impact the viability of renewable energy projects.
It found that global orders were on track to “break a new year-over-year record, demonstrating the cost competitiveness of renewable resources, even with a slight price increase in some markets.”
More jobs for Australians?
There are large zinc mines in several states, including Queensland, the Northern Territory and Western Australia.
CBH Resources Limited produces a lot of zinc from the Endeavor mine at Cobar and the Rasp mine at Broken Hill, both in New South Wales, and operates ship loading and export facilities at Newcastle.
CBH employs 440 people in New South Wales, while Glencore employs 1,800 people at its Queensland mines.
Townsville-based Sun Metals (a division of Korea Zinc) and the Nyrstar refinery in Hobart (owned by Trafigura) are among the world’s largest zinc suppliers.
They employ over 1,000 workers between them.
Mr Dickson said mining companies would start exploring for zinc to take advantage of high prices.
That’s exactly what his company does.
“There are large undeveloped areas that could be examined,” he said.