The rapid expansion of artificial intelligence (AI) and geopolitical disruptions are straining global metals supplies, as mining investments struggle to keep up, according to Wood Mackenzie. The energy consultancy is monitoring over 250 GW of data center projects worldwide, more than triple the number from a year ago. Wood Mackenzie predicts AI-related electricity consumption will surge fivefold between 2025 and 2030, exceeding 1,000 TWh by 2035. This surge could require three to four times more metal for supporting infrastructure like transmission lines and substations.
Lindsay Grant, vice-president of metals and mining research at Wood Mackenzie, highlighted the growing gap between accelerating demand and complex supply delivery. Despite high metal prices, project sanctioning remains below expectations due to lengthy permitting, geopolitical uncertainty, and rising project costs. Copper is under particularly sharp pressure, with prices hitting a record $14,759 per tonne. US stockpiling and trade policies have distorted global inventories, leaving markets outside the US facing a refined copper deficit of about 450,000 tonnes.
Aluminum markets are also facing supply shocks after attacks damaged two major Middle Eastern smelters, removing almost 2% of global primary production. Wood Mackenzie expects aluminum to return to surplus in 2027, though underlying market conditions remain supportive. Nickel is moving towards balance after years of oversupply, with global refined production forecast to contract 2% in 2026. However, the outlook varies by product, with Class II nickel supplies tightening due to Indonesian mining quotas and drought-related disruptions.
Battery technology is adding another layer to metals demand, with lithium iron phosphate (LFP) chemistry strengthening its position in electric vehicles and energy storage. Wood Mackenzie expects LFP to dominate mass-market batteries through 2030, supported by Chinese manufacturing expansion. Financing remains a significant challenge, with the lithium industry needing an estimated $150 billion to $250 billion through the 2050s. Electricity availability also poses an obstacle, with grid upgrades often taking over a decade, prompting developers to consider microgrids and off-grid generation.