Banco Carregosa economist Paulo Rosa says the mineral market has seen "unprecedented" growth as demand for clean energy drives a surge in investment in the area.

The market for minerals that help power electric vehicles, wind turbines, solar panels and other technologies key to the energy transition has doubled in size in the past five years, according to the International Energy Agency (IEA).

With the goal of carbon neutrality by 2050, copper plays a critical role in enabling the green transition, being a malleable metal with high electrical conductivity and its main use is in electrical applications.

Electric vehicles account for about 5% of total copper demand, but Paulo Rosa estimates that demand will grow sharply in the coming years.

In fact, since the beginning of the year, copper has appreciated sharply and on 26 April exceeded the level of 10,000 dollars per tonne on the London market, a two-year high.

Allianz Global Metals and Mining fund manager David Finger believes that the use of Artificial Intelligence (AI) could increase annual copper demand by up to 5%, as this metal has critical electrical infrastructure characteristics and is essential to conventional data centres, AI 'data centers', which use more energy and reach higher temperatures during operation.

As for lithium, the lightest of all metals, it is widely used in batteries. Approximately 60% of lithium products are used in electric vehicle batteries, with the remainder used in batteries for mobile devices such as 'smartphones' and computers, says Banco Carregosa's senior economist.

Regarding nickel, Paulo Rosa mentions that 16% of all nickel produced goes to clean energy applications, such as electric vehicle batteries.

"Given the potential trajectory of normalisation of the Chinese economy, this could also boost raw materials, which are currently out of focus like nickel [...]. The central government seems determined to combat the current disinflationary environment and boost demand," David Finger told Lusa.

However, data from the JP Morgan monthly report on commodities show that the price per tonne of nickel in January 2024 is around 4,000 dollars lower than in the same month the previous year, having fallen from 20,346 dollars in January 2023 to 16,568 dollars in January 2024.

Read Also: Luís Cabral defends that Social Security should not be financed by work (Portuguese version)