Labor Shortage in U.S. Mining Industry Could Boost Metal Prices Amid Green Transition

June 09, 2023

Predictions that a labor shortage within the U.S. mining sector could lead to a surge in prices for various metals essential for moving away from fossil fuels. The scarcity affects engineers, miners, and truck drivers involved in the industry. This issue presents an additional challenge for producers already grappling to provide the materials required for electric vehicles and renewable energy infrastructure.

As the transition to green energy is set to increase the demand for mined materials, the U.S. is working to boost domestic production and lessen its dependence on China, rich in these metals. Some investors predict that achieving these goals will drive up the prices of commodities such as copper, lithium, nickel, tin, and zinc in the coming years.

While metal prices are currently down from last year's highs due to China's weaker-than-expected recovery post-Covid-19 lockdowns, many analysts anticipate a rebound. Citi predicts that labor shortages and other challenges will push lithium prices up by as much as 40% by the end of the year and expects copper to jump 50% by 2025.

Existing mines are already dealing with the effects of years of underinvestment, and companies warn that labor shortages could further jeopardize their capacity to ramp up production.