13/12/2025
The second edition of the Global Materials Outlook, edited by McKinsey, analyzes how the global materials industry is evolving in a context marked by geopolitical tensions, new technologies, and a slowdown in the energy transition.
In 2024, the sector went through a complex year: Although global revenues decreased, companies managed to preserve positive margins. Investments have been progressively shifting from traditional materials —such as coal or steel— towards strategic metals like copper, aluminum, or gold.
“It has been a particularly significant year,” stated Patrick Lahaie, senior partner of McKinsey in Montreal during the presentation of the study. “We are observing increasing geopoliticalfragmentation, a slower energy transition, an incipient recovery in productivity, and signs of a slowdown in decarbonization in certain regions and sectors,” he assured.
Protectionism and geopolitical tension
In this scenario, commodity markets are increasingly exposed to trade restrictions, resource nationalization policies, and economic bloc friction. This was warned by Michel Foucart, an associate in Brussels, who highlighted that, in the last 18 months, restrictions on exports have significantly increased, especially in the case of critical raw materials.
“This generates risks, such as supply disruptions, but it also opens new opportunities:” “incentives, strategic projects or higher local margins,” he explained. Meanwhile, large economies are taking steps to strengthen their supply chains. This is the case of the United States, which has imposed tariffs on key products, or exporters like Indonesia or China, which require greater local processing or even the nationalization of assets.
McKinsey’s report indicates that, in this multipolar context, there is a strategic opportunity to expand into critical materials or emerging geographies, with the support of public policies.
Green slowdown and technological boom
One of the key trends of the current situation in the industry is the moderation of the pace of the energy transition, especially in markets like Europe and the U.S., where sales of electric vehicles have stagnated and renewable energies have lost momentum. “But it is not a radical change:” growth remains strong, just more moderate,” assures Karel Eloot, partner of the firm in China.
Although green demand has cooled, other sectors are compensating for the drop. One of the most dynamic is the technological one, especially that linked to Artificial Intelligence. Data centers, for example, could represent up to 3% of global energy demand by 2030, which would have a direct effect on consumption of materials such as copper.
Furthermore, a new source of demand emerges: increased defense spending, especially in Europe and NATO countries. “If the target of 3.5% of GDP is reached (at the 2025 NATO Summit, member countries committed to increasing their spending to 5% of GDP, 3.5% for essential defense), this could generate an additional 2% to 8% in demand for materials such as aluminum, steel, and copper, driven by technologies such as drones, defense systems, and military electronics,” says the expert.
On the supply side, the geographic concentration remains high. China has consolidated its leadership in the value chain, not only in refining, but also in the development of new assets in Asia and Africa. “Meanwhile, the other countries are diversifying their investments and operations more, although it is an advance that takes time and faces considerable technical and economic barriers,” warned Eloot.
Productivity, affordability and sustainability
During his intervention, Gustav Hedengren, project manager of the firm in Stockholm, addressed how the mining and metallurgical industry is trying to balance productivity, costs, and sustainability in a context of technological transformation and energy transition. After the high-price cycle that began in the 2000s, the large investments did not translate into proportional production increases. Prices began to fall in mid-2010, and companies in the sector focused on operational efficiency.
Starting in 2018, the industry entered a phase of recovery, briefly interrupted by the pandemic, but resumed its growth driven by automation and digital technologies, which have improved both productivity and efficiency.
Hedengren warns that “many future projects are still not economically viable at current market prices,” since, in critical metals such as copper, nickel, and lithium,“the incentive price remains above market levels.” This shows that “itwill be necessary to continue improving productivity or developing technological alternatives” to ensure a sustainable supply. In contrast, uranium presents “a more favorable relationship between supply and price,” although investment is hindered by “the uncertainty about the role that nuclear energy will have in the energy transition.”
Regarding sustainability, and given the aforementioned slowdown, the expert acknowledges that the sector currently accounts for more than 15% of global emissions, its reduction will be “modest” and will mainly come from the decarbonization of the electricity grid, efficiency improvements, and greater use of recycled materials. “Circularity is one of the great opportunities, but not much progress has been made since 2015, except in batteries,” he assures.
Furthermore, he acknowledged a “break between the growing demand for green materials and the real willingness of customers to pay a price for them,” especially in steel and copper. Therefore, he concludes, companies must “focus on the right customer segments and build a clear value proposition that combines sustainability with profitability.”
Materials and energy: parallel perspectives
Since the presentation, Patrick Lahaie insisted that this global vision of materials is fully aligned with the energy perspective that McKinsey published a few days later. In the Global Energy Perspective 2025 report, the firm highlights that the global energy transition is progressing amid significant challenges, marked by political uncertainty, the need for affordability, and growing electricity demand.
Although the intention to reduce emissions and advance towards clean energy persists, fossil fuels continue —and will continue— to play a central role even beyond 2050. Mass adoption of alternative fuels is not expected before 2040, unless strict policies accelerate their implementation.
The increase in electricity demand, driven by the electrification of transportation and the growth of data centers poses additional challenges. Renewable energies and storage technologies will grow, but decarbonization trajectories will vary significantly by region. The report concludes that there is no single way to achieve the climate objectives, and that a more efficient strategy could consist of redirecting investments towards sectors other than electric.
