Materials profitability and cash positions were strong in 2024. Looking ahead, success likely requires capturing growth while improving productivity and delivering sustainable solutions.
In the past year, the materials industry has once again seen several shifts: increasing resource nationalism and protectionism, the rise of new demand vectors from AI and defense, emerging signs of a productive rebound, and the slowdown of decarbonization in selected regions.
Overall, the materials industry contracted in 2024, with metals and mining revenues down 6 percent to approximately $3 trillion, partially offset by growth in other materials sectors, while profitability remained resilient at about $1.3 trillion (with metals and mining accounting for $700 billion), coming with a shift in profit pools from thermal coal and steel toward gold, copper, and aluminum, a shift that has been ongoing for several years.
Geopolitical focus on materials has intensified, with new tariffs, incentives, and export barriers,1 while supply concentration continued to rise for several commodities in both mining and refining. Our analysis shows that measures primarily focus on commodities that appear on countries’ critical minerals lists and have high supply concentration (except for US tariffs).
Looking at the project pipeline, the next decade promises growth opportunities across regions for many commodities.
There are some signs of large-scale diversification, with changes in the top three supplying countries for more than half of the world’s largest commodities (based on revenue). With up to 60 percent of global reserves located outside the top three supply countries—including 62 percent of copper, 44 percent of REEs, and 36 percent of lithium—significant opportunities for future reserve development are likely to emerge beyond today’s announced projects.
Although projected demand growth until 2035 for several commodities (notably steel, copper, and aluminum) decreased compared with last year’s report, overall materials demand remains resilient (except for metallurgical coal, iron ore, and PGMs).
Energy transition materials show strong momentum, with a projected CAGR of 4.5 percent through 2035. However, this momentum has been tempered by a slowdown in decarbonization efforts in some regions, leading to downward pressure on battery materials and REEs, alongside broader economic headwinds.
Looking ahead, defense and data centers are likely to be key sectors to drive increased material demand in the coming years.