A Bank of America commodity strategist warns that the world may be “running out of copper” amid widening supply and demand deficits. Suggesting that prices could hit $20,000 per metric ton by 2025, the strategist’s note called out that inventories are currently at levels seen 15 years ago, and that existing stocks may cover just over three weeks of demand.
A recent CNBC story on the issue outlines how demand for traditional mainstay metals like copper is also surging because of its “vital role in a number of rapidly growing industrial sectors, such as electric vehicle batteries and semiconductor wiring.”
CNBC cites David Neuhauser, founder and managing director of U.S. hedge fund Livermore Partners, who, in light of growing investment in electrification as countries move towards greener infrastructure believes that “copper is the new oil,” and predicts that the metal will look “tremendous for the next five to 10 years.”
As we’ve learned the hard way over the course of the coronavirus pandemic, with increased demand for critical minerals — which is in large part driven by a global push for carbon neutrality — come increased supply challenges.
These challenges are compounded by the inherent irony of mineral resource supply: Proponents of a green energy shift for the United States tend to vehemently oppose the domestic development of the very metals and minerals that make that shift possible.
Laura Skaer, a member of the board of directors of the Women’s Mining Coalition and former director of the American Exploration & Mining Association, outlines a case in point for copper in a recent piece for Morning Consult.
Skaer points to recently-introduced federal legislation that would stop the development of a big copper mine near Superior, Arizona. The mine could supply a quarter of our nation’s copper demand and has strong support in the community, as Skaer writes. The federal bill, however, would, in Skaer’s view “close the door on a project that will benefit Arizona and the entire nation, expose the federal government to substantial takings claims, and send a signal to other companies that America is closed for business when it comes to mining.”
“The United States can become a domestic minerals supply-chain powerhouse — but not if Congress withdraws mining permission from areas where mineral development is a vital source of jobs and tax revenue.
If we want to have a serious conversation about infrastructure and clean energy, we have to start at the beginning of the supply chain by boosting our domestic supply of copper. The inescapable fact is that mines can only be located in the few places where economically viable mineral deposits have been formed and discovered. Arizona’s Copper Triangle is one of those rare places.
For the sake of the clean energy future so many Americans want and the national security and the economic investment we need, the Resolution Copper project must not be delayed any more.”
If Copper is the new oil, we should act accordingly.