Gathering for the Financial Times’s Mining Summit both in person and online last week, chief executives of global copper mining companies sounded the alarm on the insufficient number of copper mines currently under development to supply the surging material needs of the ever-accelerating green energy transition.
Copper prices may have dropped, however demand for the metal, which is not only a key mainstay metal, but also an indispensable component in green energy technology, is expected to increase drastically to keep pace with the material requirements of the global push towards net zero carbon emissions.
According to the Financial Times, its growing application in this field will result “in it being dubbed the ‘metal of electrification’, with forecasts that it will double to a 50mn tonne market by 2035 compared with 2021 levels, according to S&P Global, which predicts a ‘chronic gap’ between supply and demand.”
While U.S. import reliance for copper hovered around 30 to 35 percent in the 2010s, that number has gone up to more than 40 percent in the 2020s, according to the USGS Mineral Commodity Summaries.
Miners are pointing out that a confluence of complex permitting timelines, rising inflation and the fact that the commodity is “harder to find in high quantities in the ground” may have led to a situation “where it’s likely there won’t be enough copper to meet decarbonization goals in the next few decades.”
As the Wall Street Journal outlined earlier this month, these circumstances have prompted mining companies to target “a new but also old source – closed mines, also known as brownfield sites.” The Wall Street Journal points to Sweden-based miner Bluelake Mineral, seeking to reopen a mine site in northern Norway that closed 25 years ago, as well as to Rio Tinto’s Resolution Copper project near Superior, Arizona, which is considered one of the most significant undeveloped copper deposits in the world and would reuse the historic Magma Mine which started production in 1910 and operated until 1996. While the project has strong support from the surrounding community, and began the permitting process in 1997, it is still awaiting permits to begin operation.
With Copper becoming increasingly critical in the context of decarbonization efforts – the material has not (yet) been added to the overall U.S. government’s critical minerals list, the Department of Energy recently designated the material a critical material as part of its 2023 Critical Materials Assessment – and with geopolitical volatility reaching heights not seen in decades with this month’s Hamas assault on Israel, securing key mineral supply chains becomes all the more pertinent, and U.S. stakeholders should look to embrace domestic opportunities to unleash our mineral potential where possible.
