copper

Supply chain challenges in the wake of the coronavirus pandemic, Russia’s war on Ukraine, rising resource nationalism in the southern hemisphere, and now China’s Xi Jinping doubling-down on its zero-Covid policy this week which may lead to more lockdowns with serious economic and trade consequences – critical mineral supply chains can’t seem to catch a break.

As the stakes continue to get higher and stakeholder pressure to take action mounts, it is encouraging to see that mainstream awareness of the issue is increasing.

Case in point: CNN’s Fareed Zakaria dedicating a “Last Look” segment of his Global Public Square program to the new race for natural resources triggered by the green transition.

Followers of ARPN will appreciate that unlike much of the coverage of the critical minerals challenge we’re seeing lately, which often might have you believe that concerns only revolve around the “battery criticals”lithium, graphite, cobalt, nickel, and manganese, Zakaria’s segment makes clear that the challenge is much bigger – and includes many other metals and minerals, including what we at ARPN have dubbed the “unsung hero of the green energy transition” and one of the “most critical non-criticals” (alluding to the fact that the U.S. official government critical minerals list has thus far not included it):

Copper.

As we previously argued, while less flashy and headline-grabbing that some of its tech metal peers, Copper deserves far more credit and attention than it has been getting — not least due to its versatility stemming from traditional uses and an increasing range of new applications.  Then there’s Copper’s Gateway Metal status, with the metal yielding access to Critical List co-products essential to “manufacturing the advanced technologies that will power or generations to come, such as Cobalt, Nickel, Tellurium, Molybdenum, Rhenium, Arsenic and REEs.

In the context of advanced energy technology, Copper is an indispensable component for the manufacture of EVs, wind turbines, solar panels, and the electric grid.   The manufacturing process for EVs requires four times more Copper than gas powered vehicles, and the expansion of electricity networks will lead to more than doubled Copper demand for grid lines, according to the IEA – so it’s good to see mainstream media is including the material in its coverage.

Zakaria rightly outlines the challenges stemming from the United States’ over-reliance on foreign supplies, and China’s having cornered the market not only in the supply, but also the processing segment – a challenge Laura Skaer, member of the board of directors of the Women’s Mining Coalition and former director of the American Exploration & Mining Association, outlined succinctly in a piece for Morning Consult a year ago, arguing that “China already refines 50 percent of the world’s copper and the United States only refines about 3 percent. National security experts have warned that relying on China for critical supply-chain materials like refined copper poses a serious threat to America’s national security interests.”

While the U.S. has taken important steps to reduce our over-reliance on foreign metals and minerals and the processing thereof, much more remains to be done.  Zakaria puts his finger on the crux of the issue stakeholders are currently grappling with.

He says:

“The minerals industry isn’t as popular as renewable energy – particularly on the Left. There are real environmental hazards. But if people want to protect the planet from climate change and authoritarian powers, they will have to get onboard with new mineral projects.”

He continues:

“So far the process very slow, according to the IEA. Even after mineral deposits are discovered somewhere, the average time to production is over fifteen years. Some of that is planning and construction, but governments can streamline the permitting process to get these projects moving.”

While pointing to the importance of other components that ARPN has consistently highlighted as part of a comprehensive “all-of-the-above” approach to mineral resource security – recycling and closed-loop solutions as well as increased R&D in the materials science segment – Zakaria closes:

“This will have to remain a priority for years and years to come. For the sake of the planet and international security, we will need to dig deep, quite literally.” 

Watch the full segment:

CNN, Fareed Zakaria, Global Public Square, Last Look: The green transition will trigger a new race for natural resources, 4/30/2022

Pandemic induced supply chain shocks, increasing resource nationalism in various parts of the world, and Russia’s invasion of Ukraine exactly one month ago have brought the stakes for securing critical mineral resource supply chains to a whole new level.

The emerging geopolitical landscape has sent countries scrambling to devise strategies to not only ensure steady supply of oil and gas in the wake of looming cuts of exports from Russia, one of the major global supplier of fuel minerals, but also to secure current and future needs of the non-fuel metals and minerals underpinning 21st century applications, ranging from green energy to defense technology.

Over the past few weeks, we have looked at how Russia’s war on Ukraine and rising resource nationalism in Central and South America and parts of Africa is affecting the global supply picture for titanium, lithium, nickel and cobalt.

As we end the week, we’re taking a look at copper – which often gets lost in the media shuffle.

Followers of ARPN know that while this mainstay metal may be less flashy and headline-grabbing than some of its tech metal peers, it deserves far more credit and attention than it is currently getting.  We have long touted the versatility, stemming from its traditional uses, new applications and Gateway Metal status.  Copper is also an irreplaceable component for advanced energy technology, ranging from EVs over wind turbines and solar panels to the electric grid.   The average EV requires four times more copper than gas powered vehicles, and the expansion of electricity networks will lead to more than doubled copper demand for grid lines, according to the IEA.

The West’s severing of ties with resource-rich Russia has sent commodity prices skyrocketing. The Wall Street Journal this week cited a Morgan Stanley’s analysis which found that “there isn’t enough thermal coal, nickel, aluminum or palladium being produced to meet global demand this year. Other markets including copper, which were forecast to be in balance before the Ukraine conflict, could face material shortfalls if Russian supply dries up.”

This development comes less than a year after analysts warned that the world might be “running out of copper” amid widening supply and demand deficits, suggesting that prices could hit $20,000 per metric ton by 2025, and pointing to inventories at levels last seen 15 years ago.

As the Wall Street Journal points out, there is no easy way out of the critical mineral resource challenge, as “years of underinvestment in new mines means they don’t have additional production that can be brought on quickly. After a decadelong focus on productivity, existing operations are mostly running at full tilt. Difficulties in getting permits to build pits and community opposition have slowed developments in some countries, and scuttled projects in others.”

And, as Laura Skaer, a member of the board of directors of the Women’s Mining Coalition and former director of the American Exploration & Mining Association, outlined in a piece for Morning Consult last summer, the challenge is not just mining, but also processing:

“Last year, the United States imported 37 percent of the copper we used. China already refines 50 percent of the world’s copper and the United States only refines about 3 percent. National security experts have warned that relying on China for critical supply-chain materials like refined copper poses a serious threat to America’s national security interests.” 

However, from a U.S. supply perspective, there is reason to be optimistic. While snubbing the material again for its updated Critical Minerals List, the Biden Administration has recognized copper as an integral component of Lithium-ion battery technology, in the context of being what we have called a “gateway metal” to other critical materials, and for its “use across many end-use applications aside from lithium-ion cells, including building construction, electrical and electronic products, transportation equipment, consumer and general products, and industrial machinery and equipment” in its 100-Day Supply Chain Review report.

Coupled with new reports that “US regulators are warming to approving new domestic sources of electric vehicle battery metals, as Washington bids to avoid a reliance on strategic minerals imports similar to that on crude oil,” this is an encouraging development. In this context, U.S. Secretary of Energy Jennifer Granholm and other officials have been cited as stating that “the need to domestically produce more metals is rising as EVs go mainstream,” but that new mines must not harm the environment.

This is where the private sector is increasingly stepping up to the plate, with the latest case in point being a deal between Lion Copper and Rio Tinto America for a stake in copper assets in Mason Valley, Nevada, where the stakeholders will “explore the potential commercial deployment of (…) Nuton copper leaching technologies in a historical mining district with a large copper endowment,” and look to not only “unlock additional copper, but to also deliver low carbon production with significant environmental benefits through reprocessing old stockpiles and tailings, and reducing waste from new and ongoing operations.”

ARPN has featured other examples of industry harnessing advances in materials science and technology to help develop domestic critical mineral resource supplies while maintaining and advancing sustainable mining practices on numerous occasions, and will continue to do so.

As the National Mining Association’s Rich Nolan wrote earlier this week for RealClearEnergy:

“Russia’s invasion of Ukraine and its effect on global commodity markets has added new urgency to get to work. Fortunately, our challenge is one of policy, not geology. We have the resources to supply significant domestic production for many of the metals most essential to advanced energy technologies.” 

Now is the time to get serious about harnessing them.

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