Copper is an important metal that we heavily rely on for power, lighting, heating, communications, and more. It conducts both heat and electricity very well, and it can be formed and stretched into complex surfaces without breaking due to its high ductility and malleability. These physical properties make copper highly favorable for electrical equipment and industrial machinery, such as wiring and motors.
The use of copper is widespread, and its demand is expected to grow as industries that support the transition to low-carbon energy and green infrastructure, such as the electric vehicle industry, flourish. In fact, just a typical battery electric vehicle contains 183 pounds of copper in everything from wiring to rotors. Goldman Sachs in a recent report, has even termed copper as “the new oil”, but will copper supply be able to meet future demand?
Disruptions caused by the coronavirus pandemic resulted in a 2.0% decrease in refined output from 2019 to 2020. During this time, capacity stalled, and investments to expand copper supply were delayed. Looking beyond 2020, many analysts see a supply deficit in the copper market that is set to worsen over the next several years as growing demand from the power and construction sectors is compounded by the proliferation of electric vehicles. To balance the copper market by 2030, it is estimated that approximately 10 million metric tons of additional copper production is required (Exhibit 1). Closing such a gap would require building the equivalent of eight projects the size of BHP Group’s Escondida mine in Chile. The Escondida mine is the world’s largest copper mine with an annual capacity of 1.4 million metric tons of copper production.
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