Copper Rush: Mining Industry Surges Ahead in Anticipation of Soaring Demand

Although it is a non-precious metal, copper is emerging as one of the most extensively used metals among many key industries. Due to its high conductivity, copper offers a wide range of applications in construction, electronics and transportation. Copper's role especially has been vital in the global green energy transition, which requires massive electrification worldwide.

Since the Paris Agreement on climate change, global copper production has grown considerably, increasing 20% in 2022 from the 18.5 million tons in 2014, according to the U.S. Geological Survey.

Large-scale electrification is particularly driven by investments to improve transmission lines and grid stability as well as support the rise of electrical vehicles, which use twice as much copper than traditional automotives. The growth of renewable energy technologies, like solar and wind power, also require large amounts of copper and is further boosting the demand for the metal.

Industrial Info is tracking 1,282 active copper mining projects globally worth US$261.06 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a list of detailed project reports.

South America leads the spending with a massive US$109.97 billion and accounts for about 40% of the total global investment, followed by North America with investments worth US$68.29 billion, and Asia with US$34.87 billion in investment.

Chile, the U.S., Peru and Canada are the top countries that are bringing in the majority of investments in copper mining. Chile and Peru account for about 31% of the total spending. The U.S. is investing about 15% and Canada contributes 10% of the total investment.

Teck Resources Limited (NYSE:TECK) (Vancouver, British Columbia) (US$17.89 billion), Rio Tinto Group (London, England) (US$13.88 billion), and Codelco (Santiago, Chile) (US$13.58 billion) are three top companies investing in copper mining projects and are responsible for a considerable share of the total spending.

In a joint venture with Newmont Corporation (NYSE:NEM) (Greenwood Village, Colorado), Teck Resources is planning to invest about US$3.87 billion in the grassroot Galore Creek Above-Ground Copper-Gold-Silver Mine & Mill in British Columbia, which involves 322 million pounds per year of copper production. Subscribers can click here for the project report.

Another US$6 billion of spending is being planned by Rio Tinto, which is looking at the feasibility of redeveloping a copper mine at its East Plant in Superior, Arizona, to extract 500,000 tonnes per year of copper. The project has a low probability of moving forward as planned. Subscribers can click here for the project report.

Codelco is investing US$2.5 billion in its El Teniente Underground Copper Mine Addition (Andes Norte) in Chile and is aiming to extract 130,000 tonnes per day of copper ore. Subscribers can click here for the project report.

Despite copper's increasing importance and large investments coming in, only about 16% of the total investments in copper mining projects have materialized toward the engineering and construction stages.

According to a report by McKinsey & Company, current demand for electrification copper stands at about 25 million tonnes per year, and by 2031, it is expected to increase to 36.6 million tonnes, but the copper supply is projected to be 30.1 million tonnes, thus leaving a looming supply-demand gap of 6.2 million tonnes.

Fifty-seven percent of copper consumption is driven by China. As per a press release by the International Copper Study Group (ICSG), the expansion of China's electrolytic capacity is the primary force driving the global copper growth in 2023 and 2024. Nonetheless, several projects outside China are gaining traction, aligning with the "China+1 policy." Many battery manufacturing facilities and automotive units are being set up or planned in countries beyond China, bolstering the demand for copper globally.

The demand for copper is expected to grow at a significantly faster rate as the race to reach net zero carbon emissions is gaining momentum worldwide. To meet this growing demand, copper production is expected to continue to ramp up.

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