On Copper Demand

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The Green Transition Requires Copper

According to an S&P report on The Future of Copper, copper demand is expected to almost double by 2035 and will continue to grow as the world pursues the global transition to net zero. Copper’s natural conductive properties make it the material of choice for electrification, a foundational strategy for meeting the goals of the Paris Agreement. Nearly 70 percent of copper is used in electrical applications due to its high electrical and thermal conductivity and safety. Green technologies, such as renewable energy systems, electric vehicles (EVs) and energy-efficient infrastructure, rely on copper, and as the world implements these technologies, demand for copper will continue to climb. For example, renewable energy systems require up to 12 times more copper than fossil fuel-based systems, and EV’s use between two and three times more copper than internal combustion engine (ICE) vehicles. Consequently, copper remains a global enabler of the green transition and supports technologies essential to the decarbonization of other industries, especially the buildings and construction, transportation, and energy sectors.    

 As world leaders pass legislation to achieve net zero—from the $1 trillion infrastructure bill in the U.S. to the strategic framework of the European Green Deal to widespread national net commitments such as China’s Dual Carbon Goal—green technologies play a critical role in making these policies a reality. However, COVID-19 pandemic lockdowns and geopolitical instability have led to global supply chain disruptions, and the ripple effects continue to increase risks for meeting the demand generated from these policy goals. Long-term, raw material industries must consider how to navigate increasing demand to support the energy transition while dealing with immediate challenges facing the global supply chain.   

Primary and Secondary Production Are Needed to Meet Demand 

While United States Geological Survey (USGS) data has estimated that since 1950 there has always been an average of 40 years of copper reserves and 200 years of copper resources left, copper mining alone will not be sufficient to meet the growing demand of the energy transition. Copper occurs naturally in the earth’s crust, and more is discovered every year. Current global copper reserves (deposits that have been discovered and evaluated to be profitable) total 870 million tonnes and global copper resources (reserves and estimated undiscovered copper deposits based on geological surveys) make up another 5,000 million tonnes. Even as more copper is found every year, the process of exploring the land and securing permits limits the speed at which new sites can be developed or expanded. Mine sites also encounter challenges related to differing ore grades (i.e., concentration of copper in the earth’s crust), which in the case of lower ore grades (i.e., less than one percent copper), can mean more time and energy are expended in the mining process. Policy and technological answers to these limitations must be explored to meet demand.   

 Recycled copper is one part of the solution. Copper is a 100 percent recyclable material and can be recycled over and over again without any loss to its chemical or material properties. It is estimated that two-thirds of the 690 million tonnes of copper produced in the last 100 years is still in productive use in applications such as computers, cars, cell phones, plumbing, motors or wires. Society’s “urban mine” contains an amount of copper equivalent to 33 years of mine production. 

Because copper is traditionally used in applications with long lifespans, much of the existing copper stock is slow to re-enter the market. Additionally, increasingly complex product designs require sophisticated recycling technologies, which rely on robust consumer collection systems to re-capture the copper before it reaches a landfill. Regardless, recycling alone is not enough to meet a growing population’s needs. Growing demand requires both primary (e.g., mining) and secondary (e.g., recycling) production.  

Removing Barriers to Access with Policy and Partnership 

The important and urgent shift to net zero requires government and industry to remove barriers standing in the way of a sustainable and responsible mining.  

According to the International Energy Agency, it takes an average of 16.5 years from material discovery to first production, often requiring billions of dollars in investment in advance. This extensive and conscientious planning, from data analysis and site testing to reclamation proposals and social initiatives, ensures site viability and reduces potential negative impact to the environment and local communities. International Copper Association (ICA) members remain committed to ensuring responsible, sustainable and socially conscious production practices at every stage of the mining process. However, increasingly complex permitting requirements, approval delays and other economic barriers connected to domestic politics often extend these development processes beyond necessary timeframes, with permitting processes varying widely among different countries. By leveraging industry expertise, educating stakeholders on material essentiality and strengthening national geological surveys, governments and industry can work together to ensure these permitting processes are streamlined, simplified, standardized and de-politicized to safeguard local communities while encouraging new mining opportunities. 

The status quo will not facilitate necessary change. Governments, manufacturers, recyclers and end users need to collaborate to establish a circular economy across the copper value chain. Product designers must design for sustainability to facilitate recovery of raw materials at the product’s end of life. Suppliers and manufacturers must collaborate to establish closed-loop recycling streams for metal scraps generated during manufacturing. Recyclers need to expand investment in cutting-edge technologies to support the clean recovery of essential raw materials from complex products. Governments can help incentivize due diligence in the recycling chain and consumer collection. Only through partnership and collaboration can valuable raw materials, such as copper, be efficiently collected and reused, increasing global recycling rates and helping secure the value chain.  

Increasing Efficiency Through Innovation 

Innovation serves as the great disruptor in the copper demand story. Innovative practices and technologies have increased mine production while reducing impact to the environment and risks to worker safety. Today’s modern mine uses everything from artificial intelligence (AI) and remote sensors to automated electric vehicles and advanced extraction and processing techniques to make production more efficient than ever.   

Advanced technology can help solve industry challenges, such as decreasing ore grades. ICA member, Freeport-McMoRan uses artificial intelligence and remote sensors at its mine in Bagdad, Arizona, to optimize its mill’s controls for seven distinct types of ore, which led to a more than 10 percent increase in copper production at the site. Additionally, ICA members have invested in new processes to make extraction from lower grade ores possible, enabling companies to re-process mine tailings (i.e., waste from the mining process) and recover previously lost material.   

Advances in AI, digital twinning and automation have increased productivity and safety at ICA member mine sites. Rio Tinto uses artificial intelligence for monitoring and process optimization through their Mine Automation System, which acts like a network server to bring together data and real-time visualizations through internet of things (IOT) digital twinning technology at 98 percent of its mine sites. This process has helped the company increase speed and efficiency in their automated processes, including their automatic vehicles. Automatic and continuously operating vehicles and mining equipment allow production to continue without increasing worker risk or fatigue. For example, Anglo American employs microwave technology to pre-condition rock so it is faster and less-energy intensive to mine. They also utilize automated and continuous rock cutting vehicles to eliminate the need for explosive blasting. Boliden has introduced automated and electric mining vehicles and haul trucks to increase operational efficiency, and BHP Billiton has begun automating drill technology at its Spence mine.  

Implementing technology that not only increases productivity but addresses environmental and safety concerns will continue to transform the industry and attract increasing investment in these areas. However, no matter what innovation the future will bring, only partnerships across the value chain, united by shared ambitions, will enable the solutions necessary to meet copper demand sustainably and responsibly. Through collaboration, whether in the production process or at a product’s end of life, the copper industry will be poised to remain a solution provider for the transition to a net zero world.  

05 Septiembre 2022

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