Meeting Future Copper Demand

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Demand for copper is growing. It is expected to jump by as much as 50 percent over the next 20 years alone, and this growth is part of a wider trend. As the World Bank’s 2017 report, “The Growing Role of Minerals and Metals for a Low Carbon Future,” points out, we could see a ten-fold rise in demand for metals, including copper, by 2050 as the world moves toward a low carbon energy future.

Several long-term trends are presently driving growth in copper demand and are expected to continue to do so in the coming decades. These trends include increased consumer use of electronics, wider uptake of electric vehicles (EVs), increased use of renewable energy sources and energy efficiency—and all require significant amounts of copper to function.

Is there enough copper to meet this growing demand? Currently global copper reserves are estimated at 830 million tonnes (US Geological Survey [USGS], 2019), and annual copper demand is 28 million tonnes. Furthermore, according to USGS data, since 1950 there has always been, on average, 40 years of copper reserves available and over 200 years of resources, which include reserves, discovered and potentially profitable deposits and undiscovered deposits predicted based on preliminary geological surveys. These copper resources total 5,000 million tonnes (USGS, 2014 & 2017). In addition to the known reserves, it is worth noting that 35 percent of demand is met with recycled copper, significantly reducing the need for mined copper.

So, the data is clear. There is enough copper to meet current, and future, demand—even taking into consideration the expected growth in demand for copper in the coming years. While this shows copper will be there to enable more renewables and EVs, using copper to meet this demand needs to be done smartly and efficiently. To make sure this is the case, investment by industry will be required, as will political certainty and stability.

The copper industry is already investing significantly in innovation and sustainable solutions. On average, the members of the Copper Alliance® invest a combined $20 billion a year to improve their contribution to sustainable development in areas such as protecting the environment and ensuring the safety of their operations. This alone, however, is not enough. Although it is true that industry can, and should, do more to ensure copper is extracted, used and recycled in a sustainable way, there also needs to be political stability and a regulatory environment favorable for such investment.

Copper is found in more than 20 countries across the globe, with the world’s largest producers being Chile, Peru, China and the U.S., according to the International Copper Study Group (ICSG) in 2017. Extracting copper, therefore, is not reliant on one particular country or region, as is the case for other raw materials. This diversity translates into greater stability for the copper market and lowers the copper risk profile.

However, the stability of copper being produced in various regions needs to be matched with political certainty and stable permitting conditions if copper is to be extracted and processed efficiently and sustainably. Issues like permitting processes, which are often slow for existing mines to expand to meet growing copper demand, could be better streamlined and would benefit from more political certainty.

Political certainty and a stable permitting framework also ensure environmental standards and community engagement are implemented and upheld by industry.

Recycling and the circular economy must be considered when talking about meeting future copper demand. Copper is currently recycled at significant rates. ICSG estimates that, on average, 35 percent of global copper use came from recycled copper. By its nature, copper is a circular material as it does not lose quality when it is reused for another function. Not only will recycling more copper help to meet demand, but it will also make the industry even more sustainable and conserve more of the planet’s natural resources.

Despite already significant recycling rates, the copper industry can go further. There is still untapped potential for the industry to recycle. This is an economic opportunity the industry must seize, helping to sustain their own operations but also creating a more sustainable economy long term.

While the copper industry’s significant recycling rate and potential for even more recycling are impressive, recycling alone will not be enough to meet demand and ensure a stable supply of copper. Continued mining for new copper will be needed. The solution to meeting the growing demand sustainably is a combination of the two, an efficient and sustainable mining framework with proper environmental standards and high recycling rates to get the most out of the copper currently on the market.

Even as demand continues to grow due to consumer and industry trends, the stable supply of copper will endure. However, how this supply of copper is used and extracted still depends on other factors. To maintain this stable supply in an efficient and sustainable way, there must be investment from industry and the political stability necessary to allow this investment to happen. This does not mean higher recycling rates and a more circular industry are not needed. Both components are vital for the long-term stability and sustainability of the industry, and we must take a holistic approach to these issues to guarantee a viable and responsible copper industry for many years to come.

*Photo provided by Teck Resources.

05 June 2019

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Colin Bennett

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