Copper is essential for clean energy applications such as solar panels, wind turbines and electric vehicles (EVs), as well as for the expansion of electricity grids.
The surge in demand for the metal, driven by the growing adoption of these technologies, presents a unique investment opportunity for early investors in copper mining companies.
Visual Capitalist’s Bruno Venditti presents this chart from Sprott that explores the growing gap between copper supply and demand through 2050, based on projections from BloombergNEF’s Transition Metals Outlook 2023.
Projection of copper supply and demand until 2050
Copper is naturally abundant on Earth, but extracting the metal at the rate needed for an electrified economy could be a challenge. The timeline to take a copper mine from discovery to production is long, averaging 16 years.
Major producers, such as Chile and Peru, are facing strikes and protests, in addition to the decline of minerals. Russia, ranked seventh in copper production, faces an expected production shortfall due to the ongoing war in Ukraine.
Meanwhile, the growing adoption of carbon-free technologies only underlines the importance of copper.
Global copper producers
High demand for transport and the electricity grid
Demand for copper in the transportation sector is expected to increase 11.1 times by 2050, starting in 2022. Electric vehicles, for example, can contain more than a kilometer of copper cables.
Furthermore, the demand for copper needed to expand the global electricity grid is expected to increase 4.8 times by 2050, compared to 2022.
By 2030, the copper supply gap is expected to close to 10 million metric tons, with copper mining prices and stocks potentially set to benefit.
As the world embraces clean technologies, research and expansion of copper mines will be essential. Early investors who gain exposure to copper miners can benefit from the rapid growth in demand.
Sprott offers convenient exchange-traded alternatives for investors seeking exposure to copper miners.
Thanks to our Telegram channel you can stay updated on the publication of new Economic Scenarios articles.
⇒ Sign up right away ⇐
