A recent study predicted that the market for copper will be short of supply in the next few years, unless i specialized mining groups they don’t invest billions in new productions.
Copper is used in plants renewable energyin electrical cables, in electric vehicles and in data centers, all of which are in greater demand than ever thanks to megatrends such as decarbonisation and artificial intelligence. The problem is that existing mines are set to produce less copper in the coming years due to depletion of deposits, and companies are not investing enough in new sites to make up the difference, much less increase production. Instead, they appear more interested in buying copper-focused rivals, as BHP’s proposed takeover of Anglo American shows. In fact, according to consultancy Cru Group, miners will have to spend $150 billion more between 2025 and 2032 to fill the suspected supply gap.
Miners have their reasons for cutting. It is increasingly difficult to find new high-quality sources for the metal and mining costs are rising, while social and environmental protest against mining grows. Furthermore, copper is an indicator of the economy, with demand rising and falling depending on the state of the world’s industries. This makes miners very cautious, in case they are caught by surprise by a sudden drop in demand just as they are finishing their projects.
Copper mines take years to develop, so miners must be convinced that future copper prices will justify the costs of expansion. Currently, BlackRock believes the price of the metal needs to reach a record high of $12,000 a ton – about 20% above current levels – to incentivize serious spending. And the stakes are high: If miners don’t churn out more copper, prices could spiral out of control, putting technologies are at risk which are presented as potential saviors of the world.
