BHP, an international mining group, has made bold predictions about the world copper market. According to its specialists, global copper demand could see an elevation of approximately 70 percent by 2050. This spike would be tremendously driven by the global pursuit towards a future of cleaner energy alternatives and the overall emphasis on decarbonization.
Copper is a mineral with an array of versatile applications, making it a critical component across various industries. It lies at the heart of many electrical systems, acting as a conduit in countless technological, construction, and manufacturing processes. Its unique properties, including thermal and electrical conductivity, corrosion resistance, and malleability, have helped copper become integral in our increasingly technological world.
The shift towards renewable energy and electric vehicles is one of the major factors pushing the demand growth prediction. As the world makes strides to combat climate change, the consumption of clean, renewable, and sustainable power sources such as wind, solar, and hydroelectric power grows. These renewable energy technologies require significant amounts of copper for their installations and operations. Solar panels, for instance, are heavily copper-dependent, with a typical solar panel system having up to 5.5 tonnes of copper. Electric vehicles, another growth industry in the renewable sector, also require large amounts of copper for their batteries and wiring.
In addition to the continued growth of electric vehicle use, the transition from combustion engines to more energy-efficient models will require even more copper. BHP’s Chief Economist, Huw McKay, expressed that one of the major driving forces behind the copper demand explosion is the move away from internal combustion engine vehicles. These vehicles average at about 20kg of copper used, compared to electric vehicle’s 60-85kg, an increase of around 300-425 percent.
Further driving the spike in demand, copper will play a crucial role in evolving the infrastructure of fast-growing cities and the development of worldwide 5G networks. The construction sector, for example, consumes more than two-thirds of the total copper production for use in building wiring, pipes, and roofing. With the expansion of cities and the need for smart, connected homes, the demand for copper is unlikely to see a decline.
Similarly, the impending shift to 5G technology will require the installation of a vast number of small base stations, which are heavily reliant on copper. The 5G wave will trigger a surge in demand for data centers, which again necessitates a great deal of copper in their construction.
However, the growing copper demand may pose unprecedented challenges to the supply side. Mining companies need to scale up their copper mining operations significantly to meet this surge in demand and minimize the projected copper deficit.
Recognizing this concern, BHP has been heavily investing in its copper mining operations with a move to expand its Spence copper mine in Chile. This would allow BHP to maintain a significant role in the future supply chain of this essential metal.
With global copper demand forecast to surge so tremendously, the international market urgently needs increased copper production and secure supply chains to keep pace. Now, more than ever, copper’s crucial role in the fight against climate change and the transition to a decarbonized future highlights its importance to the global economy. Global institutions and governing bodies must work together with copper-producing companies like BHP to ensure a sustainable supply chain that can meet this heightened demand, now and in the future.
