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grade decline alone could remove 2 of that means more copper. And in the files and it is the same for some of the
mtpa from mine supply by 2030, “with US, we are already seeing orders placed emerging jurisdictions in Latin America,”
resource depletion potentially removing by major manufacturers which is hav- he said.
an additional 1.5-2.25 mtpa by this date, ing a positive impact on demand. While While resource nationalism is rising in
depending upon the specifics of the case Trump promised a lot, Biden will make it emerging copper-producing nations, es-
under consideration”. all real. We will see growth in domestic tablished countries are facing increased
Wiggers de Vries sees the building manufacturing, particularly for things like social and environmental problems.
transport thematic as playing a key role wind turbines and major cabling and wir- “One of the reasons we haven’t seen
in copper demand from the middle of the ing companies are already looking for US big project announcements is because of
decade. investments.” the challenges faced by industry,” Wig-
“The transport electrification dynamic That demand switch could also have gers de Vries said. “In North America,
is already a driver in 2021 but looking ramifications for supply. End-users such projects like Resolution, Twin Metals
ahead from 2025, there will be an uptick as the major car manufacturers and and Pebble have been in the pipeline
in demand from the EV sector,” he said. technology companies are beginning to for many years but facing increasingly
Lithium, cobalt, graphite and latterly heavily scrutinise their supply chains, de- difficult environmental and social head-
nickel have all been blessed with the EV manding ethical mineral production with winds.
boost, and while a significantly larger low to neutral carbon footprints, no other “Even in Chile and particularly Peru
overall market, copper appears the next environmental issues and strong social there are growing social issues. MMG
commodity to be brought into the battery and human rights credentials. Ltd is facing problems at Los Bambas
minerals basket. In a copper sector where high-quality and other companies are having trouble
“A ‘take-off’ of demand from copper-in- prospects are already scarce, greater in Peru.”
tensive, easier-to-abate sectors [renew- ESG demands could see the develop- The risk profile is unlikely to change in
able power generation, the electrification ment pipeline dry up completely. the short term with both Chile and Peru
of light duty transport, and the infrastruc- BHP is already predicting new devel- set for presidential elections this year,
ture that supports them both] is expected opments to come from “higher grade with mining policies and investment re-
to be a key feature of industry dynamics greenfield [projects] in a higher risk juris- gimes at the heart of the political debate
in both countries.
It is a trend among copper develop-
ments on every continent. According
In North America, projects like
to a 2019 analysis by the University of
Resolution, Twin Metals and Pebble Queensland’s Sustainable Minerals In-
stitute (SMI), of the largest undeveloped
have been in the pipeline for many years but copper orebodies across the globe, more
facin
“g increasingly difficult environmental than two-thirds had non-economic fac-
tors influencing investment decisions.
and social headwinds. “You could assume that further innova-
tion would be needed to offset any de-
cline in price and grade, but the research
in the second half of the 2020s,” BHP diction”, raising both the marginal price of showed 75% of the 308 copper orebod-
said in its half-year commodity outlook. production and the risk rating of projects. ies we looked at had price-insensitive
“Looking even further out, long-term Wiggers de Vries said CRU was al- risks attached to them and that low cop-
demand from traditional end-uses is ex- ready experiencing a shrinking risk pro- per grades was the sole challenge in only
pected to be solid, while broad exposure file from clients. 3-4% of the undeveloped orebodies we
to the electrification mega-trend offers “Five or six years ago DRC was the analysed,” SMI’s Professor Rick Valenta
attractive upside.” new frontier for copper because of the told Paydirt.
The unfolding clean energy thematic grades but now our clients are saying While technological breakthroughs
could be the defining trend for copper DRC and Zambia don’t fit their risk pro- have been effective in lowering operating
demand for a decade or more. While its
fortunes have been definitively hitched to
the Chinese economy since the begin-
ning of the millennium, EV uptake and
renewables adoption have the potential
to reset the flow of copper back to the US
and Europe and the drivers are more ex-
tensive than EVs.
“It is tempting to focus on EVs, but
my personal opinion is that wind and
other renewables will be the real game-
changer,” Roskill principal consultant Jon
Barnes told Paydirt. “Last year was the
fastest year ever for new wind power in-
stallations and it is only going to acceler-
ate.
“China is embracing decarbonisation While EV production is boosting demand for lithium, nickel, cobalt and graphite, copper is
and turning to wind, solar and nuclear; all expected to be the main beneficiary of the rollout of charging station infrastructure

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