The pressures of industrial development, as well as progressing electrification and decarbonisation as part of the energy transition, are likely to turbocharge demand for the red metal
Appropriately for a mining-industry executive, he has a gravelly voice, which he uses to conjecture about a potential copper crunch. The pressures of industrial development in the emerging world, as well as progressing electrification and decarbonisation as part of the energy transition, are likely to turbocharge demand for the red metal.Global, a consultancy, expects copper consumption to double to 50m tonnes between now and 2035. Yet unless prices rise sharply, supply is unlikely to keep up.
The comparison between the oil and copper businesses is useful. It helps illustrate the complexities of mining the metal. It also hints at how shortages may be overcome. Start with the differences between the two commodities. As Mr Adkerson explains, the technology for finding copper is not as effective as the seismic testing used to identify hydrocarbon reservoirs because copper deposits are spread over vast areas. Years of exploratory drilling are required.
Next consider the similarities. During the commodities supercycle up to the mid-2010s, both industries blew shareholders’ money on wildly overambitious projects, which landed them in the sin bin. Even as concerns about oil and copper supplies have mounted, investors have demanded shareholder payouts rather than risk equity on big capital projects. This has been exacerbated by pressure to reduce resource extraction from investors worried about environmental, social and governance issues.
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