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Future ‘mismatch’ between copper supply and energy transition demand

The ongoing energy transition is causing will likely cause a ‘very large’ bottleneck for The ongoing energy transition likely to cause a ‘very large bottleneck’ for copper, according to a new report by IHS Markit and S&P Global.

‘Substitution and recycling will not be enough to meet the demands of electric vehicles (EVs), power infrastructure, and renewable generation,’ it says. Copper demand is projected to double from 25 million tonnes today to about 50 million tonnes by 2035 and on to 53 million tonnes by 2050.

‘The chronic gap between worldwide copper supply and demand projected to begin in the middle of this decade will have serious consequences across the global economy and will affect the timing of net zero emissions by 2050,’ the analysts say.

The shortfall will reach 9.9 million tonnes in 2035 in a ‘rocky road scenario’ based on a continuation of current trends in capacity utilisation of mines and the recycling of recovered copper. This would mean a 20% shortfall from the supply level required for the 2050 net zero target.

In this case, the United States would have to import two-thirds of its refined copper by 2035 to meet demand. ‘The gap arises even under assumptions of aggressive capacity utilisation rates and all-time-high recycling rates in the “high ambition scenario”, the report states. In this situation, the US would still need to import 57% of the refined copper it needs.

It doesn’t help that technologies critical to the energy transition including EV charging infrastructure, solar photovoltaics, wind, and batteries all require much more copper than conventional fossil-based counterparts. This means that, unless new copper supply comes online soon, the net zero target will be short-circuited and ‘remain out of reach’.

The report on the global copper ‘mismatch’ is available here.

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