A Global Copper Crunch Is Looming
Meanwhile, Foran Mining expects to commence operations at its McIlvenna Bay mine in Saskatchewan in 2026.
SEATTLE (Scrap Monster): The International Energy Agency (IEA) expects a major copper deficit to emerge over the next decade, as demand for the metal rises sharply. Unless global mining for copper is expanded at an accelerated rate, demand could outstrip supply by as much as 30 percent. Meanwhile, several new copper powers are expected to emerge to counter Chinese dominance of the global copper market, with the development of new mining projects. There could be a supply shortage of copper by as much as 30 percent by 2035 as global demand increases, mainly owing to the energy transition and artificial intelligence development, the IEA’s critical minerals analyst, Shobhan Dhir, stated at the annual Critical Minerals Association conference in December.
There are several challenges facing the copper mining sector, including declining ore grades, rising capital costs, and lengthy project development timelines. This makes it more difficult to scale up copper production compared to other critical minerals. Dhir explained, “Copper is the one we're really concerned about… So, this is a really challenging mineral to ramp up supply quickly. So, we are particularly concerned, and I want to highlight that as one of the key global issues going forward.”
Meanwhile, the International Copper Study Group announced in October that it expected the global refined copper market to experience a deficit of 150,000 metric tonnes in 2026, compared to the previously anticipated surplus of 209,000 tonnes, due to slower production growth.
Copper is used for a range of applications, such as electrical wiring, power transmission, plumbing, electronics, renewable energy technologies, and industrial machinery, thanks to its electrical and thermal conductivity, corrosion resistance, and malleability. The Copper Mining Market was valued at $9.24 billion in 2024 and is expected to rise to $13.93 billion by 2035, growing at a CAGR of 3.8 percent between 2025 to 2035.
China’s market dominance has led many countries to worry about the strength of their copper supply chains. In August, it was estimated that China’s refined copper output would rise to a record high in 2025, as the growing strength of its smelting sector is putting overseas competitors out of business in the face of a global shortage of copper ore. At present, China contributes over half of the global refined copper production.
The global copper shortage began to take hold in late 2023, owing to mine closures and the rapidly expanding smelting capacity, which drove down processing fees – the fees that smelters are paid to turn concentrate into metal, thereby reducing profitability. Smelters in China have been able to increase output faster than concentrate imports by using existing inventories and using scrap from the government’s consumer goods trade-in programmes, according to the Macquarie Group’s commodities strategist Alice Fox.
To strengthen their supply chains, several countries are investing heavily in copper mining and refining activities. In November, the Canadian firm Ivanhoe Mines commenced operations at its 500,000-tonne-per-year copper smelter at Kamoa-Kakula in the Democratic Republic of Congo, which it says is the largest and greenest copper smelter in Africa. It expects its first feed of concentrates to be ready by the end of the year.
Ivanhoe’s founder Robert Friedland stated, “The ceremony today is not just a ritual; it is the passing of a torch representing transformative change at Kamoa-Kakula… From a site where we first discovered high-grade copper in 2008, we now harness a fire blessed by tradition to power a facility that will set a new global standard for copper smelting.”
Canada is also growing its copper operations at home, with the revival of projects and the development of new mines. While output from British Columbia’s copper mines fell by almost 18 percent by 2023, compared to the peak, as deposits aged and permitting slowed, Canada’s copper output has increased by roughly 6.2 percent since 2023. However, some projects have been delayed due to rising costs.
The CEO of the Mining Association of Canada, Pierre Gratton, recently stated, “I expect copper to be making a big comeback in the next few years.” This is reflected in the growing interest in restarting or extending copper production.
Operations at Teck Resources’ Highland Valley mine are being extended beyond 2040. Newmont’s Red Chris mine is also continuing operations and could contribute to an increase in the national copper output by as much as 15 percent before 2030. Production at New Gold’s New Afton mine is expected to increase to 45,000 tonnes a year. Meanwhile, Foran Mining expects to commence operations at its McIlvenna Bay mine in Saskatchewan in 2026.
Growing copper deficits and China’s increasing dominance of the copper market are threatening to destabilise global copper supply chains in the coming years, as demand for the critical metal continues to grow on a global scale. Unless several new large-scale mines come online over the coming decade, the copper deficit will continue to grow, which could stall the deployment of new renewable energy capacity worldwide.
Courtesy: www.finance.yahoo.com