The Copper Bill For Global Green Demand Is Expected To Reach Us $97 Billion By 2030

The International Energy Agency (IEA) recently predicted that global copper demand, including the Paris targets, would reach 25.1m tonnes a year by 2030. Currently, the annual supply of copper mines in operation or under construction is only 19.6m tonnes by 2030. It is understood that copper demand for green uses will play an important role.

As global decarbonisation accelerates, so will production of pure electric vehicles (EVs) and photovoltaic installations, which depend on copper. Goldman Sachs estimates that global copper demand for green uses such as electric vehicles and renewable energy will expand 3.8 times in 2030 compared to 2021. Meanwhile, three-month copper futures on the London Metal Exchange hit a peak of $10,845 a tonne in March 2022. According to statistics, the price of copper futures for long-term contracts is rising, and the 10-year copper price, for example, has reached around $9,000 / ton, which means that the same high level as the recent contract will continue until 2032.

Yoichi Sato, director of sumitomo Metal Mine s resource business division, said, All of the deposits with good conditions for easy transportation and high copper content have been developed. More mines are being developed in difficult areas such as remote areas with poor infrastructure and 4,000-meter-high highlands in the Andes mountains of South America.

Of course, development costs will skyrocket. The cost of mining development in Chile, a major producer of copper, was at most two billion dollars between 1990 and 2000, but is expected to increase to seven billion dollars between 2014 and 2023, said Seohae Min-min at the Japan Oil, Gas, Metals and Mineral Resources Organization.

In this regard, the relevant analysis believes that if the current high copper price continues to 2030, the cost of global green demand for copper will reach 97 billion DOLLARS by simple calculation. The cost would increase by about $60 billion compared to 2020. At present, Europe takes the geopolitical situation between Russia and Ukraine as an opportunity to call for speeding up the transition away from fossil fuels, and decarbonization demand may expand ahead of time. However, it is difficult to increase copper supply flexibly, and there is a risk that the impact of a worsening copper shortage and higher prices for renewable energy products will spread.