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The International Energy Agency (IEA) has warned that global copper supply will fall 30% short of demand by 2035 unless urgent action is taken. Copper, vital for all electrical energy systems, faces a looming supply crunch as the clean energy transition accelerates. China currently refines over 70% of critical minerals, creating geopolitical risk. The IEA urges governments to invest in refining, recycling and substitution strategies to prevent delays and cost surges. Without intervention, battery prices could rise 40-50%. Given copper’s typical 17-year development timeline, swift government-led diversification is critical to avoiding bottlenecks and economic disruption. (The Guardian)
Why does this matter? Copper is a critical component in clean energy technologies, including electric vehicles, battery storage, solar panels and wind turbines. Alongside the booming growth in renewables, the rapid expansion of data centres and AI is also driving up need for the metal. Mining company BHP has forecast that global copper demand will increase by 72% to 52.5 million mt by 2050, up from 30.4 million mt in 2021. Data centres account for less than 1% of demand today and could rise to 6-7% by mid-century.
Rio Tinto, which currently produces around 700,000 mt of copper, aims to reach one million mt within five years. It is extending its copper operations in Mongolia and Utah. It has also recently signed a new agreement with Codelco to develop a copper “mining district” centred on their joint Neuvo Cobre project in northern Chile’s Atacama region. Rio Tinto, which is raising its spending to $11bn this year, has also won fast-track status for its Resolution Copper mining project in Arizona, owned in partnership with BHP.
Global copper production reached an estimated 23 million mt in 2024, up from 16 million mt in 2010. Chile, the longtime leader in copper production, reached an output of 5.3 million mt last year. The Democratic Republic of Congo followed with 3.3 million mt and Peru with 2.6 million mt. China, Indonesia and the US are also among the top 10. China, however, prevails in refined copper production, producing 12 million mt in 2024.
Argentina, which currently produces little copper, has the potential to land a place in the top 10, according to the country’s mining chamber. For the past two decades, investors have held back on copper mining in Argentina due to economic and political instability. However, that perception is shifting as President Javier Milei’s economic reforms take hold and leaders in mineral regions begin to ease longstanding resistance to mining.
There are six advanced projects in the country’s pipeline. The PSJ Cobre Mendocino project, co-owned by Zonda Metals and the Alberdi Group in the foothills of the Andes in the Mendoza province, could start operating in 2028 if it gains approval. The venture targets production of 40,000 tonnes of copper annually. It will cost $560m and take only two years to develop. Mining lawyer Carlos Saravia Frías said that if PSJ gets the green light, it would show investors that Argentina is open to mining. Rio Tinto’s Nuton Holdings has also signed an agreement with Aldebaran Resources to advance the latter’s Alter copper-gold project in Medoza’s neighbouring province, San Juan, which is currently at the pre-feasibility stage.
Meanwhile, the Vicuña Mineral Resource – jointly owned by Lundin Mining and BHP – which straddles the Argentina-Chile border in the Andes, has recently been found to contain an estimated 13 million mt of copper, alongside significant amounts of gold and silver. Vicuña includes the Josemaria and Filo del Sol projects, which also contain 25 million mt of inferred copper. Mining could commence by 2030, bringing substantial economic benefits to both countries while helping to meet the world's rising demand for copper.