Copper is still the best pound-for-pound conductor of electricity, which makes it a critical metal for the clean energy transition. A battery electric vehicle can contain up to four times the amount of copper as an internal combustion vehicle, according to the Copper Development Association. There are almost five metric tons of the metal in a three megawatt (MW) wind turbine. Solar systems need five and a half tons per MW of power generation.
If it needs wiring, it needs copper. That includes the next generation of data centres needed to handle artificial intelligence and big data analysis.
Copper’s bright electric future has been subsumed by the gloom of manufacturing recession over the last two years. But investors are betting that’s going to change, a turn of the old industrial cycle coinciding with a green energy demand boost. Funds have stampeded into the market, super-charging a price rally that seen the London Metal Exchange price trade above $10,000 per ton for the first time since April 2022.
Will there be enough copper to meet demand? It can take a decade to permit and construct a new mine and many existing mines are struggling to maintain production. A slew of production downgrades by some of the industry’s biggest operators has unnerved the market. The unexpected closure of Cobre Panama, one of the world’s biggest and newest mines, has blown a hole in the raw materials supply chain, triggering Chinese smelter cuts. The Panamanian government ordered the mine to close at the end of 2023. The country has just elected a new leader but will that change the public’s hostility to the project? Reuters reporters Divya Rajagopal and Valentine Hilaire take a look.
Copper is the reason BHP is after Anglo American, as Reuters columnist Clyde Russell examines here. The Australian group’s ambitious $39 billion swoop has sent shock waves around the world, not least in South Africa. Breakingviews columnist George Hay takes a deep dive into how the BHP bombshell might play out in Anglo’s historic home.
Is copper glowing a little too hot? The International Copper Study Group’s latest forecasts were a bit more cautious than the new bullish consensus, particularly when it comes to China, the world’s largest user. Time will tell but it’s clear that Doctor Copper has woken from two years of slumber looking refreshed and recharged.
