Without attracting much attention, hidden behind the popularity of cobalt, lithium or nickel, Copper is starting to take center stage. A report of S&PGlobal states that the copper will become the new gold of the automobile industry. The reliance on electric vehicles respect to copper is much greater than that of a combustion vehicle and the electric power generation from renewable sources requires large amounts of copper. S&P Global estimates that by 2035 demand will far outstrip supply .
The strong commitment to electric mobility by automobile groups is causing the demand for certain minerals to increase progressively, as is the case of copper, which is doing so by leaps and bounds. This metal plays a very important role in the production of the electric car and its components.
The copper is found in almost everything that works with electricity. From electric vehicles, through the generation and distribution of electricity to the storage of green energy. And with the energy transition from fossil fuels to renewable energy and electricity, copper will become the new gold. The problem is that copper supplies are far from enough enough to cover the needs to reach the net zero emissions goals in 2050.
According to a report by S&P Global, electric vehicles need 2.5 times more copper that a average combustion vehicle. Solar and wind power generation need, respectively, two and five times more copper per megawatt of installed capacity than natural gas or coal-fired power plants. Due to its high electrical conductivity and low reactivity, copper is the key material used in everything related to electricity. But with the energy transition, much more copper would be needed. S&P Global estimates that by 2035 demand will far exceed supply.
The report predicts that demand for copper will almost double to 50 million metric tons by 2035. That’s “more than all the copper consumed in the world between 1900 and 2021“, says the study, which does not see a way to meet that demand by opening new mines or mass recycling existing copper. Including all the permits and approvals a new mine needs over 16 years from the discovery of the deposit until it offers its first production.
The S&P Global study considered two scenarios to forecast the size of the gap between copper supply and demand. The more conservative expects production and recycling to continue at current levels. In that case, demand will exceed supply by 20%. On the stage More optimisticproduction and recycling will accelerate above current levels, but the gap does not stop occurring because of it.
“Under any of the scenarios studied, there will not be enough copper supply to meet demand by 2050.”, concludes the report.
S&P Global has published this report at a time when the price of copper has plummeted along with that of other raw materials. As recession fears mount, analysts believe demand will slow. This week, copper reached its lowest level since November 2020, after going through, in the second quarter of 2022, its worst period in more than a decade.