The pace of the global energy transition could be slowed by a looming shortage of copper.
Citing chairman and chief executive officer Richard Adkerson of US copper producer Freeport-McMoRan, the world’s largest listed copper miner, as telling the Financial Times in an interview, energy portal Oilprice.com said there is going to be a very significant shortage of copper.
Structural demand growth tied to decarbonisation, combined with limited supply development, is expected to result in large supply deficits in the copper market, Adkerson noted.
He said Freeport-McMoRan “also believes substantial new mine supply development will be required to meet goals of the global energy transition, and current prices of copper are insufficient to support new mine supply development, which is expected to add to future supply deficits”.
“There will be some new projects that were started four years to five years ago, delayed by Covid-19, coming on stream in the next couple of years, which will bring some new copper to the market.
“Beyond that, the cupboard is pretty empty in terms of new supply projects of any significance,” said Adkerson.
Meanwhile, consulting firm Wood Mackenzie (WoodMac) said the world will need 9.7 million tonnes of mine supply over the next decade from projects that have yet to be sanctioned, if it is to meet zero-carbon targets.
It said that to date, a shortfall of this magnitude has never been overcome within a decade.
WoodMac said investment would need to be more than US$23 billion (RM108.87 billion) a year in new projects, which is 64% higher than the average annual spend over the last 30 years.
Source: The Edge Markets