The renewable energy push continues. Despite the setbacks the invasion of Ukraine has presented, the world’s major powers are not reassessing their ultimate goal of a completely renewable future at some point. While this might sound fanciful to some, one thing that is rarely discussed is what mineral resources are required to advance this push.
Cobalt, antimony, nickel, silver, lithium, and tungsten are just a handful of minerals used in renewable energy projects. The wind powers the windmill, but the windmill and its components are made up of mined minerals. While the previously mentioned minerals are critical, there is one that trumps them all – copper. Copper is flexible, conducts electricity, and is also recyclable. It is one of the principal materials used in renewable energy systems to produce power from wind, thermal, hydro, and solar energy.
The Net Zero Coalition is a group of 70-plus countries pledging to arrive at net-zero emissions by 2050. Most of the world’s developed countries are part of this coalition, and while this is somewhat of a moving target, a significant uptick in copper production will be needed to get there. Clean energy transition is highly dependent on copper – much more so than cobalt, antimony, nickel, silver, lithium, and tungsten. According to the S&P Global 2022 special report, “The Future of Copper,” at our current pace global copper demand will double by 2035. In metric tons, that’s going from 25 million metric tons (MMt) to 50 MMt in 13 years. Most industry experts find this unworkable.
Copper is theorized to exist in abundance, but there have already been cries of “Peak Copper.” In some instances, copper can be substituted by similar conducting metals but those instances are few and far between. For example, aluminum is often substituted for copper when copper’s price surpasses aluminum by 3.5 to 4 times. Yet, for things like undersea cabling and wiring or use in electric vehicles, few substitutes are as efficient as copper.
Some have posited opening copper mines at a faster rate. To meet the projected demand by 2035, 3 new Tier 1 mines would need to be opened yearly (producing 300,000 metric tons per year) for the next 29 years. If this sounds daunting, it is. Industry experts don’t think it is possible. The International Energy Agency (IEA) revealed in a 2021 study that it takes approximately 16 years to fully develop a mine (from resource discovery to the initial production). This is clearly outside the desired calendar range.
The good news is copper producers are in hot demand. The bad news is the price of an electric vehicle (EV) will likely continue to climb due to production limitations.
