Copper crisis threatens the renewable energy transition

[JACK ALYMER]

WAKKO MIGHT BE CRAZY BUT HE WASN’T WRONG ABOUT THE VALUE OF A COPPER HA’PENNY,

BEFORE THE 1860S HA’PENNYS WERE MADE ENTIRELY OF COPPER – BUT THESE DAYS IT’S MORE LIKE 2-PERCENT.

THAT’S BECAUSE OVER TIME – THE PRICE OF COPPER – OUTPACED THE VALUE OF ONE U-S CENT.

IT’S ALSO WHY YOU MAY HEAR HEADLINES LIKE THESE MORE OFTEN 

COPPER HAS HAD ITS HIGHS AND LOWS.

AND RIGHT NOW – ITS POISED TO BE ONE OF THE GREAT CATALYSTS OF A CLEAN ENERGY REVOLUTION – IF WE CAN GET OUR HANDS ON ENOUGH OF IT.

THAT’S BECAUSE THE WORLD. IS GOING TO NEED. A LOT.

WE’RE TALKING ABOUT PRODUCING WIND TURBINES, SOLAR PANELS, AND ELECTRIC VEHICLES.

[Morning Report with Ernest Scheyder]

“Globally, the amount of copper we’re going to need to produce in the next 25 years, will be as much as the entire world has produced in history”

[JACK ALYMER]

EXPERTS PREDICT THIS WILL CAUSE THE METAL’S PRICE TO SKYROCKET UP 75 PERCENT OVER THE NEXT TWO YEARS.

LAST YEAR, THE COST OF COPPER BROKE RECORDS BY REACHING CLOSE TO 11,000 DOLLARS PER TON.

THIS LATEST JUMP IN VALUE WILL LIKELY PUSH THE PRICE UP TO 15,000 DOLLARS PER TON.

COPPER IS INTEGRAL FOR THE MANUFACTURING A VARIETY OF CLEAN ENERGY TECH

IN THE CASE OF EVS, 176 POUNDS OF COPPER is NEEDED TO MAKE JUST ONE

ACCORDING TO GOLDMAN SACHS, e-vs ALONE ACCOUNTED FOR TWO THIRDS OF THE JUMP IN THE GLOBAL NEED FOR COPPER DURING 20-22.

[Hardika Singh – WSJ]

“So copper is actually used in great quantity for these electric vehicles and other renewable energies, much more so than what you would use in a traditional fossil fuel power plant or traditional cars.”

[JACK ALYMER]

AND THERE’S NO WAY AROUND IT EITHER, WE’RE GOING TO NEED COPPER TO GET MORE EVS ON THE ROAD AND OTHER GREEN ENERGY TECH RUNNING.

THE AMERICAN SOLAR ENERGY SOCIETY HAS SAID THERE IS NO VIABLE ALTERNATIVE TO COPPER IN MEETING THE REQUIREMENTS OF THE ENERGY TRANSITION.BUT, AS DEMAND FOR COPPER GROWS, THERE’S ALSO BEEN A RECENT DECREASE IN ITS PRODUCTION.

IN CHINA, THE WORLD LEADER IN REFINED COPPER OUTPUT, THE INDUSTRY IS FACING A CRISIS.

A SHORTAGE OF COPPER ORE IS FORCING SMELTERS IN THE COUNTRY TO CUT OFF IN PRODUCTION. NOW INDUSTRY EXECUTIVES ARE SCRAMBLING TO FIX the problem but it may take time.

SEE, SMELTERS MAKE MONEY BY TAKING IMPORTED COPPER ORE FROM MINERS, PROCESSING IT INTO A USABLE MATERIAL.

HIGHER PROCESSING FEES MEAN A HIGHER ORE SUPPLY.

BUT, MINE CLOSURES IN LATIN AMERICA, WHICH ACCOUNTS FOR 40 PERCENT OF GLOBAL COPPER PRODUCTION, HAVE EXACERBATED THE DWINDLING SUPPLY OF ORE.

IN THE U.S., COPPER OUTPUT HAS BEEN SLOWED BY AN ONGOING DEBATE OVER AMERICAN MINING LAWS.

THE BIDEN ADMINISTRATION WANTS TO REFORM THE LEGISLATION, SOME OF WHICH WAS FIRST PASSED ALL THE WAY BACK IN THE 19TH CENTURY.

THIS PERIOD OF CHANGE HAS LEFT MINING EXECUTIVES FRUSTRATED AND CONFUSED OVER WHY MANY OF THEIR PROPOSED MINING PERMITS ARE BEING DENIED.

SOME, LIKE THE CEO OF COPPER GIANT FREEPORT-MCMORAN, SAY THEY DON’T NECESSARILY WANT AN EASING OF ENVIRONMENTAL STANDARDS, JUST MORE CLARITY ON THE PERMITTING PROCESS.

[Richard Adkerson]

“Developing new copper mines are really challenging wherever you are for a variety of reasons. And so that is delaying the decisions to make major new investments in mines for companies like ours, and others in the industry is delaying that. And that is simply boasting, what I’m very confident is going to be a coming shortage in copper.”

[JACK ALYMER]

IN THE STATES, THERE’S ALSO THE ADDED PROBLEM OF MANY COPPER RESERVES BEING LOCATED ON OR AROUND NATIVE AMERICAN RESERVATIONS.

ALMOST 90 PERCENT OF THESE RESERVES ARE WITHIN 35 MILES OF TRIBAL LANDS.

[Wendsler Nosie Sr.]

“We have our lawsuits in and everything. This is a holy place. It’s gonna be murder to be killed. It’s not over yet. We’re still praying for those miracles that America would just stand up and do the right thing.”

[JACK ALYMER]

ULTIMATELY, THE COPPER CRISIS BOILS DOWN TO THIS:

ITS ESSENTIAL FOR THE CLEAN ENERGY TRANSITION, NOTHING WE’VE FOUND found SO FAR CAN REPLACE IT, AND THERE’S NOT ENOUGH OF THE METAL TO GO AROUND.

THIS NOT ONLY THREATENS TO HAMPER THE CONVERSION TO CLEANER TECH, BUT COULD ALSO PREVENT THE WORLD FROM HITTING ITS 20-50 EMISSIONS GOALS.

[Richard Adkerson]

“With this movement towards carbon reduction investments, every one of those investments requires more copper.”

[JACK ALYMER]

WHILE MINING INITIATIVES HAVE BEEN SEEN AS A MAJOR CONTRIBUTOR TO CLIMATE CHANGE, THEY’RE ALSO ESSENTIAL TO PROCURING MUCH NEEDED COPPER.
And currently are only responsible for about point-3 percent of global emissions.

THOUGH THAT NUMBER IS EXPECTED TO GROW AS COPPER DEMAND CONTINUES TO CLIMB.