Copper's Crucial Role in a Changing World Faces Unprecedented Challenges

Copper's increasing importance in a changing world has Saxo highlighting potential for another commodity supercycle. Population growth, urbanization, rising power consumption, energy storage, decarbonisation, defence priorities, and deglobalisation all depend on physical resources.

Robert Friedland, founder of Ivanhoe Mines, said that meeting expected demand growth is not just about higher copper prices, but also overcoming geology, declining grades, energy, water, permitting, capital intensity, infrastructure, and geopolitics constraints. He estimates that the world needs to produce another 700 million tonnes of copper in the next 18 years.

The problem with declining ore grades means that more rock must be processed to obtain the same amount of contained copper. For example, at Escondida mine in Chile, grades have declined from around 2% to 0.8%, requiring five times as much material to produce the same amount of copper.