Sulphuric Acid Shortage Threatens Copper Supply Chain

The rapid growth of artificial intelligence and data centers is putting pressure on copper supply chains. According to Gartner, global data-center power demand is expected to rise by roughly a quarter this year alone, from about 104 gigawatts to 132, on its way to roughly 290 gigawatts by 2030.

The additional copper demand from AI and data centers specifically is estimated at around a million tonnes by decade's end, not the largest driver of copper demand but the fastest-accelerating one. Copper itself is not the constraint, with Adam Simon, professor of earth and environmental sciences at the University of Michigan, estimating that there are 6,598 million tonnes of mineable copper resource available.

However, getting a new mine permitted, financed, and producing takes on the order of 18 years. China has built roughly half the world's copper smelting capacity over the past two decades, exceeding what the world's mines can feed it, causing treatment charges to collapse toward zero in some places.

The real chokepoint is sulphuric acid, which is used to turn low-grade oxide ore into copper cathode. China is the largest exporter of sulphuric acid and has recently cut its export quota to 700,000 tonnes, down from 1.3 million over the same period a year earlier.