The future availability of copper is viewed differently. Some see it as a finite resource heading for depletion ("like sperm oil"), driven by concerns over historical exponential production growth. Others believe technology could continue to lower costs, potentially making copper less scarce over time. The concept of "peak copper" , a maximum production year followed by decline and price spikes stems largely from extrapolating this past exponential growth and making estimates of ultimately recoverable resources, often based only on known deposits.
There are significant amounts of copper identified in known deposits that have yet to be mined, with estimates suggesting that around 2,100 million metric tons remain in these discovered deposits after accounting for past production. However, the potential for undiscovered copper resources is even more vast. Geological assessments, particularly by the US Geological Survey (USGS), estimate a mean of approximately 3,500 million metric tons of copper in undiscovered porphyry and sediment-hosted deposits alone, which make up over 80% of known resources. If we extrapolate to include other types of deposits, the total estimate for undiscovered copper could reach as high as 4,350 million tons. When considering both discovered and undiscovered resources globally, estimates suggest that total copper resources might range between 5,600 and 6,300 million metric tons. Historically, only about 12% of these estimated global resources have been mined to date.
It's also important to note that the majority of known copper is concentrated in a small fraction of deposits, with over 90% found in the largest 20%. This concentration primarily occurs in porphyry and sediment-hosted types, which means that the future of large-scale copper supply relies heavily on the discovery and development of these large, albeit rare, deposits.
Another challenge facing the industry is the long-term trend of declining average ore grades in mines. This decline means that more rock must be processed to extract the same amount of copper, leading to increased energy requirements and higher production costs. Projections indicate that average grades could fall significantly by 2050. Additionally, there are potential sources of copper in deep-sea nodules and submarine massive sulfides. However, these resources are not usually included in standard estimates and face technological and environmental obstacles that complicate their extraction.
The future demand for copper is poised to surge significantly, driven by a number of key factors. One of the primary catalysts is electrification, which involves both the expansion and upgrading of electricity grids to meet growing energy needs. Additionally, the renewable energy sector is contributing to this increase in demand, particularly through the installation of solar panels and the construction of wind turbines, especially in offshore projects, which are known to be highly copper-intensive.
Another major driver is the rise of electric vehicles (EVs), which utilize a considerably greater amount of copper compared to traditional internal combustion engine vehicles. This shift towards electric mobility is expected to have a substantial impact on copper consumption. Furthermore, the need for energy storage solutions, such as grid-scale batteries, is adding to the demand, as efficient energy storage is critical for balancing supply and demand in an increasingly renewable-based energy system.
Lastly, the growth of digital infrastructure, including data centers, 5G networks, and advancements in artificial intelligence, is also a significant factor fueling copper demand. Together, these elements suggest a robust increase in copper consumption over the coming decades, with projections indicating that overall demand could nearly double by 2035, particularly driven by the needs of clean energy technologies, which could see an increase of over 80% in that same timeframe.
Geological depletion of copper resources is not expected to happen imminently, as current estimates suggest a vast supply. However, the projected surge in demand presents significant challenges in meeting that demand through production. Many analysts forewarn that copper supply deficits may begin to emerge as soon as late 2024 or 2025, potentially persisting throughout the decade. The anticipated gap between demand, particularly driven by energy transition needs and forecasted supply, could escalate to millions of tons per year by the early 2030s.
Several critical constraints contribute to this situation. These include declining ore grades, the long timelines typically required to discover, permit, finance, and construct new mines often exceeding a decade of geopolitical instability in key producing regions, water scarcity, and stringent environmental regulations.
Moreover, some models predict that primary copper production, derived from newly mined sources, could peak around 2038, with estimates varying between 2030 and 2045. After this peak, extraction rates may decline due to both resource depletion and underlying economic factors. To address these impending challenges and meet future demand, a substantial investment, estimated to be in the trillions of dollars over the next couple of decades, will be necessary for exploration and mine development.
Recycling potential for copper is significant, as it can be recycled without any loss of quality. Currently, recycled copper sourced from both manufacturing scrap and end-of-life products accounts for around 35% of the global demand, and this percentage is likely higher in regions such as the EU and the US. As we look to the future, reliance on recycling, often referred to as "urban mining," will become increasingly critical. With anticipated constraints on primary production, it may need to provide a much larger share of copper supply, with some experts suggesting that over 85% of demand could be met through recycling later in the century.
Technological advancements will play a vital role in this shift. Improvements in exploration techniques will be necessary to uncover undiscovered copper deposits, particularly those hidden beneath other materials. Additionally, there is a growing need to enhance the efficiency of mining and processing operations to extract copper from lower-grade ores. Efforts must also be made to reduce the energy and water intensity associated with copper production. Furthermore, advancements in the collection, sorting, and recovery rates of copper from end-of-life products are essential. Despite these developments, it's important to note that finding alternative materials may be challenging, as copper’s unique properties make it difficult to substitute in many key applications.
Concerns regarding imminent copper scarcity or a rapid decline in copper availability, often referred to as "peak copper," appear to be overstated based on the information provided. One major factor contributing to this misconception is the misunderstanding of past growth, where the expansion of the copper industry is frequently attributed solely to the passage of time, without considering the significant roles played by population increases and economic development.
Additionally, there is a tendency to underestimate the existing resources of copper. Many previous studies have suffered from inaccuracies, such as double counting and failing to properly account for past production. More importantly, these studies have overlooked the vast potential of undiscovered copper resources that are yet to be identified. Moreover, projections concerning future demand for copper have often overestimated the needs. This is primarily due to not considering trends like slowing population growth and the saturation effect in per capita consumption.
Considering all these factors, the total estimated copper resource, which combines known remaining resources with undiscovered potentials, amounts to approximately 6,380 million tons when summing the estimates of 2,030 million tons and 4,350 million tons, not to mention the additional potential from marine and other sources. This figure is substantially larger than what is often acknowledged. Coupled with the prospect of slowing long-term demand growth, this information extends the timeline significantly before approaching any critical issues related to resource exhaustion.
Furthermore, the longevity of the giant deposits that dominate the supply landscape suggests that any decline following a peak would likely be gradual rather than abrupt. Therefore, the emphasis should shift away from the fear of depletion and focus more on practical challenges. This includes improving recovery rates in both mining and recycling, developing better exploration technologies particularly for deposits hidden under cover reducing the costs and environmental impacts associated with mining operations, especially for large deposits and potential underground sites, and facilitating more efficient recycling systems.