Why Is Copper the Metal of the Sustainable Future?
There are several reasons why copper is being hailed as the sustainable metal of the future. First and foremost, copper is a key component in renewable energy systems. Solar panels, wind turbines, and electric vehicles, the frontiers of sustainable energy, all rely heavily on copper for their efficient operation.
Another reason copper is considered sustainable is its recyclability. Copper can be recycled over and over again without losing any of its properties, a characteristic that puts it in an enviable position in the circular economy. Today, nearly 80% of all the copper ever mined is still in use, a testament to its longevity and recyclability.
Recent Situation: The Demand-Supply Imbalance
The immediate outlook for copper is turbulent, largely due to supply chain disruptions in South America and soaring demand. The political crisis in Peru, which accounts for 10% of global copper production, has added to market instability. Adding to these concerns, analysts are forecasting a decline in copper production from Chile. The world’s leading producer, accounting for 27% of global output, reported a 7% year-over-year decline in copper production in 2022.
The energy transition underway across multiple industries has industry insiders raising the alarm about potential shortages of key minerals. And the key among them is copper. However, some market analysts are optimistic about the potential growth of the copper market through 2030.
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Growth Projections and Supply Challenges
Amid these concerns, some analysts see room for the copper market to expand. Demand for copper is likely to increase over the long term, particularly due to the growing popularity of electric vehicles (EVs) and the need for infrastructure to support them. China is expected to play a major role in this growth.
The Price of Sustainability
It is estimated that, over the next 30 years, we will need to invest more than $23 billion annually in order to satisfy the global climate objectives. As a consequence, the price of copper could increase significantly to meet demand and facilitate the launch of new copper projects. Although there are numerous projects in the pipeline, funding shortages and other obstacles may delay them down. As the world strives towards a future without carbon emissions, this could make it difficult to satisfy the growing demand for copper.
