A recent study conducted by researchers from the University of Michigan and Cornell University, and published by the International Energy Forum, has shed light on a critical challenge facing the United States as it navigates the transition to renewable energy: the insufficient availability of copper to meet the demands of renewable energy infrastructure and electric vehicles (EVs).
Recent trends in copper prices have reached a near 15-month high, a surge that analysts attribute to speculative buying and genuine supply constraints. However, amidst these soaring prices lies a concerning revelation from the aforementioned researchers. The study, which delves into 120 years of global copper mining data, exposes a looming shortfall in copper production rates. This shortfall poses a significant obstacle to meeting the copper requirements outlined in US policy guidelines for transitioning to renewable energy.
Specifically, the study highlights the mandate set forth in the Inflation Reduction Act, which calls for 100% electric vehicle production by 2035. EVs demand a substantially higher amount of copper compared to traditional internal combustion engine vehicles, in addition to the copper needed for grid upgrades. Adam Simon, a co-author of the study, underscores the stark contrast in copper requirements, stating that a standard Honda Accord requires about 40 pounds of copper, while an electric version of the same car needs almost 200 pounds. Moreover, onshore wind turbines necessitate approximately 10 tons of copper, with offshore wind turbines requiring even more.
One key factor contributing to the impending copper shortfall is the protracted permitting process for mining companies, which averages around 20 years from the discovery of a deposit to the approval of mine construction. With over 100 companies engaged in copper mining across six continents, the study’s modeling suggests that global copper production may fall short of future demand, presenting significant challenges to achieving renewable energy goals not only in the US but also worldwide.
Renewable energy technologies, such as solar photovoltaics and wind turbines, heavily rely on copper for efficient electricity transmission and distribution. Similarly, EVs require substantial amounts of copper for their motors, inverters, and wiring. The research underscores the daunting task of meeting future copper demands, especially in the context of the ongoing global energy transition.
The study projects that between 2018 and 2050, humanity will need to mine 115% more copper than has been mined throughout history up to 2018 to sustain current needs and support developing regions, excluding green energy initiatives. To meet this demand, the establishment of numerous new mines annually between 2018 and 2050 is imperative, with a focus on large-scale mines due to their significant production capacity.
The analysis suggests that between 35 and 194 large new mines will need to be established over the next three decades, equating to an annual rate of 1.1 to 6 new mines to support the green transition and meet the escalating demand for copper. The study emphasizes the importance of balancing the electrification of the global vehicle fleet with essential infrastructure needs, highlighting the critical role copper plays in enabling sustainable development.
Adam Simon stresses the necessity of adopting pragmatic approaches to the energy transition, advocating for a broader perspective that includes hybrid vehicle manufacturing as a viable alternative to fully electrifying vehicle fleets. He also underscores the indispensable role of copper in critical infrastructure projects in developing countries, such as electrification, clean water facilities, and sanitation systems.
In conclusion, the study calls for a nuanced approach that recognizes the pivotal role of copper in sustainable development and urges a shift in mindset among environmental groups and policymakers regarding mining practices. It emphasizes the need for a comprehensive strategy that addresses the complex challenges posed by the copper allocation dilemma amidst the ongoing global energy transition.
