SFR 0.19% $10.77 sandfire resources limited

Ann: Sandfire June 2020 Quarterly Report, page-41

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    Illustration of a salmon jumping out of a copper bowl.

    Illustration: Aïda Amer/Axios

    The world's transition to renewable energy and electric vehicles will require unprecedented amounts of copper from potentially new mining operations that may harm vulnerable species and ecosystems.

    Why it matters: The global need for copper could increase by an estimated 350% by 2050, with current reserves depleting sometime between 2035 and 2045, as wind and solar energy generate an increasing percentage of electricity and more people adopt electric vehicles.

    Driving the news: Copper jumped this week to two-year highs above $6,800 a ton after high demand from China plunged inventories to their lowest levels in more than a decade, which traders say may trigger a further surge in prices, Yahoo News reports.

    By the numbers: Worldwide copper usage jumped 38% over the last decade, from 17.8 million metric tonnes in 2009 to 24.5 million in 2019, largely driven by demand for renewable energy and cleaner vehicles.

    • Wind energy requires on average 2,000 tons of copper per gigawatt, while solar needs about 5,000 tons per gigawatt — several times higher than fossil fuels and nuclear energy, says Seaver Wang, a climate and energy analyst for the Breakthrough Institute, a California-based environmental research center.
    • Electric vehicles can contain between 40 kg and 83 kg of copper, while an internal combustion engine needs an average of 23 kg, according to research commissioned by the International Copper Association.

    Of note: The proposed Pebble Mine in Alaska, which sits atop one of the world’s largest copper deposits, may be used by the clean energy sector, but the possible environmental costs could be severe.

    • Developing the mine would involve "excavation of the largest open pit ever constructed in North America," and could threaten one of the most important salmon fisheries in the world, the Environmental Protection Agency concluded in 2014. Final approval has now been delayed by the Trump administration.
    • "While we can't say for certain where Pebble copper will end up, U.S. and global demand for clean and renewable power, electrical vehicles and the grid infrastructure that supports these ... will clearly be important drivers for the development of new copper producers," said Mike Heatwole, vice president of public affairs for the Pebble Ltd. Partnership, which oversees the proposed mine.

    The big picture: Copper is just one of several metals and minerals that are required for renewable power technologies and electric cars, and all have larger ecological and environmental considerations, Axios' Ben Geman reported this week. Other materials include lithium, cobalt and molybdenum.

    • Wang argues the benefits of renewable forms of energy outweigh the costs of obtaining the materials to produce them, as long as the best mining practices are followed and recycling rates are improved.
    • "Habitat loss is one of the most important threats to biodiversity worldwide, and anything that increases the rates of habitat loss will also have a negative impact on biodiversity," Laura Sonter of the University of Queensland in Australia said.
    • What's needed right now, Sonter says, is more data to identify and avoid sourcing from areas that support a lot of biodiversity.

    What to watch: "It's important to note that a lot of people who are involved in the clean energy sector are working very hard to reduce copper demand in those technologies," Wang said.

    • Enhanced recycling methods or new composites to supplement or replace copper might also help meet future demand.
    • About 4 million metric tonnes of copper were recycled in 2019 — roughly a 42% increase from the amount reused in 2009, but only around 6% of what was used, according to the International Copper Study Group.


 
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