For those that are interested, within the AFR article linked in the above Tweet, was the following quote:
"A new report doing the rounds of the global mining sector, which was compiled by S&P Global and funded by Rio, BHP, Glencore and a host of other global miners, paints a dramatic picture of the explosion in demand that will occur over the next 13 years, and the shortfalls that will emerge in just two years and extend for decades."
If you have not already read it the S&P Global report (published during July 2022) called The Future of Copper: Will the Looming Supply Gap Short-circuit the Energy Transition? is available at (you will need to fill out your information - name and email address):
Copper is essential to all energy transition plans. But the potential supply-demand gap is expected to be very large as thetransition proceeds. Substitution and recycling will not be enough to meet the demands of electric vehicles (EVs), power infrastructure, and renewable generation. Unless massive new supply comes online in a timely way, the goal of Net-Zero Emissions by 2050 will be short-circuited and remain out of reach.
Copper demand is projected to grow from 25 million metric tons (Mt) today to about 50 Mt by 2035, a record-high level that will be sustained and continue to grow to 53 Mt by 2050. Power and automotive applications will have to be deployed at scale by 2035 in order to meet the 2050 net-zero targets.
The chronic gap between worldwide copper supply and demand projected to begin in the middle of this decade will have serious consequences across the global economy and will affect the timing of Net-Zero Emissions by 2050.
The shortfall will reach as high as 9.9 Mt in 2035 in the Rocky Road Scenario, which is based on a continuation of current trends in capacity utilization of mines and recycling of recovered copper. This would mean a 20% shortfall from the supply level required for the Net-Zero Emissions by 2050 target.
The gap arises even under assumptions of aggressive capacity utilization rates and all-time-high recycling rates in theHigh Ambition Scenario. Even with these aggressive assumptions, refined copper demand will outpace supply in theforecast period up to 2035.
In the 21st century, copper scarcity may emerge as a key destabilizing threat to international security. Projected annual shortfalls will place unprecedented strain on supply chains. The challenges this poses are reminiscent of the 20th-century scramble for oil but may be accentuated by an even higher geographic concentration for copper resources and thedownstream industry to refine it into products.
In the United States, the nexus between a politicized regulatory process and the ubiquity
of litigation makes it unlikely that efforts to expand copper output in the United States would yield significant increases in domestic supply within the decade. The prospects for any expansions are higher on state and private lands.
Under the Rocky Road Scenario, the United States will have to import 67%—that is two- thirds—of its refined copperdemand by 2035. Even in the High Ambition Scenario, the United States will still need to import 57% of the refined copperduring the years of highest energy transition–related copper demand.
The complexity of permitting mines in the United States is reinforced by the long lead times also required elsewhere around the world. Multidimensional challenges make the development of mines a generational endeavour, spanning decades and requiring hundreds of billions of dollars. Projects under development today would likely not be sufficient to offset the projected shortfalls in copper supply, even if their permitting and construction were accelerated.
Cheers
These are only my thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.
(20min delay)