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Released June 03, 2024 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The world can't mine its way out of global climate change. At least it can't when it comes to copper.
That's what two American academics assert in a paper published last month by the International Energy Forum (IEF) (Riyadh, Saudi Arabia).
The co-authors are Adam Simon, the Arthur F. Thurnau Professor of Earth & Environmental Sciences at the University of Michigan, and Lawrence Cathles, a retired professor who taught for decades at Cornell University.
The world's demand for copper is expected to surge in the coming decades, driven by significant investments that are expected to be made in the developing world's electric transmission and distribution (T&D) networks as well as the two-track surge in the advanced economies for T&D network renewal/expansion and electric vehicles (EVs).
Copper is essential for the generation, transmission and storage of electricity, making it a prized mineral as the world transitions to a lower-carbon economy. Simon and Cathles wrote that "copper availability and demand determine the rate of electrification, which is the foundation of current climate policy." Supply and demand fundamentals also drive copper prices, which currently stand at historic highs of more than $5 per pound. In 2009, by contrast, the mineral sold for about $2.25 per pound.
"Many studies have raised concerns that copper supply cannot meet the copper demands of both the green energy transition and equitable global development," they continued, "but the seemingly universal presumption persists that the copper needed for the green transition will somehow be available."
For more on the global supply and demand trends for copper, see May 23, 2024, article - Consumers Not Yet Benefiting from Declining Input Costs for Clean Energy Technologies and May 17, 2024, article - IEA: Price of Most Critical Minerals Fell in 2023, but Concerns Arise.
Industrial Info is tracking 554 planned copper mining capital projects around the world with a "high" or "medium" probability of beginning construction according to their respective time schedules. The value of these projects is about $153.4 billion.
The countries with the largest dollar value of copper mines under development are Chile, Peru, the U.S. and Russia.
Click on the image at right to see the 10 countries with the largest dollar-value of copper mining projects under development.
In their IEF paper, Simon and Cathles calculated worldwide historic copper mining production since 1900 and projected global copper supply and demand from 2018 to 2050.
Just to meet the world's "business as usual" (BAU) demand for copper over the next 30 years, they said the world will need to mine about 115% more copper than has been mined in the prior 120 years, they said. The BAU case is mainly to build or expand electric T&D networks around the world.
The BAU case doesn't consider the additional demand created by the green energy transition, specifically for electrified transportation. To meet the copper needs of electrifying the global vehicle fleet, the world will need an additional 55% more new mines than are currently being developed, the authors project. To meet this green energy transition demand, as many as six new large copper mines will need to opened around the world each year over the next several decades.
In the U.S., the Inflation Reduction Act of 2022 requires that EVs account for 100% of domestically manufactured vehicles by 2035. Depending on the model, EVs require three to five times as much copper as vehicles powered by an internal combustion engine (ICE).
An ICE Honda Accord needs about 40 pounds of copper, but the same battery electric Honda Accord uses almost 200 pounds of copper, Simon said in a May 15 University of Michigan press release. Onshore wind turbines require about 10 tons of copper, and in offshore wind turbines, that amount can more than double, he added.
The study examined 120 years of global data from copper mining companies and calculated how much copper the U.S. alone would need to build new T&D lines and electrify vehicles. It found that demand for copper in the U.S. alone would outstrip what the world's copper mines can produce at the current rate of production.
The shortfall is partly because of the demands of the U.S. Inflation Reduction Act (IRA) and the extended time it takes to permit a new mine. The average time between discovering a new copper mineral deposit and getting a permit to build a mine is over 20 years, Simon said.
The authors wrote that the IRA means "it is highly unlikely that there will be sufficient additional new mines to achieve 100% EV by 2035. Policymakers might consider changing the vehicle electrification goal from 100% EV to 100% hybrid (vehicle) manufacture by 2035. This would allow for future output of existing and new copper mines to be used for the developing world to catch up with the developed world in electrification."
The authors say there is plenty of copper resource available, but "the concern is that we may not be able to mine the copper resource fast enough to support baseline global development and vehicle electrification. The strongest evidence for this concern is the lack of sufficient copper resources in the discovery pipeline."
New copper mines that started operation between 2019 and 2022 took an average of 23 years from the time of a resource discovery for mines to be permitted, built and put into operation, they write. Given the lengthy process to develop new mines, they conclude that there are insufficient mines in the development process to meet future needs.
Rather than abandon hope, Simon and Cathles suggest the U.S. could shift its policy goals from 100% of domestically made vehicles be battery electric by 2035 and adopt a different standard: hybrid electric vehicles.
There is "remarkably little difference" between the amount of copper needed to manufacture hybrid electric compared to ICE vehicles, they wrote. Hybrid electric vehicles require about 64 pounds of copper compared to about 53 pounds of copper for an ICE vehicle.
"It would therefore be judicious to aim for a transition to the 100% manufacture of hybrid electric vehicles by 2035, rather than transitioning to the 100% manufacture of battery electric vehicles.
Simon and Cathles said that hybrid electric vehicles "could have almost as large an impact on reducing CO2 emissions and city pollution, and the likelihood of the copper required for their manufacture being available is much greater. Life cycle emissions for battery electric vehicles are comparable with hybrid electric vehicles, with some variations depending on the model of vehicle.
"This is not a perfect solution, but it is a much more resource realistic one," they said. "It is evident that attention needs to be paid to managing the copper demands of electrification and the transition to renewable energy sources."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
That's what two American academics assert in a paper published last month by the International Energy Forum (IEF) (Riyadh, Saudi Arabia).
The co-authors are Adam Simon, the Arthur F. Thurnau Professor of Earth & Environmental Sciences at the University of Michigan, and Lawrence Cathles, a retired professor who taught for decades at Cornell University.
The world's demand for copper is expected to surge in the coming decades, driven by significant investments that are expected to be made in the developing world's electric transmission and distribution (T&D) networks as well as the two-track surge in the advanced economies for T&D network renewal/expansion and electric vehicles (EVs).
Copper is essential for the generation, transmission and storage of electricity, making it a prized mineral as the world transitions to a lower-carbon economy. Simon and Cathles wrote that "copper availability and demand determine the rate of electrification, which is the foundation of current climate policy." Supply and demand fundamentals also drive copper prices, which currently stand at historic highs of more than $5 per pound. In 2009, by contrast, the mineral sold for about $2.25 per pound.
"Many studies have raised concerns that copper supply cannot meet the copper demands of both the green energy transition and equitable global development," they continued, "but the seemingly universal presumption persists that the copper needed for the green transition will somehow be available."
For more on the global supply and demand trends for copper, see May 23, 2024, article - Consumers Not Yet Benefiting from Declining Input Costs for Clean Energy Technologies and May 17, 2024, article - IEA: Price of Most Critical Minerals Fell in 2023, but Concerns Arise.
Industrial Info is tracking 554 planned copper mining capital projects around the world with a "high" or "medium" probability of beginning construction according to their respective time schedules. The value of these projects is about $153.4 billion.
The countries with the largest dollar value of copper mines under development are Chile, Peru, the U.S. and Russia.
In their IEF paper, Simon and Cathles calculated worldwide historic copper mining production since 1900 and projected global copper supply and demand from 2018 to 2050.
Just to meet the world's "business as usual" (BAU) demand for copper over the next 30 years, they said the world will need to mine about 115% more copper than has been mined in the prior 120 years, they said. The BAU case is mainly to build or expand electric T&D networks around the world.
The BAU case doesn't consider the additional demand created by the green energy transition, specifically for electrified transportation. To meet the copper needs of electrifying the global vehicle fleet, the world will need an additional 55% more new mines than are currently being developed, the authors project. To meet this green energy transition demand, as many as six new large copper mines will need to opened around the world each year over the next several decades.
In the U.S., the Inflation Reduction Act of 2022 requires that EVs account for 100% of domestically manufactured vehicles by 2035. Depending on the model, EVs require three to five times as much copper as vehicles powered by an internal combustion engine (ICE).
An ICE Honda Accord needs about 40 pounds of copper, but the same battery electric Honda Accord uses almost 200 pounds of copper, Simon said in a May 15 University of Michigan press release. Onshore wind turbines require about 10 tons of copper, and in offshore wind turbines, that amount can more than double, he added.
The study examined 120 years of global data from copper mining companies and calculated how much copper the U.S. alone would need to build new T&D lines and electrify vehicles. It found that demand for copper in the U.S. alone would outstrip what the world's copper mines can produce at the current rate of production.
The shortfall is partly because of the demands of the U.S. Inflation Reduction Act (IRA) and the extended time it takes to permit a new mine. The average time between discovering a new copper mineral deposit and getting a permit to build a mine is over 20 years, Simon said.
The authors wrote that the IRA means "it is highly unlikely that there will be sufficient additional new mines to achieve 100% EV by 2035. Policymakers might consider changing the vehicle electrification goal from 100% EV to 100% hybrid (vehicle) manufacture by 2035. This would allow for future output of existing and new copper mines to be used for the developing world to catch up with the developed world in electrification."
The authors say there is plenty of copper resource available, but "the concern is that we may not be able to mine the copper resource fast enough to support baseline global development and vehicle electrification. The strongest evidence for this concern is the lack of sufficient copper resources in the discovery pipeline."
New copper mines that started operation between 2019 and 2022 took an average of 23 years from the time of a resource discovery for mines to be permitted, built and put into operation, they write. Given the lengthy process to develop new mines, they conclude that there are insufficient mines in the development process to meet future needs.
Rather than abandon hope, Simon and Cathles suggest the U.S. could shift its policy goals from 100% of domestically made vehicles be battery electric by 2035 and adopt a different standard: hybrid electric vehicles.
There is "remarkably little difference" between the amount of copper needed to manufacture hybrid electric compared to ICE vehicles, they wrote. Hybrid electric vehicles require about 64 pounds of copper compared to about 53 pounds of copper for an ICE vehicle.
"It would therefore be judicious to aim for a transition to the 100% manufacture of hybrid electric vehicles by 2035, rather than transitioning to the 100% manufacture of battery electric vehicles.
Simon and Cathles said that hybrid electric vehicles "could have almost as large an impact on reducing CO2 emissions and city pollution, and the likelihood of the copper required for their manufacture being available is much greater. Life cycle emissions for battery electric vehicles are comparable with hybrid electric vehicles, with some variations depending on the model of vehicle.
"This is not a perfect solution, but it is a much more resource realistic one," they said. "It is evident that attention needs to be paid to managing the copper demands of electrification and the transition to renewable energy sources."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
