The world’s largest copper producer, Chile’s state-owned mining company Codelco, issued a warning on Thursday. Predicting that eight million metric tons of the metal may be in short supply by 2032 as rising demand outpaces the number of new projects.
A short-term surplus is anticipated due to new projects in Chile, Peru. The Democratic Republic of the Congo, and China’s Tibet region. But in the medium to long term, demand will outpace supply. According to Maximo Pacheco, chairman of the board of Codelco.
At the Asia Copper Week conference in Singapore, Pacheco stated. “Considering that some copper deposits are currently in the process of ceasing production. While other projects are in the process of beginning operations. It is predicte that the deficit will be over eight million metric tonnes in 10 years.”
The predictions of various analysts, including Pacheco, forecast a supply shortfall of six million tonnes annually over the following ten years. They blame the impending deficit on the expansion of the clean energy & electric vehicle (EV) industries.
According to Pacheco’s estimates base on Codelco studies, the demand for the orange metal will increase from 25 million metric tonnes to slightly over 31 million metric tonnes in 2032 as a result of the global energy transition to combat climate change.
This implies that during the next eight years, the world would need to construct eight projects the size of BHP’s Escondida in Chile, the largest copper mine in the world
Given the larger scale improvements need and the fact that around half of the projects in the pipeline are greenfield, such a “massive” undertaking appears “possible” rather than “likely” said Erik Heimlich, CRU’s head of base metals supply.
“Historically, these projects have had low completion rates. There are concerns about the ability to address the supply deficit in an effective and timely manner. Because a significant portion of the greenfield projects. That may be implemented in 2012 are still in the early stages of development. He said earlier this year during a copper conference in Chile.
Copper Industry Need to “Invest $100 billion”
According to experts, the copper sector will need to invest more than $100 billion in new mines to close a potential 4.7 million tonnes yearly supply gap by 2030.
The imbalance between demand and supply will become apparent in the second part of this decade, or in 2026, Pacheco predicted. If new mining projects do not go into operation.
In the past three years, a few significant copper mines have started operating. The Cobre Panama project by First Quatum began commercial output in September 2019.
The asset can generate with over 300,000 tonnes of copper annually and is believed to have proved and probable reserves of 3.1 billion tonnes.
At the Kamoa-Kakula project with in DRC, Ivanhoe Mines started producing copper concentrate in May of last year. Commercial production is expected to start in July 2021.
In Peru’s Moquegua region, Quellaveco, Anglo American began mining its first ore in October 2021. It declared commercial production about a year later, in September of this year.
From 120,000 – 160,000 metric tons of copper are anticipated to be produced by the facility in 2022. With the first ten years of full production averaging 300,000 tonnes per year.
The largest new copper mine in Peru since MMG’s Las Bambas in 2016 would be Quellaveco.