- [Narrator] You might not think
copper is worth more than a penny,
but in today's global economy, it's actually worth a lot.
For electric vehicles, windmill farms,
even the power grid itself copper is essential
and in short supply.
- At the start of the next decade,
we're going to have a shortfall
of over 5 million metric tons.
- [Narrator] Here's why the metal has become so important,
and how a severe shortage
is threatening the global push toward electrification.
- Electrification essentially means moving away
from relying so much on fossil fuels for our energy needs.
- [Narrator] Copper is critical to electrification
because it has the highest conductivity
of any non-precious metal.
That's important when trying to make an electric car,
or windmill efficient so electricity isn't lost in transit.
- So copper is actually used in a great quantity
for these electric vehicles,
and other renewable energies much more so
than what you would use
in a traditional fossil fuel power plant
or traditional cars.
- [Narrator] EVs require an estimated four times
as much copper as gas fueled cars.
Wind and solar farms also typically need
about twice as much copper as coal power plants.
- Just to demonstrate
how much copper is needed for electrification
by 2031 we're going to need
over 35 million metric tons of copper,
and supply on the other hands
is supposed to lack behind at 30 million metric tons.
- For decades our nation has failed
to meet the climate crisis with the urgency it demands.
- [Narrator] Kamala Harris is talking about
the Inflation Reduction Act,
which has pumped federal funds
toward green energy and electrification.
(audience applauding)
- Through the law, you basically get tax credits,
and also other support
if you are involved in the making of, you know,
wind farms, or factories
that are making solar components and whatnot.
And obviously since copper is such a huge component of that,
it's helping the prices for that as well.
- [Narrator] In May, copper was trading
at a little over $3.50 cents,
a dramatic increase from previous years,
and those prices could continue to rise.
Goldman Sachs estimates that demand for green uses of copper
drives 7% of global consumption today,
up from just 4% in 2020.
And we'll account for a whopping 47%
of total demand growth between 2023 and 2040.
So it's no surprise that copper
is the word on mining leader's lips.
- Copper.
- Exciting copper development.
- We're choosing to prioritize copper.
(bus engine growling)
- [Narrator] It sparked a flurry
of consolidation in the industry.
Glencore, BHP, Rio Tinto, and Newmont
have all made moves to buy up other miners.
- They've realized that copper
is going to be in such a huge need
over the next decade or so,
so they have decided to instead go buy other miners
to get quick access to their deposits
and get them producing in the market much faster.
- [Narrator] But all of this consolidation
can't create more copper.
To find more, companies need to open new mines,
which is very expensive.
- [Mike] What we're not going to do,
is simply go out and buy a stream of copper.
- [Narrator] Analysts say that copper prices
would need to rise to $15,000 per metric ton
to attract investment in new mines.
Today prices are around $8,000 a ton,
and starting a new mine can take a prohibitively long time.
Deutsche Bank estimates that projects
that start applying for permits today
will take around 10 years to reach first production.
- And that's just the permitting process,
that's not even getting to the production part.
So just imagine how long it would take for you
to get any single like mine in the producing stage.
- [Narrator] Plus, new and current mines
have also faced heightened scrutiny
on environmental and social grounds.
- There is increasing amounts of environmental unrest,
social unrest with regards to them being online,
especially as we've seen recently in some countries
when they're trying to do that.
(reporter speaking in foreign language)
- [Narrator] In response to looming shortages,
some companies are looking to change their products.
For example, Tesla is changing the makeup of battery packs
to cut copper usage in their EVs.
- That means we need only about a quarter
as much copper in the car
as would be needed for a 12 volt battery.
- [Narrator] But these changes may not be enough.
Electrification is only expected to increase,
and with it demand for this non-precious metal.
- And that's going to be a thing
that's going to define, you know, commodity markets
for the rest of the decade.
And a lot of people are also saying that
this right now is the next big bull run
in commodity markets.