North American Copper Is Powering The Future
EV megatrend is set for another round of growth, opening the door for North American miners to take the lead in 2020.
A small army of engineers and geologists are racing across a vast swath of North American prairie in an urgent drive to develop what could be one of the world’s richest copper mines.
Generally, a massive new copper mine is not huge news. After all, traditional thinking says copper is so easily recycled there is usually enough to meet demand.
But, 21st century realities have exposed that thinking as outdated.
Headlines are already declaring a huge copper shortage.
- The advent of the age of the electric vehicle, each one powered by batteries that contain 183 pounds of copper at a minimum, is rapidly heightening demand. And with the IEA’s forecast for 125 million EVs on the road by 2030, the world will need at least 35 billion pounds of copper, likely a lot more.
- The International Energy Agency forecasts that the world will add more than 350 additional megawatts of wind power in the coming years, which will require at least 8 billion pounds of copper.
Tight Supply And Increasing Demand
“This year we’re forecasting a refined metal deficit of about 270,000 metric tons,” BMO Capital Markets analyst Kash Kamal told Reuters. “The tight concentrate market can be seen in treatment charges.”
The potential for a huge critical shortage has copper analysts wary.
The Smart Way To Bet on Global Growth: North American Miners
Max Layton of Citi is one of them. He told Reuters, “With the bulk of Zambia’s power sourced from hydropower plants, the ongoing drought may lead to imminent load shedding lasting as long as the next six to nine months and potentially impacting copper production.”
There’s no denying that what’s happening now favors North American copper companies.
That’s’ why investors should now focus their attention on one North American copper miners in copper’s world-renowned “Ring of Fire”. Historic sampling shows grades 3 times more than typical mines in the area.
Good News For North American Copper Companies
Before you examine the other critical factors that are stressing the copper supply, it important to see why North America, in particular Canada’s British Columbia Province, is so vital to supply chains.
The Ring of Fire was named for all of its – mostly ancient – volcanic activity. Mount St. Helens, in Washington state is one of its most famous, and active volcanoes.
Buried way underground under its long-hardened lava, vast amounts of metals and rare earth are found hiding, which is why copper and gold mines become open pits thousands of feet across and deep. The mines are massive because metals are not found in chunks, they’re spread in small amounts throughout the rock.
EV Obsession Is Just Half The Story – Copper Is What Gives Wind Power Life
The International Energy Agency forecasts that the world needs to build more that 350 additional gigawatts of wind power in the coming years, which will require at least 2.8 billion pounds of copper.
Little known fact: wind and solar energy use more copper than conventional forms of energy, such as coal, natural gas, and nuclear power plants.
Conventional power plants require about one ton of copper to produce one megawatt of electricity, whereas wind and solar can require between three to five tons per megawatt.
That’s based on an industry metric that finds every 3MW needs 4.7 tons of copper.
EVs Will Grab All The Natural Resources Attention
Then, there are the EVs.
To put into perspective how unimaginably huge the coming demand could be, last year one of the big Chinese electric vehicle maker – by itself –consumed 26 million pounds of copper.
By 2027, copper demand stemming from EVs is expected to increase by 3.4 billion pounds, which is a number just shy of China’s entire copper production in 2017.
Demand for the metals used in electric vehicle batteries could increase six-fold if electric cars can touch 8 percent of road traffic by mid-2020s. Most of the EVs will be powered by batteries that can require 183 pounds or more of copper for cars and somewhere between 300 and 814 pounds of copper for trucks and buses.
Thank Jeff Bezos When Copper Demand Soars
In truth, while the estimates for demand are massive they may be too low.
Early forecasts didn’t account for Jeff Bezos plans to put 100,000 EV delivery trucks on the road.
The world’s largest e-commerce company ordered the electric delivery vehicles from a U.S. vehicle design and manufacturing startup. Bezos said the first electric delivery vans will be on the road by 2021, and all 100,000 will be deployed by 2024.
All in all, the entire 100,000 truck project will likely demand at least 150 tons of copper.
Most people think copper miners are ready for all the new EVs and wind turbines that are forecast to hit the market for the next few years, but 125 million new EVs, and 350GW could create massive and unprecedented demand. This is why the most conservative forecasts calls for copper demand to increase 6 times over the next 10 years.
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