The copper market

The journey to become a sustainable copper mining company

Copper is among the three most widely used metals in the world and large quantities have to be mined every year to meet global demand. Copper has very good electrical conductivity and is used almost in all electrical wires and in a variety of industrial machines. In addition, copper is an essential component of the transition to green energy. Essentially, as the global transport sector gradually becomes greener (more electrified), demand for copper is increasing. For example, the International Copper Association (ICA) estimates that a car running on fossil fuels requires 25 kg of copper, while a hybrid car requires 50 kg of copper and an electric car requires 75 kg. In addition, it is estimated that each megawatt wind power, an energy source that is becoming more common, requires 3.6 tons of copper.

Copper is also one of the most recycled metals, increasing the metal’s efficiency and making it more sustainable. The world’s transition to renewable energy and the increase in electrification globally are expected to increase demand for copper over time. At the same time, there are clear signs of reduced supply due to falling copper grades among some of the world’s major copper producers. Electric car revolution speaks for copper.

Four reasons why the electric car revolution is now moving so fast:

  • The environment: the combustion of petrol or diesel in an combustion engine produces toxic exhaust which has negative impact on air quality and climate. The EU’s emissions target of 95 g CO2/km, forces car manufacturers to electrify their products.
  • Tesla: which has inspired a whole world of new startup automakers (BYD, Nikola, Sono and Rivian) and forced established companies like VW to aggressively change their strategies and accelerate the development of electric cars.
  • Physics: an electric motor is 3-4 times more efficient than an combustion engine = less fuel and cheaper use.
  • Economy: lifetime operating costs for an electric car are already cheaper than combustion engine cars. In the long run, as mass production of batteries and electric motors, electric cars will be cheaper to buy than cars with combustion engines.

Not only cars
Electric engines in scooters and bicycles are cheaper, cleaner, more robust and more quiet than combustion engines. This also applies to heavy trucks and for example the world’s largest truck from ETF Mining Equipment is fully battery-powered with a payload capacity of 774 tons. The change is alos happening in shipping. The largest ships in the world today are all powered by electricity, with the power coming from diesel or nuclear power. In the future, that power may come from batteries and hydrogen. The air transport industry will probably go the same way.

Copper among the winners
Electrification of transport will continue. The pace of change will increase driven by continued innovation and regulatory pressure. In addition to the recasting of conventional transport value chains, the impact on raw materials will most likely be very big. The winners are materials used in batteries. The most important materials in a lithium-ion battery are lithium and graphite, which together make up over 50% of the battery’s weight. Both of these raw materials are plentiful. Nickel will also be a big winner among battery metals. Basically, more nickel means a higher energy density, which leads to better performance and longer range. The other long-term winner will be copper, which is used worldwide to transport electricity. Electric cars can have up to 5 times more electric cables than a normal car when the battery pack itself is full of copper. In addition, more copper is needed to expand the necessary electrical infrastructure, i.e. in charging stations, networks or cables around new power generation installations such as solar installations.