Diversification away from Chinese copper—a critical mineral needed for green energy—has been slow and could be costly, research shows.
“A scenario without China for the copper supply chain would require a substantial increase in processing capacity to meet energy transition targets,” said Nick Pickens, research director of global mining at Wood Mackenzie.
“Based on our projections, there will be an additional 8.6 million tonnes (Mt) of copper demand outside China over the next decade. This demand represents 70 percent of smelter capability and 55 percent of fabricator capacity in the rest of the world. As governments and manufacturers aim to diversify away from China, it is crucial to consider the entire supply chain, not just mining operations.”
Wood Mackenzie forecasts that copper demand will surge 75 percent to 56 Mt by 2050.
However, it noted that since 2000, China already accounted for 75 percent of global smelter capacity expansion and currently controls 97 percent of global smelting and refining capacity, with the country contributing over 3 Mt of production and about US$25 billion in investment.
The consultancy firm estimates an additional 8.6 Mt of copper demand in the future, which equates to 70 percent of current smelter capability and 55 percent of fabricator capacity in the rest of the world.
This would mean another US$85 billion of investment would be needed to find new smelting and refining capability to displace Chinese facilities.
Outside China, Wood Mackenzie says an additional 16 Mt of capacity will come from one custom smelter in India, two integrated smelters in Indonesia, and a new smelter in the Democratic Republic of the Congo (DRC).
Yet the Indian and Indonesian smelters have yet to be commissioned this year, while the one in the DRC, which is driven in part by Chinese investment, will open next year.
Meanwhile, the United States has yet to invest in primary alternatives, and have instead, focused on secondary smelters and scrap copper, with a new complex in Georgia to be established.
“Financing these investments presents additional hurdles, with resistance to new smelter projects on environmental and social grounds particularly strong in Europe,” said Pickens.
“Pragmatism and compromise will be essential to achieve net zero goals without imposing excessive costs on taxpayers. Easing global trade restrictions could be one necessary concession.”
Australia’s Department of Industry, Science and Resources (DISR) said in its Resources and Energy Quarterly that the country’s export earnings for copper in 2024–25 and 2025-26 have been revised up by $2.5 billion, and $2.7 billion respectively, attributed to an upward revision of forecast prices and higher export volumes of metal content including copper ores, concentrates, and refined.
“Copper is an important metal for the global transition to net zero and demand for copper is expected to rise over the next decade,” a DISR spokesperson told The Epoch Times.
Last March, the Minerals Security Partnership Principals’ meeting concluded, where countries discussed their collaboration on 23 projects, including cobalt, copper, gallium, germanium, graphite, lithium, manganese, nickel, and rare earth elements.
The United States, Australia, Canada, Estonia, Finland, France, Germany, India, Italy, Japan, the Republic of Korea, Norway, Sweden, the U.K., and the European Union all expressed intent to strengthen their partnership on accelerating the development of diverse and sustainable critical minerals supply chains.
