ANN ARBOR—The price of copper must at least double in order to spur the development of new copper mines to meet the world's growing demand for the metal, according to a team led by a University of Michigan researcher.
A research team led by U-M geologist Adam Simon examined barriers to producing the copper necessary to meet demands for the metal under different scenarios. They found that meeting basic copper demand is possible, but will require higher prices and reforms to the permitting process to encourage mining.
In order to meet "business as usual" demands for copper—the normal socioeconomic development of infrastructure, electricity, heating, cooling and other modern technologies—the world will need about 37 million tons of copper per year by 2050. That's compared to about 23 million tons mined in 2025. However, to switch to energy provided by 100% renewable resources, and all-electric vehicles, that need jumps to 91.7 million tons per year.
Either way, we will have difficulty meeting that demand if the price of copper does not rise, or if the ability to mine it does not become streamlined, according to Simon, U-M professor of earth and environmental sciences, and his co-authors. Their perspective paper is published in the journal Energy Research & Social Science.
"Copper is the fundamental linchpin for socioeconomic development, acting as the connective artery for infrastructure, digital intelligence, and electricity generation, transmission and storage. Without substantially increasing copper supply, global development will not happen," according to Simon.
The price for copper, which currently sells for about $13,000 per ton, needs to at least double in order to incentivize mining companies to pursue new mines, according to the researchers. To determine this number, the researchers used industry reports, databases and confidential merchant bank data to calculate how much it cost to develop existing mine projects across the world.
They found that the development of a copper mine in Mongolia cost $18,916 per ton of copper produced annually. A copper mine in Panama cost $31,318 per ton of copper produced annually, while a copper mine in the United States cost $29,614 per ton of copper. Twenty-six copper mines are expected to begin operations by 2030; on average, they're expected to cost $22,359 per ton of copper produced annually.
"A near certainty is that copper price must rise substantially if mining rates are to meet as-usual expectations—even from their highs currently," Simon said.
The researchers also examined alternative sources of copper and materials that could be used as alternatives to copper. They project that recycling could provide about 13.4 million tons of copper by 2050, or about a third of what is needed for "business as usual." Mining low-grade rocks—rocks with small amounts of copper—and leaching copper from materials leftover from mining could provide an additional 4 million tons of copper annually. Alternatives to copper such as stainless steel, aluminum and plastics could alleviate some of the demand, but potentially with the tradeoff of higher emissions.
The researchers also argue that faster, more predictable permitting is necessary, without sacrificing environmental and community safeguards.
"Policies that would encourage mining, include streamlining and simplifying the permitting processes, improving global market transparency, liquidity, governance, price discovery, and guaranteed off-take agreements to make capital-intensive, long-term mining projects economically viable," Adam said.
In addition to "business as usual" economic development, Simon and his co-authors point out that developing countries still need copper for basic construction such as electricity distribution and telecommunications, air conditioning and heating, plumbing, industrial equipment, rail and public transportation systems and vehicles.
For example, they write, for every person in the United States, European Union and other high-income countries, the built environment already contains about 441 pounds (200 kilograms) of copper. For each person in India and countries across Africa, the built environment contains less than 1 pound (about 0.5 kilogram) of copper. Economic development to raise the standard of living in these regions will require an enormous amount of copper.
"The world is not running out of copper; it is running out of time to produce it. Getting it out of the ground fast enough to meet rapidly growing demand will require immense political prioritization and broad public support for mining," Simon said.
