Geopolitically Friendly ‘Red Metal’ Critical to Global Clean Energy Future

Dubbed ‘red metal,’ copper, the third most consumed industrial metal in the world, plays a crucial role in the world’s clean energy revolution; there can be no green revolution without copper. Over 35% of the world’s annual global copper production is sourced from South America, with the largest mines in Chile and with Peru rapidly increasing its copper production. Adding North America into the mix, the Americas account for over half of the world’s copper supply.

“China accounts for 9% of global production, with the largest producers being Chile, Peru, the Democratic Republic of the Congo and the US. Exports of copper from China increased by 47% in 2022 over 2021,” reports Mining Technology.

As more green energy legislation passes in future-forward nations, with the goal of weaning off petroleum, where will we find sufficient supplies of copper to make a geopolitically-sound green transition? As the President & CEO of a copper exploration and development company, I believe it is important to assess the geopolitical ramifications of where copper is sourced and processed. More mining explorers and investors are today aligning with geopolitically friendly regions in South America, North America, and Australia rather than allowing other regions to control and influence the market price of copper.

“If China’s dominance of rare earth element supplies is the global energy transition’s ‘elephant in the room,’ then copper is the 800-pound gorilla,” according to the Baker Institute. President Biden’s decision to invoke the Defense Production Act last year to expand domestic production of critical minerals, which includes copper, is facilitating efforts of mining companies to produce copper in the United States. Rio Tinto Group, a multinational company that is the world’s second-largest metals and mining corporation, is investing in a major copper operation in Utah. Rio looks to “strengthen its supply of copper in the US by increasing production from underground mining and improving the health of key assets,” reports Global Mining Review.

In use for thousands of years, copper faces increasing global demand with the advent of modern technology. Copper is used for electrical purposes such as power transmission and generation and plays a major role in the electric vehicle (EV) revolution, with McKinsey & Co. expecting increased annual copper demand to rocket to 36.6 million metric tons by 2031. With the supply forecast coming in at 30.1M tons, McKinsey anticipates a 6.5M ton shortfall by 2030.

A new book by Dr. James Michael Wise, titled “Red Metal in the Blue Planet: The History of Copper and the Outlook for the Future,” explores the history of copper mining and our outlook on the future use of the metal. Dr. Wise writes that “the difference between the Stone Age and the current advanced civilization we have today arrived through the extraction and adaptation of copper.”

“Whether it was through the organization of Bronze Age armies using weapons or the sparks being carried through wires to light our homes, the red metal shaped evolution of humankind,” says Dr. Wise. “This long development from ceramic pots to smelting of metals is reviewed for mining innovations and major contributions provided by copper, which drove exploration of the continents and construction of the cities.”

“The United States will need to be more aggressive about developing its own home-grown mining and minerals processing,” reports The Hill. “This means easier permits to mine and process minerals domestically.”

The alternative to geopolitically-friendly copper mines is not a lack of mines but foreign-run mines and minerals processing with lax environmental regulations and often geopolitical interests that are in opposition to our own.