Global Copper Demand Surges Amid Severe Mining Supply Disruptions
Wood Mackenzie and UN agencies warn of systemic copper shortages as energy transition and AI needs clash with major mine failures in Chile and Indonesia.
Global copper demand is projected to rise 24% by 2035, reaching 42.7 million tonnes per annum. According to Wood Mackenzie, this growth is fueled by the energy transition, AI-driven data centers, increased defense spending, and industrialization in India and Southeast Asia. Electric vehicle demand alone is expected to double by 2035, as these vehicles require up to four times more copper than conventional cars.
Supply chains are under severe strain due to operational failures. A fatal mud rush at Freeport-McMoRan's Grasberg mine in Indonesia is expected to limit production until 2027, while earthquake-induced tunnel collapses at Codelco's El Teniente mine in Chile reduced August production by 25%. Further disruptions include flooding at Ivanhoe Mines' Kamoa-Kakula mine and cuts at Teck's Quebrada Blanca facility. The International Copper Study Group has lowered its 2025 mine production growth forecast to 1.4% and predicts a market deficit by 2026.
Market volatility persists as prices rebound, with some traders predicting $12,000 per ton following Federal Reserve signals for interest-rate cuts. However, US-China trade tensions remain a factor, with President Donald Trump suggesting penalties against China while Treasury Secretary Scott Bessent proposes tariff pauses. UN Trade and Development warns that meeting this demand requires 80 new mining projects and $250 billion in investment to prevent the metal of electrification from becoming a metal of scarcity.
