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Copper is critical to almost everyone

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Everyone agrees that historically enormous quantities of copper are essential to wiring a world in which low-carbon electricity delivered via powerlines supplants fossil fuels pumped through pipelines as the energy solution of choice. The federal entity charged with compiling the list of minerals critical to the United States, however, disagrees with nearly every company, organization, and person associated with the clean energy supply chain on the criticality of the conductive metal.

The case for copper’s criticality is backed by commodity analysts who predict global copper production will need to double by 2035 to meet demands driven by global net-zero emission goals. Building that level of capacity in just 12 years, while at the same time not losing any output from existing mines, is a highly unlikely scenario.

In its most optimistic forecast, S&P Global estimates that annual production from global mines will be 1.6 million metric tons (3.5 billion pounds) short of meeting copper demands in 2035. In its most pessimistic scenario, this copper shortage is a staggering 9.9 million metric tons (21.8 billion lb).

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“The challenge is that if current trends continue … there’s a huge gap,” S&P Global Vice Chair Daniel Yergin said upon the release of the copper analysis. “And even if you put on your roller skates and your jet burner [to realize optimistic supply growth], and everything goes right, there’s still a gap, because it’s enormous. And it’s important to recognize that now, not in 2035.”

This warning follows a 2020 World Bank report that estimates that the green energy transition alone will require approximately 550 million metric tons (1.1 trillion lb) of copper over 25 years and a 2022 report and Goldman Sachs declaring copper as the “new oil” due to the critical role it plays in the clean energy future.

Despite the growing consensus that it is going to require extraordinary measures to ensure that there is enough copper to achieve global net-zero carbon emission goals, the U.S. Geological Survey has remained steadfast in its refusal to add this metal to America’s critical minerals list.

Fielding a question on copper’s criticality from mining executive Rick Van Nieuwenhuyse during an Arctic critical minerals summit in Washington, DC, USGS Director Dave Applegate said his agency’s determination that copper is not critical is based on a supply risk assessment.

“There are many essential minerals, and copper absolutely is an example of that,” he said.

The USGS, however, does not see enough risk for supply chain disruptions to elevate copper onto the critical minerals list – a risk assessment that seems to ignore the forecasts that demand will outstrip supply over the next two decades.

With it becoming increasingly apparent that it is going to take an act of Congress to elevate copper onto the US critical minerals list, a group of Washington lawmakers have decided to do just that.

In June, Congressman Juan Ciscomani, R-Ariz., introduced the Copper is Critical Act, a bill that would elevate copper’s criticality status – with or without USGS consent.

“It’s obvious” copper is critical

The debate over copper’s criticality has been brewing ever since the USGS unveiled its updated list of critical minerals in 2022. Copper was nowhere to be found between the aluminum and zinc on this list of 50 minerals and metals deemed critical to the U.S.

Given the enormous quantities of copper needed to wire the wind turbines, solar farms, electric vehicles, and increased electrical transmission lines that will deliver the envisioned low-carbon future, this omission was a surprise to many mining executives and analysts.

This includes billionaire mining magnate Robert Friedland, who contends that adding the red energy metal to the list is essential to achieving the White House’s climate goals.

“It has to be, it’s obvious,” he said in response to a question on copper criticality during a June interview on Bloomberg TV interview. “America hasn’t developed a mine of consequence for 40 years. The mining of copper is “absolutely critical.”

Research analysts at Goldman Sachs contend that copper is so “critical to moving the global economy toward net-zero emissions” that they have deemed this metal the “new oil.”

In an updated version of their 2021 “Copper is the new oil” report, Goldman Sachs analysts wrote, “The copper market is unprepared for this critical role.”

Much like S&P Global, Goldman Sachs foresees green energy demand outstripping the mining sector’s ability to supply copper over the next decade.

Based on the expected large supply gap and increased competition that sees copper supplanting oil in the realm of global geopolitics, the Copper Development Association decided to get a second opinion on copper’s criticality.

“Because USGS data was considerably out of date upon the release of the 2022 Critical Minerals List, and the risks to copper from imports has increased dramatically, we engaged an analyst to update copper’s supply risk score with the most recently available data to 2022,” said Copper Development Association President Andrew Kireta, Jr.

Based on this analysis, which mimicked USGS methodology, the CDA concluded that copper has hit the “critical” echelon and called for the electrical conducting metal to be included in the U.S. critical minerals list.

“Copper is and always has been critical to our economic and national security but now to the clean energy transition as well,” Kireta added. “As copper now meets the threshold for inclusion based on the very latest available data, we need to act immediately to enable the copper industry to provide the essential inputs that copper provides to our national defense and economic security.”

Critical copper coalition

A large critical copper coalition that includes U.S. lawmakers from both sides of the aisle and 75 trade associations and unions representing essentially the entirety of the American economy joined CDA in petitioning the USGS to elevate copper’s criticality status.

This coalition includes many organizations that do not typically advocate for mining, such as the Electric School Bus Coalition, National Mining Association, United Association of Plumbers and Pipefitters, and Zero Emission Transportation Association.

This seemingly unlikely advocacy group, however, did not mince words in their support of immediately adding copper to the U.S. critical minerals list.

“We, the undersigned users, consumers, partners and supporters of the copper industry write to urge you to formally designate copper as an official USGS Critical Mineral without delay,” the coalition penned in a Feb. 2 letter to U.S. Secretary of Interior Deb Haaland.

Six U.S. senators – Kyrsten Sinema (I- AZ), Mike Braun (R-IN), Mark Kelly (D-AZ), Joe Manchin (D-WV), Mitt Romney (R-UT), and Raphael Warnock (D-GA) – were equally emphatic that the Department of Interior reexamine copper’s criticality.

In their own letter to Haaland, the senators pointed to a recent S&P Global report that forecasts a “chronic gap between worldwide copper supply and demand projected to begin in the middle of this decade will have serious consequences across the global economy and will affect the timing of Net-Zero Emissions by 2050”.

“By recognizing copper as a critical mineral, the United States’ federal government can more effectively ensure a secure and reliable supply of domestic copper resources in the years to come at all points of the supply chain including recycling, mining, and processing,” the senators wrote in the letter to Haaland.

Debate heats up

USGS, which falls under Halland’s Interior Department, held steadfast that copper does not belong on the list of 50 minerals critical to the U.S.

“While copper is clearly an essential mineral commodity, its supply chain vulnerabilities are mitigated by domestic capacity, trade with reliable partners, and significant secondary capacity,” Applegate penned in a May letter to U.S. Sen. Kyrsten Sinema, I-Ariz. “As a result, the USGS does not believe that the available information on copper supply and demand justifies an out-of-cycle addition to the list at this time.”

Applegate’s letters to Sinema and other senators petitioning for copper’s criticality elicited an uncharacteristically heated response from Kireta.

“Despite clear data showing that copper’s supply risk score is now above the threshold for automatic inclusion on the 2022 Critical Minerals list, USGS sent well-crafted letters to a bipartisan group of congressmen and senators filled with misleading arguments that were not part of its own official 2022 methodology, or consistent with the spirit or letter of the law, to justify a decision to forego immediately adding copper to the list,” said the CDA president. “This decision was made even though Secretary Haaland has the authority given to her by statute to add copper to the list, without waiting for the next update in three years.”

Arizona Rep. Ciscomani and members of the Western Caucus decided that if the USGS were unwilling to put copper on the critical minerals list, they would let Congress take up the matter.

“Designating copper as a critical mineral will open up more doors to creating a dependable domestic stockpile of the material,” he said.

The Copper is Critical Act introduced by Ciscomani proposes that copper be deemed critical, period.

“We must ensure that America’s manufacturers and supply chains have ready, reliable, economic access to copper to meet the growing demand and policy goals for a cleaner electrical grid, a lower carbon economy, and a strong and resilient defense sector,” said Kireta. “CDA calls upon members of Congress to not accept USGS’ decision lightly and to undertake all means and measures to address this ill-conceived and unfounded decision.”

DOE elevates copper’s status

As the USGS continued to fend off pressure to elevate copper’s criticality, the U.S. Department of Energy included the red metal on its list of critical minerals.

Copper’s critical inclusion came in DOE’s “Critical Materials Assessment 2023”, a July report detailing the department’s analysis of materials essential to electric vehicles and renewable energy infrastructure.

“As our nation continues the transition to a clean energy economy, it is our responsibility to anticipate critical material supply chains needed to manufacture our most promising clean energy generation, transmission, storage and end-use technologies, including solar panels, wind turbines, power electronics, lighting, and electric vehicles,” said Alejandro Moreno, acting assistant secretary for DOE’s Office of Energy Efficiency and Renewable Energy.

CDA was quick to commend DOE for being the first U.S. agency to join the European Union, Japan, India, Canada, and China in recognizing copper’s critical role in a world transitioning to clean energy and transportation.

“Copper is a major contributor to U.S. economic and national security, and with copper demand projections doubling by 2035, primarily due to plans for the clean energy transition, electrification, and clean water infrastructure,” said Kireta. “The nation would be defenseless without electricity and copper’s vital role in its generation, transmission, and distribution.”

DOE agrees with USGS’s assessment that there is a diverse and relatively low-risk global supply of copper, but expressed concerns that falling ore grades will impact future supply and growing competition on the demand side. It is this longer-term view that prompted the Energy Department to deem copper as critical.

“Ultimately, identifying and mitigating material criticality now will ensure that a clean energy future is possible for decades to come,” Moreno added.

While CDA is pleased to see DOE’s recognition of copper as critical to America’s energy transition, the copper mining sector association is continuing to advocate for copper’s inclusion on USGS’s official list, which has implications when it comes to streamlining permitting and federal funding and tax credits.

“The U.S. should do all it can to protect and promote our domestic copper industry,” Kireta said.

 

Source: metal tech news

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