During this year’s CRU World Copper Conference, Erik Heimlich stated that the international copper industry would need to invest more than $100 billion into mine construction in order to close a yearly supply deficit of 4.7 million tons by 2030.
CRU Group is an intelligence company that provides management consultancy and market analysis services for the metals and mining industries. Heimlich, who is the head of base metals supply at CRU, stated that the supply gap for the next few years was estimated at 6 million tons annually as the electric-vehicle and clean-energy sectors increased production.
Heimlich, who is also an analyst, explained that to close the deficit, eight projects, which were all the size of the Escondida mine, would need to be built in the near future. However, he continued, project completion rates weren’t high, with a significant share of greenfield possible projects still being underdeveloped, which raised questions on whether the supply gap could be responded to in a timely and efficient manner. The Escondida mine is owned by BHP and is located in Chile. It is the biggest copper mine globally.
Over the last few years, a number of copper mines have come online, with Anglo American mining its first ore at its Quellaveco mine late last year. Ivanhoe Mines also began to produce copper concentrate at its DRC Kamoa-Kakula project in May 2021, achieving commercial production the following quarter.
Additionally, Cobre Panama, a mine owned by First Quatum, also achieved commercial production a few years ago. Estimates show that the asset holds about 3 billion tons in proven and probable reserves.
However, these additions may not be enough to meet demand. Experts expect that increases in the supply of copper will decrease after 2025, despite the positive run in the near term. A significant amount of new supply may come from Pakistan’s Reko Diq, however, after Barrick Gold entered into an agreement with the country’s government.
The KSM project by Seabridge Gold and the Tampakan project by Alcantara Group in the Philippines are also expected to help close the supply gap. Production at Mongolia’s Oyu Tolgoi copper-gold mine by Rio Tinto is also set to begin soon after overruns and delays. This billion-dollar mine, which recently underwent expansion, may play a key role in closing the deficit.
SolGold’s Alpala copper-gold project in Ecuador may also play a role in closing the global supply gap. However, the company hasn’t yet published the project’s prefeasibility study.
Supply gaps aren’t only forecasted for the copper segment. Even uranium could be in short supply a few years from now if all the countries that are planning to leverage nuclear energy in their decarbonization efforts bring their reactors online. As demand grows, we are likely to see entities sech as Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) ramp up their extraction activities as their revenues grow in tandem with the added demand they are observing.
NOTE TO INVESTORS: The latest news and updates relating to Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) are available in the company’s newsroom at http://ibn.fm/UUUU
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