A significant portion of the world is working to transition away from fossil fuels to greener, more sustainable options. Fossil fuels such as coal may have fueled the industrialization age, but their effect on climate change and global warming cannot be understated.
Scientists posit that global warming could lead to a higher risk of disease, increased extinction rates, and untold humanitarian and geopolitical consequences. Several countries across the globe are now in a mad dash to ditch dirty fuels such as oil and coal for sustainable options such as solar and wind energy. However, a major player in the global mining industry has warned that these green and electrification plans may be held back by rolling copper shortages.
The demand for copper has skyrocketed as automakers plan to roll out hundreds of thousands of new electric vehicles over the coming years. This could result in major shortages, said U.S. mining group Freeport-McMoRan chief executive and chair Richard Adkerson. Adkerson added that these shortages will make it “very difficult” to meet the electrification goals countries around the world have set for themselves.
The electric car is poised to be the vehicle of the future as countries look to reduce carbon emissions from transportation. These vehicles need an incredible amount of copper, three times more than a traditional fossil fuel car to be exact. Furthermore, renewable energy projects can use up to five times the amount of copper needed in traditional coal, nuclear and gas power plants.
The mining industry may not be able to meet the demand for copper, at least not meeting the timelines set for electrification by many governments. According to the chair of the world’s biggest copper producer, Codelco Maximo Pacheco, there will be a deficit of around 6 min to 7 min tons of copper over the next 10 years.
Pacheco’s company has had trouble maintaining copper output at its mines in Chile amid coronavirus surges and tight COVID-19. Codelco has also struggled to regain its output, and Pacheco predicts that the company will not be able to reach 2021 production levels for up to four years.
Furthermore, in August the mining company lowered its production output for the year because of lower recovery levels at its mines.
Mining executives said that deteriorating economic conditions across the globe have reduced copper prices and made the supply problem even worse, Adkerson says. Overall, this shortfall in the supply of copper could hinder the world’s efforts to achieve carbon neutrality by 2050 despite the best efforts of extraction companies such as Southern Copper Corporation (NYSE: SCCO) to meet that ballooning demand for the red metal.
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