The world’s biggest copper producers are warning of an imminent supply shortage globally, as mines won’t be able to deliver enough of the metal to keep pace with the clean energy transition,
while investors and banks are cautious about financing new projects amid the weakness of the global economy and mounting inflationary pressure.
Despite headwinds, copper remains the top choice on the mining agenda. According to S&P Global, the capital allocation share for 2024 is heavily weighted toward copper (c. 30% of the total spend, see Fig. 2), followed by gold (28.1%) and iron ore (18.3%).
In the next couple years, the refined copper market will shift to a surplus. Estimates by the International Copper Study Group (ICSG) suggest that the shortfall will shrink from last year’s 461,000 tonnes to 27,000 in 2023, with production to exceed usage by 467,000 tonnes in the following year, driven mostly by additional output from new or expanded mines in the Democratic Republic of the Congo, Peru and Chile.