When BHP made its unsolicited play on OZ Minerals in August, many in the industry took it as a sign that majors are keen to get their hands on future-facing critical minerals – copper chief among them.
As the world moves towards an electrified future with the goal of net-zero emissions, copper sits comfortably at the centre of the resources vital to that transition.
According to a recent report from S&P Global, copper’s role in building electric vehicles (EVs) and trucks, transmission lines, and solar and wind farms will double demand for the metal in the coming decades.
“Copper – the ‘metal of electrification’ – is essential to all energy transition plans,” the report stated. “But the potential supply–demand gap is expected to be very large as the transition proceeds.
“Substitution and recycling will not be enough to meet the demands of EVs, power infrastructure, and renewable generation.
“Copper demand is projected to grow from 25 million metric tons (MMt) today to about 50 MMt by 2035, a record-high level that will be sustained and continue to grow to 53 MMt by 2050.”
While analysts at Wood Mackenzie predict a smaller shortfall, they share a similar overall outlook for the commodity, saying much more investment is needed to meet near-future copper demands.
The consultancy’s analysis indicates “9.7 million tonnes of new copper supply is needed over 10 years from projects yet to be sanctioned, equivalent to nearly a third of current refined consumption”.
“Copper’s critical role in the energy transition is undisputed,” Wood Mackenzie research director of copper markets Nick Pickens said in October. “It’s the significant pull on the metal’s existing and potential supplies, and the investment required that needs urgent attention.
“To successfully meet zero-carbon targets, the mining industry needs to deliver new projects at a frequency and consistent level of financing never previously accomplished.”
It is these types of industry outlooks that have pushed majors to acquire as many critical minerals – most importantly copper – as possible.
When BHP made its initial takeover offer for OZ Minerals – an offer that was almost immediately rejected because it was felt it did not properly value OZ’s copper and nickel portfolio – many considered it a further sign the mining giant was moving in that direction.
“The deal would fast-track BHP’s desire to get more exposure to the metals needed for decarbonisation and electrification, specifically copper and nickel, after a whirlwind four years under chairman Ken MacKenzie that has seen BHP exit the vast majority of its oil, gas and coal assets,” reporters wrote in the Australian Financial Review at the time.
And BHP is not alone among the majors in its pursuit of such resources.
For example, Rio Tinto has long been working to secure the 49 per cent of Turquoise Hill Resources that it doesn’t already own, largely so it can it gain control of the Oyu Tolgoi copper mine in Mongolia, described as one of the largest known copper deposits in the world.
Despite the fact Rio has faced numerous major setbacks in this pursuit, all signs indicate it will continue its push for the company, underlining its desire to secure a major global copper pipeline.