Copper shortage seen as EV ‘supply risk’

A shortage of copper has been pinpointed as “the last remaining supply risk for the EV industry”.

In a Bloomberg article, experts said there was a “core disconnect at the heart of the industry; miners just aren’t building enough mines”.

“The biggest producers all want to increase copper output to take advantage of rising demand in electric vehicles, grid infrastructure and data centers,” the story said. “Yet, that bullishness still isn’t translating into the huge investments involved in developing new pits and shafts.”

It quoted Bernard Dahdah, senior commodities analyst at Natixis SA, as saying: “Copper looks like the last remaining supply risk for the EV industry.

“In a net-zero scenario, we’re going to need a vast amount of copper, and we’re going to need a different strategy to boost supply.”

The article said one of the problems was that funding for small explorers was getting harder to find.

“At a geological level, we have the projects – what we need is the money”, said Dahdah.

Full article here.

Meanwhile, the potential copper shortage over the next 5 years has been laid bare in a new article in London’s The Times.

The story says a “supply gap of up to 35 per cent by the end of the decade” was likely, according to a top economist.

Saad Rahim, chief economist at Trafigura, said: “That is like blowing a 20 million barrel-a-day hole in the oil market and yet we keep adding new sources of demand and reducing the amount of supply.”

Trafigura, based in Singapore, is the world’s largest independent trader of metals.

“Copper has a structural issue”, Rahim said, “or I call it the 30-40-50 issue, which is that the average project is now 30 per cent smaller than it was in the last decade. So you need a lot more projects. It’s 40 per cent, at least, more cost-wise to do and it takes at least 50 per cent longer to do.”

Full story here (note PAYWALL).

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