We’ve been hearing a lot about shortages over the past few years: energy, semiconductors, lumber, lithium, helium, water—it’s a long list (although semiconductor and lumber shortages seem to have eased a great deal in the past year). Some of these shortages are undoubtedly real, but the cynic in me says some of them are hype-driven, manufactured to drive investor interest or to get additional government funding.

Still, there are materials experiencing an increase in demand with little to no increase in availability, such as copper. Yes, that easy-to-refine metal that has been used for thousands of years is now on the “worry list.”

Despite copper’s many uses, from PC boards to interconnects, it doesn’t get the same attention as ICs or rare earths since it’s often considered “old news” and mundane—yet it’s the third most widely used metal in the world, after iron and aluminum. Copper has many useful and advantageous mechanical, chemical and electrical properties, and it’s one of the last materials to get attention from EEs. After all, it has the lowest resistivity of any non-precious metal and is second only to silver in conductivity among all metals.

Increased demand for copper

There are many reasons for the anticipated surge in copper demand. Perhaps most visible are the needs of electric vehicles (EVs), which require much more copper per vehicle compared to internal combustion engine (ICE) vehicles (see Figure 1). Then there’s the overall push for increased electrification from top to bottom, including consumer ranges, EV charging stations, and high-voltage transmission lines, and renewable sources like wind farms.

Numbers tell the story, and for basic commodities like copper, there are lots of them available from various sources and perspectives—unlike some other market numbers, which are at best educated guesses, these numbers seem to have reasonably good credibility. Copper production has increased steadily over the last 30 years (see Figure 2) and there’s even reasonably good data going back to the early 1900s with a similar track.

Will copper supplies grow?

The big question is, to what extent will production continue to grow? Getting more copper ore isn’t easy—you can only extract copper where there’s an available ore. Chile accounts for over one-third of world’s copper production, followed by Peru, the Democratic Republic of the Congo, China, United States, Australia, Indonesia, Zambia, Canada and Poland. A huge mine just opened in the Gobi Desert of Mongolia this year, so its output isn’t listed yet. The largest copper importers are China, Japan, India, South Korea and Germany.

Promising new locations for mining copper ore don’t just happen—they must be found and assessed. Meanwhile, the ore quality at existing sites is decreasing as the mines are played out, so extraction is more costly. Getting a copper mine up and running takes at least 10 years and $5-10 billion dollars—that’s longer than a semiconductor fab and roughly the same cost.

Furthermore, the associated environmental issues, impact and footprint are enormous, as is the infrastructure needed for a viable mine, including roads, huge amounts of electricity, airport, housing for thousands and much more. While recycling copper sounds like a partial answer, reality is that available sources of copper to recycle are limited—not to mention the recycling process is both a costly and complex process.

Given these factors, how much will demand for copper grow in the next few years and decades? There are many forecasts and opinions, ranging from 5-35% depending on which “expert” you follow. After all, as Yogi Berra, the American professional baseball catcher, said, “Predictions are very difficult to make, especially about the future.” Regardless of the specific number, there’s little doubt that the demand for copper will grow significantly, while its availability will be limited by nature and the increasing cost of extracting, as well as handling, refining, purifying and fabricating it into whatever final form it needs to have.

Do you think the impending copper “crisis” is real or yet another hype-driven story? Have you seen or felt the effects of increased copper costs or limited availability of specific copper-based products you need, even for basic ones like some connectors or types of contacts? What could you change in your projects if copper prices increased dramatically, or actual availability of some copper-based components were greatly reduced?

By: DocMemory
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