The world is heading towards a massive raw material shortage, but most of us are not (yet) noticing much of it. This will inevitably change sooner or later, but perhaps too late. Many key raw materials are or will become scarce in the coming years, and copper is one of them. What’s looming is not just a small, manageable, and above all temporary deficit between supply and demand, but a dramatic bottleneck.

The situation is already so tense that the UN Conference on Trade and Development (UNCTAD) felt compelled to issue an urgent warning. The reason: Global copper demand will increase by a staggering 40% from current levels by 2040. This exploding demand is driven by electromobility, the energy transition, AI infrastructure, and massive solar expansion.

None of these reasons are really new. However, a problem doesn’t solve itself by constantly ignoring it and pretending it’s not there. The facts have been speaking very clearly for some time now. If the expectations for future copper consumption are even remotely correct, it’s already clear today that copper production cannot keep up with copper demand.

Large Mining Companies are Already Reacting, while Investors are Still Distracted

To prevent the looming deficit, investments of 250 billion euros would need to be made, according to analysts. By 2030 alone, which is just around the corner from a mining company’s perspective, more than 80 new copper mines are needed to meet the expected demand.

A Chinese proverb says that no one will put spilled water back into the bottle, and in mining, it’s a trivial realization that years lost through inaction cannot be made up, even with great efforts. The reason is the extremely long times that pass between initial exploration and the start of a mining operation.

Within the mining industry, the danger of the impending global copper crisis has been recognized for a long time. For example, Rio Tinto didn’t hesitate two years ago when Pan American Silver was looking for a buyer for its copper assets. The Australians spent 45 million US dollars to acquire a 57.74% stake in the Agua de la Falda exploration site in Chile. The remaining 42.26% of the project was and still is held by Codelco, the world’s largest copper producer.

This Move Made Far-Sighted Investors Take Notice Already in 2023

“Copper is critical to the global energy transition, which is at the heart of Rio Tinto’s strategy, and Chile is one of the most important sources for global supply as demand for copper for renewable energy and electrification increases”, said Jakob Stausholm, the CEO of Rio Tinto at the time

What was unusual about this deal was that Rio Tinto had taken over an early-stage exploration project. Normally, large mining companies tend to enter more developed projects at later stages. The fact that they deviated from this approach and took on the risk of exploration themselves shows once again how high the pressure within the industry already was in 2023 – and today it is by no means lower.

Those who believe that Rio Tinto panicked a bit too much back then must explain why Glencore also spent 475 million US dollars at the time to acquire a majority stake in the MARA copper project in Argentina’s Catamarca province from Pan American Silver. Even then, a resource of 5.4 million tons of copper and 7.4 million ounces of gold was enticing, giving the mine an initial life of 27 years. This acquisition made Glencore the sole owner of the facility, after it had already taken over Newmont’s 18.75% stake in 2022.

Many Investors are Still Enjoying the Sleep of the Righteous

Two heavyweights in the industry, who can be assumed to know the copper market best and can reliably estimate supply and demand in the long term, thus already reacted two years ago. However, the copper price has essentially moved sideways with fluctuations since 2021.

Many investors think that the period up to 2030 is still quite long. However, for the development of a large copper project, five years is an extremely tight timeframe. Currently, the market is also playing the recession card, and because significantly less copper is demanded during economic downturns, many investors feel justified in giving the cold shoulder to copper, its producers, and all those companies that are developing promising copper projects like American West, Aztec Minerals, Formation Metals, or MAX Resource.

This mistake could soon backfire. Because when do these investors want to enter the copper sector? Only when the first 100% upward movement is already behind us? Those who enter now must live with the risk that it may take some time before the majority of investors discover copper for themselves.

However, regardless of which producer or copper project developer one buys, the entry level is currently extremely low, and every somewhat experienced investor knows that triple-digit price gains are much easier to realize from a bombed-out price level than from an advanced price in a boom phase.

Exciting New Copper Presentation Coming Soon

At Goldinvest.de, in view of this expected development in the copper market and the situation in the market for copper explorers, we have been observing some exciting companies for quite some time. These include the Australian American West Metals (WKN A3DE4Y / ASX AW1) with its exciting (DSO) Storm project in Nunavut, Canada, the Canadian Nicola Mining (WKN A3D3LF / TSXV NIM) with its New Craigmont copper project, and also Altiplano Metals (WKN A2JNFG / TSXV APN), which already produces (among other things) a copper concentrate in Chile.

We are currently researching the details of a new, exciting copper play that most investors probably don’t have on their radar yet! We hope to be able to present this new copper story to Goldinvest.de readers very soon.