According to the major US bank J.P. Morgan, structural supply gaps and significantly increased capital costs are likely to drive the copper price higher in the coming years than previously expected. Accordingly, the bank’s analysts have raised their long-term forecast for the copper price by 9.1%.
For the next decade, J.P. Morgan now expects an average of $12,000 per tonne (equivalent to $5.50 per pound or approximately 16,320 Canadian dollars per tonne)—the previous target was $11,000 per tonne.
The reasoning: After years of comparatively low investment, long permitting processes, and declining ore grades, it is becoming increasingly difficult to bring new mine capacity online in time. From the bank’s perspective, this forces the market toward higher prices—not due to short-term speculation, but because new projects are hardly economically viable without a higher price level.
Copper Price and Supply Gap: Deficits Expected to Be Significantly Larger by 2035
J.P. Morgan expects the global market to move noticeably toward a deficit over the course of the decade. The bank estimates that the undersupply could grow to approximately 2 million tonnes by 2030 and even reach up to 8 million tonnes by 2035. A central factor is time: According to estimates by BHP, it now takes an average of around 17 years to bring a copper project from discovery to full production—in 2000, it was still about 10 years.
Furthermore, new production is becoming more expensive. J.P. Morgan explicitly links the copper price forecast to rising investment costs and the question of what returns investors demand for large-scale projects. Many future projects would therefore require copper prices above $12,000 per tonne to achieve an internal rate of return of around 15%. This is less a precise target and more an indication of where the bank sees the “pain threshold” for new supply.
This assessment aligns with industry warnings highlighted in the note: Rio Tinto and BHP expect a demand increase of more than 70% by 2050. This would increase the requirement for refined copper to approximately 55 million tonnes—a scale that many market observers believe can only be met with a massive expansion of mining capacity.
$150 Billion in Investment: Why New Mines Require So Much Capital
To bridge the gap, J.P. Morgan sees a significant need for investment. The bank quantifies the necessary capital expenditure at around $150 billion to advance more than 30 major copper projects (greenfield and brownfield) worldwide. Together, these projects represent approximately 5 million tonnes of new annual capacity.
At the same time, the construction of new mines is becoming significantly more expensive. J.P. Morgan now estimates the costs of new projects at approximately $27,000 per tonne of annual capacity—an increase of 30% compared to 2020. For greenfield developments, values are often above $30,000 per tonne, and for individual projects, cost inflation since 2020 is even cited at nearly 50%. In an environment where a large portion of budgets is already tied up in maintaining existing operations, competition for capital could further increase, according to the bank.
J.P. Morgan highlights Argentina as a particular growth region on the supply side, describing the country as the “next great copper frontier.” Analysts point to Javier Milei’s victory in last year’s midterm elections, which could solidify market-oriented reforms and support foreign direct investment. Projects mentioned include Los Azules by McEwen Mining, Mara and El Pachón by Glencore, and the Vicuña joint venture between BHP and Lundin Mining.
Demand Drives the Copper Price: Energy Transition, E-Mobility, and Data Centers
On the demand side, J.P. Morgan expects global copper consumption to grow by about 3% per year until the end of the decade—even if momentum in China should slow down. The drivers are electrification, renewable energies, electric vehicles, and the rapid expansion of AI and data center infrastructure.
The bank’s forecast for the digital sector is particularly striking: Copper demand from data centers could quadruple by 2030—to nearly 1 million tonnes per year. For AI-related power capacities, J.P. Morgan also cites a range of 20 to 40 tonnes of copper per megawatt. Thus, the bank links the copper price not only to traditional industrial demand but also to the physical foundation of digitalization.
Short-term disruptions have also already increased market tension. J.P. Morgan points to supply interruptions—including a landslide at Freeport-McMoRan’s Grasberg mine in Indonesia. Overall, outages of around 800,000 tonnes per year in 2025 and 2026 are said to have shifted the market from a moderate surplus into a deficit earlier than expected, thereby accelerating the onset of structural bottlenecks.
As a consequence, J.P. Morgan remains focused on major copper producers and equipment suppliers in its industry positioning, naming Antofagasta and First Quantum Minerals, among others. From the bank’s perspective, however, the decisive factor is less the short-term market sentiment than the central message behind the forecast: If new mines become significantly more expensive and take longer, a higher copper price must incentivize investment—otherwise, a prolonged period of tight markets looms.
This makes the discovery of new copper deposits all the more important, which the industry giants often leave to small exploration companies. These include, for example, the Canadian Algo Grande Copper (WKN A41UK1 / TSXV ALGR) with its Adelita project. Only recently, the company, which incidentally also uses AI for exploration, was able to report its first promising drill results of up to 4.1% copper.
Also exciting is the massive Thorn project from Brixton Metals (WKN A1J09P / TSXV BBB), featuring several copper deposits that the company, led by CEO Gary Thompson, intends to further advance this year.
We will, of course, keep our readers informed.
