Copper exchange inventories rose above 1 million tonnes for the first time in 21 years. Meanwhile, refinery activity has slowed, with Chinese demand softening, yet prices remain high despite a rebound from January highs.
The answer is a lack of confidence in long-term supply. The market has entered an era of power intensity. Therefore, copper is no longer just a cyclical industrial input but a fundamental infrastructure for the 21st century economy.
At the recent BMO International Mining Conference, Teck Resources Ltd.’s (NYSE:TECK) CEO Jonathan Price Copper frame in the “heart of electricity.” He pointed to three structural drivers that are changing demand: electrification, digital infrastructure, and rapid urbanization.
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Electric vehicles require nearly 4 times as much copper as internal combustion vehicles. Solar farms, wind turbines, and the expanding grid that connects them are more than copper. At the same time, hyperscale data centers, the physical backbone of AI and cloud computing, are being developed at an unprecedented pace.
According to Mining Weekly, Price warned, “There is an emerging disconnect between the lead time to bring in new mine supply versus the main demand drivers.” He explained that a new data center can be built in as little as 9 months, while a new mine can take up to 20 years.
Big miners are responding with scale and focus. Tech joins $53 billion Anglo American plc (OTCQX:AAUKF) will create “Anglo Tech,” is a top five global copper producer with over 70% exposure to the metal.
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Others double organically. Failure to obtain Anglo-American, BHP Group Limited (NYSE:BHP) prioritizes growth Escondida, Pampa Norteand d Vicuna project instead of pursuing a major acquisition.
Rio Tinto Plc (NYSE:RIO) has allocated 85% of its exploration budget to copper, which d Oyo Tolgoi Development in Mongolia Glencore Plc (OTCPK: GLCNF ) expands in DRC, targets 300,000 tons per year Kamoto Copper Company and indicates plans to nearly double production over the next decade.
Supply-side numbers are tightening as existing mines face rising capex to maintain current production. According to Kitco, the experienced investor Rick’s Law This figure will reach 250 billion dollars in the next ten years. Thus, the focus shifted to emerging markets.
