Reducing emissions from human activity requires a great deal of effort in many different sectors. When it comes to land transport, the idea is generally to eliminate vehicles powered by combustion engines and replace them with electric vehicles instead. At a glance, the job is simple enough. We know how to build EVs, and the technology is getting to the point where they’re capable of replacing traditional vehicles in many applications.
Of course, the reality is not so simple. To understand the problem of converting transportation to electric drive en masse, you have to take a look at the big numbers. Focus in on the metrics of copper, and you’ll find the story is a concerning one.
Raw Materials Are Key
Switching over to EVs isn’t just as simple as drawing up the blueprints for new models and churning them out. Unfortunately, the world’s industrial infrastructure has been built up and honed over the last century or so to build enough cars, trucks, and buses to suit the world’s demands, give or take some wobbles with supply chains in the last few years. There are sprawling factories located all over the world, dedicated solely to the tasks of churning out engines, fuel systems, and chassis for these vehicles, numbering in the millions each year.
As of yet, there aren’t enough factories to churn out motors, battery packs, and ancilliary hardware to replace all those combustion drivetrains. That’s assuming that the world’s existing body plants could build enough EV-ready chassis in the first place. Worsening the problem, we simply aren’t digging up enough raw materials to feed these non-existent factories in the first place.
Foremost amongst the materials that we lack is copper. As an excellent conductor, it’s a fundamental ingredient in everything electrical and electronic. When it comes to electric vehicles, where efficiency is paramount, it’s often not practical to replace it with other conductors like aluminium, either.
In fact, a modern EV requires approximately twice as much copper as a traditional combustion-engined vehicle. Thus, if we want to eventually have the entire car industry only building electric vehicles, that’s going to up the car industry’s copper demands by 150%.
It’s not just EVs that are increasing the demand for copper, either. EV chargers also require plenty of copper, too. Add in the demands from the renewable energy sector, for things like solar panels and wind turbines to run those chargers, and the figure gets ever larger.
Analytics firm S&P Global pegs worldwide copper demand to double by 2035. The increase will continue towards 2050, with projections suggesting a world demand of 53 million metric tons . The company’s report bases these figures on the amount of copper required for countries to achieve existing net-zero emissions targets. At best, the company predicts minor deficits in copper supplies in coming decades, assuming mining operations ramp up their efforts and recycling is pursued in earnest.
According to the US Geological Survey, the total amount of discovered copper on Earth is in the realm of 2.8 billion metric tons. Estimates suggest there’s another 3.5 billion metric tons of copper out there somewhere still waiting for us to find it. That’s plenty to serve us well into the future, but first it needs to be dug out of the ground and processed into usable material.
Currently, the world’s biggest producer of copper is Chile, putting out 5.7 million tons in 2020, with that number largely remaining stable over the last few years of reporting. The country hosts most of the largest copper mines in the world. Peru and China come in second and third place, producing 2.2 million tons and 1.7 million tons respectively. With 40% of copper output coming from Chile and Peru alone, sources of copper are relatively highly concentrated compared to other materials on the market.
In order to bump up production, new mines will have to be established and existing ones expanded. Of course, for mining companies to act, first these other sources of copper must look profitable on paper. As it stands, discoveries of new deposits have been few and far between, of late, and they’ve been of lower grades that are less attractive to mine, financially speaking. As per the way the world commodities market tends to work, we will likely see copper prices spike as shortages bite, before miners rush in to develop new copper deposits that are now profitable to work with.
As it stands, legislation has passed in several jurisdictions to ban combustion-engined vehicles and force a switch to EVs. Similarly, there’s huge pent-up demand for new renewable energy projects, particularly after this year’s spikes in fossil fuel prices amidst disrupted supplies. Copper demand isn’t going anywhere, so sooner or later, the world will have to get digging, and fast. If I owned a mining company, I’d want to get a head start.