The Elements of Innovation Discovered
The Elements of Innovation Discovered
Metal Tech News - February 6, 2023
The transition from fossil fuel to renewable energy means that much more global energy will be delivered by copper cables.
Renewable energy, EVs, and the enlarged net-zero-emissions power grid in between is driving enormous copper demand.
Copper is essential to a global economy that favors low-carbon electricity powerlines over fossil fuel-filled pipelines to deliver future energy needs. But does the green energy demand make the red metal critical?
So far, copper has not been elevated to the official list of minerals and metals deemed critical to the United States. A surprisingly broad spectrum of politicians and advocacy groups, however, have joined the Copper Development Association Inc. (CDA) in pushing the federal government to immediately elevate the conductive metal to America's critical minerals list.
"Copper is and always has been critical to our economic and national security but now to the clean energy transition as well," said Copper Development Association President Andrew Kireta, Jr.
When calculating the quantity of metals required to build the low-carbon energy future, the World Bank estimated in 2019 that roughly 550 million tons of copper are needed over 25 years, which is roughly equivalent to all copper that has been mined over the 5,000 years since the dawn of the Bronze Age.
This nearly unimaginable demand for copper needed by the mid-2040s is due to renewable energy and electric vehicles needing much more copper than their fossil fuel-burning forebearers, coupled with the green energy future requiring more electricity be generated and delivered.
Demand, however, is not the most important factor at play when determining which mined commodities make the U.S. critical minerals list. It is the risk that America would not be able to meet that demand, either through domestic production or reliable imports, that weighs more heavily on criticality.
While the U.S. Geological Survey, which is charged with assembling and updating the critical minerals list, agrees that the clean energy transition is demanding much more copper, its 2021 calculations showed that supply risks were not at a level to deem the red metal as critical.
Based on its own calculations using USGS methodology, however, the CDA says copper has hit the "critical" echelon and is calling on its immediate inclusion on the list of 50 minerals and metals deemed critical to the U.S.
Many professionals in both the renewable energy and mining sectors were surprised that copper did not make the 2022 critical minerals list that included newcomer industrial metals nickel and zinc.
USGS says copper's exclusion is simply the product of a formula created to provide a non-biased calculation of the supply risk of any given mineral or metal through analysis of economic vulnerability, supply disruption potential, and trade exposure.
While CDA does not disagree with the USGS methodology or even the output of this formula when it comes to copper, the association says the 2018 inputs for the copper criticality calculation are outdated and do not take into account an enormous shift in demand and supply risks over the past four years.
The USGS Mineral Commodity Summaries 2023, which was published on Feb. 3, backs CDA's assertions. According to this latest report, the U.S. copper import dependency has climbed from 33% in 2018 to 41% in 2022.
"Because USGS data was considerably out of date upon the release of the 2022 Critical Minerals List, and the risks to copper from imports has increased dramatically, we engaged an analyst to update copper's supply risk score with the most recently available data to 2022," said Kireta.
This analysis using USGS methodology shows that copper should be considered critical to the U.S.
"As copper now meets the threshold for inclusion based on the very latest available data, we need to act immediately to enable the copper industry to provide the essential inputs that copper provides to our national defense and economic security," Kireta said.
CDA's efforts to raise copper's criticality in the U.S. is being backed by a large and widely diverse coalition of industry leaders and policymakers.
A group of 75 associations and unions that include the Electric School Bus Coalition, National Mining Association, United Association of Plumbers and Pipefitters, U.S. Chamber of Commerce, and Zero Emission Transportation Association did not mince words in their support of adding copper to the U.S. critical minerals list.
"We, the undersigned users, consumers, partners and supporters of the copper industry write to urge you to formally designate copper as an official USGS Critical Mineral without delay," the coalition penned in a Feb. 2 letter to U.S. Secretary of Interior Deb Haaland.
The group said the increased risk identified by CDA indicates that the USGS, which falls under Haaland's Department of Interior, should recalculate copper's risk and elevate the criticality of the metal.
"Given copper's major role in state and national economic development, national security, and infrastructure, we strongly reiterate our recommendation that copper be immediately included in the USGS list of 'critical minerals,'" the group of trade associations, businesses, and unions wrote.
"By recognizing copper as a 'critical mineral,' the United States' federal government can more effectively ensure a secure and reliable supply of domestic copper resources in the years to come," the coalition added.
Six U.S. senators – Kyrsten Sinema (I- AZ), Mike Braun (R-IN), Mark Kelly (D-AZ), Joe Manchin (D-WV), Mitt Romney (R-UT), and Raphael Warnock (D-GA) – were equally emphatic that the USGS reexamine copper's criticality.
In their own letter to Haaland, the senators pointed to a recent S&P Global report that forecasts a "chronic gap between worldwide copper supply and demand projected to begin in the middle of this decade will have serious consequences across the global economy and will affect the timing of Net-Zero Emissions by 2050".
This follows a similar "Copper is the new oil" report published by Goldman Sachs' in 2021.
"As we have long argued, moving the global economy toward net zero emissions remains a core driver of the structural bull market in commodities demand, in which green metals – copper in particular – are critical," Goldman Sachs Commodities Research analysts penned in the report.
On top of rapidly increasing demand being driven by the transition to EVs and renewable energy, the senators argue that rising geopolitical tensions and increased competition for the copper in an electric-centric world adds significantly to the risk side of the equation.
"(W)e now have better data on future supply and demand projections – all of which has made reconsideration of copper for inclusion on the critical mineral list a necessity," the senators inked in their letter.
The six lawmakers said a critical designation for copper will position them better to ensure America has the copper needed for the green energy future.
"By recognizing copper as a 'critical mineral,' the United States' federal government can more effectively ensure a secure and reliable supply of domestic copper resources in the years to come at all points of the supply chain including recycling, mining, and processing, the senators wrote in the letter to Haaland.
"Given the enormous investment required, the time lag for new sources of supply, and projected demand, time is of the essence," they added.
With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.
Reader Comments(1)
Eidolon writes:
So, first I wonder, where the heck are Murkowski and Sullivan and why aren't they signing this letter? Using the parameters given above for estimated future copper demand (550M tons in 25 years) and applying that to an average production grade of 0.2% copper, I come up with a minimum of 275 billion tons of ore. That's a very tall order. Hello, Pebble?
02/08/2023, 5:58 am