Concerns about global warming and climate change have fuelled the move away from using fossil fuels to generate energy toward renewable energy sources.
Governments and policymakers have imposed strict policies penalising companies and individuals for using fossil fuels.
It includes large taxes and levies on carbon emissions and prohibiting fossil fuel exploration and extraction financing.
These pressures have created large incentives to move away from fossil fuel energy sources and reduce carbon emissions.
However, renewable energy sources depend on commodities, especially metals. One metal of particular importance is copper due to its high conductive abilities.
To put the increased demand for copper into perspective, it is valuable to consider the amount of copper needed for different energy generation methods.
To generate 1MW of power, coal and nuclear thermal power stations require approximately 1 tonne of copper.
Solar power plants require 5.5 tonnes of copper, and onshore wind farms require 4.3 tonnes of copper.
The same goes for electric vehicles (EVs). According to BHP Group, EVs require four times more copper than standard combustion engine cars.
The increasing green energy pressures from governments have created a huge demand for copper.
To satisfy demand, mining companies are increasing their exposure to the metal.
For example, Glencore is making moves to open a large copper mine in Argentina to capitalise on the growing demand.
Many analysts estimate that the price of copper will significantly increase as the demand continues to rise.
However, there are significant risks related to more copper extraction.
Although the finished products are “clean,” the processes of building renewable energy sources are far from it.
Mining copper requires heavy machinery run on fossil fuels to open large earth volumes. They often dig deeper than the water table.
Metals can leak into wide-connected water tables, making them toxic and dramatically affecting ecosystems.
Copper refinement also produces high levels of pollution as they are melted with oil, coal, or natural gas furnaces that produce large amounts of greenhouse gases.
Renewable energy is estimated to cover only 26% of the global energy demand. To get closer to net zero, a lot more copper, nickel, cobalt, and lithium would have to be mined.
An S&P Global study found that the bulk of increased copper volumes come from mines discovered in the nineties.
In the past five years, only three copper mines were discovered, contributing only five metric tonnes of copper.
The rate at which recent copper mines were discovered was also lower with smaller deposits.
It is, therefore, not far-fetched to think that the environmental damage caused by ramped-up copper exploration and mining would be more than the benefit of solar and wind power.