Coining it with copper
Renowned economist Dawie Roodt said demand for copper is set to rise significantly with the increased popularity of solar power, electric vehicles, and other fossil-fuel alternatives.
Roodt said copper would play a crucial role in moving to a green economy, which governments globally demand.
He said countries with copper reserves, like South Africa, are set to benefit from the energy shift as copper prices are set to rise steeply.
“It is very clear that there is going to be a mismatch between the supply of copper and the demand for the metal,” Roodt said.
“There are likely to be significant copper shortages globally based on the current trajectory,” he said.
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.
In comparison, 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.
To satisfy demand, mining companies are increasing their exposure to the metal. For example, Glencore is set to open a large copper mine in Argentina.
Another thing counting in favour of existing copper producers is 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.
Although South Africa is not a major global copper producer, it has large copper mines, including Palabora, Mogalakwena, Nkomati, Rustenburg Complex, and Bafokeng-Rasimone.
Roodt said South Africa could capitalise on the growth in copper demand and rising prices. “We have to grab this opportunity,” he said.