Picture this: you’re driving your shiny new electric SUV, charging it overnight from solar panels on your roof, while in the background giant data centres hum away powering the latest AI models. Feels like the future, right? There’s just one small problem. That future runs on copper — a lot of it — and we’re quietly running out.
I’ve been following commodities for years, and rarely have I seen such a clear mismatch between supply and demand setting up right in front of us. Copper isn’t sexy like gold or dramatic like oil, but it’s the workhorse metal of the modern world. And the numbers are starting to look scary.
The Quiet Crisis Nobody Wants to Fund
Mining companies know there’s a problem. Analysts know there’s a problem. Even governments quietly admit there’s a problem. Yet almost nobody is writing the gigantic cheques needed to fix it.
Think about the last time you heard of a major new copper mine being approved and fully funded. Exactly. It barely happens anymore. Permitting takes a decade or more, local opposition is fierce, costs have ballooned, and ore grades — the amount of copper you actually get out of each tonne of rock — keep falling. The industry has been living off existing mines for far too long.
Meanwhile demand is accelerating in ways most people still haven’t fully grasped.
Electrification Isn’t a Trend — It’s a Revolution
Let’s run through the big drivers, because they add up fast.
- An average electric car uses roughly 80 kg of copper — about three times more than an internal-combustion vehicle.
- Offshore wind farms can require 15 tonnes of copper per megawatt — double that of onshore wind.
- A single large data centre can consume as much power as a medium-sized city, and all that power moves through copper wiring and busbars.
- Grid upgrades alone in the U.S. are estimated to need hundreds of thousands of extra tonnes over the next decade.
Add it all together and forecasts start looking aggressive. Some credible analysts now say global copper demand could hit 43 million tonnes a year by 2035 — that’s almost a 25 % jump from today in just ten years.
To meet that we’d need the equivalent of eight completely new giant mines plus a massive increase in recycled scrap. The catch? Almost none of those mines are even in construction yet.
Why Miners Are Sitting on Their Hands
You’d think skyrocketing future demand would have CEOs throwing money at new projects. In reality most boards remain painfully cautious — and for good reasons.
- Many big copper discoveries were made decades ago; new finds are smaller and in trickier jurisdictions.
- Capital costs for a world-class mine now routinely exceed $8–10 billion.
- Shareholders got burned in the last commodity cycle and now demand dividends and buybacks instead of mega-projects.
- ESG pressure makes financing tough — banks and funds shy away from anything that looks environmentally risky.
- Governments keep raising taxes or threatening nationalisation once projects are built (see Peru, Panama, Chile).
The result? The pipeline of future supply is the thinnest it’s been in a century.
“We are sleepwalking into a supply crisis that could make the 2021–2022 energy shock look mild.”
— Senior commodity strategist at a major investment bank (paraphrased)
Early Warning Signs Are Already Flashing
Copper prices briefly touched all-time highs in 2024, and many traders wrote it off as speculative froth or temporary mine disruptions. But look beneath the surface and the physical market is tightening.
Exchange inventories in London, Shanghai and New York have fallen sharply. Treatment charges — the fees miners pay smelters to process ore — collapsed to near zero in 2024, signalling a shortage of mine supply reaching refineries. Cancelled warrants and queues for physical delivery tell the same story.
In my experience, when these kinds of indicators line up, the real move is still ahead of us.
China Adds a Geopolitical Twist
Here’s the part that keeps me up at night. Roughly half of recent global copper mine investment has come from Chinese companies. Beijing views secure metal supply as a strategic imperative, especially as trade tensions rise.
Western miners, by contrast, face higher funding costs and more regulatory hurdles. The gap is widening. Over the next decade we could see China effectively corner a large part of new supply, leaving Europe and North America scrambling.
That’s not conspiracy thinking — it’s already happening in cobalt and rare earths.
Substitution? Don’t Hold Your Breath
Every bull market spawns talk of alternatives. Aluminium in power lines, fibre optics instead of copper data cable, maybe carbon nanotubes someday. Reality check:
- Aluminium is less conductive and corrodes faster in many applications.
- Fibre replaced copper for long-distance telecom decades ago, but the “last mile” and inside buildings still runs copper.
- Exotic replacements are either too expensive or twenty years away.
Copper remains irreplaceable for the foreseeable future. That’s why engineers keep specifying it even when prices spike.
What Could Change the Equation?
Three scenarios could ease the crunch:
- A deep global recession kills demand growth (possible, but feels like a high price to pay).
- Recycling rates improve dramatically — technically feasible but requires massive new infrastructure investment.
- Policymakers finally wake up and streamline permitting while offering tax incentives for critical minerals.
I wouldn’t bet the house on any of those happening fast enough.
How Investors Can Position Themselves
Pure-play copper exposure remains surprisingly cheap compared to the demand outlook. A basket of quality producers and developers — think companies with long-life assets in stable jurisdictions — looks compelling at today’s valuations.
Royalties and streaming companies offer lower risk (they don’t operate mines but fund them in exchange for future metal). ETFs exist but tend to be diluted with other metals or junior explorers.
Personally, I prefer owning a handful of tier-one names and near-tier-one producers plus one or two carefully chosen developers with projects that could come online before 2030. The asymmetry feels attractive: limited downside if the world economy slows, substantial upside if the supply crunch arrives on schedule.
Whatever route you choose, the key is patience. Commodity cycles can stay irrational longer than most investors stay solvent, but when the fundamentals finally bite, the moves can be explosive.
We’re not quite at the panic stage yet. But the clock is ticking louder every month. When the market finally wakes up to how little new supply is actually coming, the copper price reaction could be one for the history books.
If you’ve ever wanted to ride a genuine structural bull market backed by hard physical constraints rather than hype, this might be it. Just don’t wait for the mainstream financial media to sound the alarm — by then the easy money will already be made.
