BAKU, Azerbaijan, October 21. More than $23 million worth of annual investments is needed in launching new copper projects under an accelerated energy transition scenario by 2050, Wood Mackenzie, a global research and consultancy group, forecasts, Trend reports via WoodMac.
The analysis shows that, within 10 years, 9.7 million tons of new copper supplies will be needed from projects that have not yet been approved, equivalent to almost one third of the industry’s current refined copper consumption if the industry is to meet the Paris Climate Agreement targets.
Meanwhile, it is expected to produce approximately 17 million tons of copper annually – nearly double the volume required to limit warming to 1.5 °C, the report said.
At the same time, as WoodMac noted, “in reality, some of these projects have not been developed because of poor economics, and even those that can offer an attractive return on investment have other hurdles to overcome prior to development”.
As WoodMac experts expect, in theory, increased copper prices should encourage project approval and supply boost.
“However, the conditions for delivering projects are challenging, with political, social, and environmental hurdles higher than ever. For example, social and environmental licenses to operate are proving elusive in major producing countries, including Chile and Peru,” one of the experts explained.
Under the abovementioned scenario, the price of copper required to meet demand would rise significantly to $9,370 per ton in constant dollar terms for 2022, compared with $7,716 per ton in the base case. In theory, this increase in prices would be sufficient to close the supply gap and maintain market equilibrium.
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