GLOBAL NEWS •
NAVIGATING THE CURRENTS :
THE EVOLVING LANDSCAPE OF COPPER IN A SUSTAINABLE WORLD
Global news
Unsplash | Ra Dragon Supplied by BDO , South Africa
As the global energy landscape undergoes a transformative shift towards sustainability , copper is emerging as a linchpin in the transition from hydrocarbon-based production systems to diverse and eco-friendly alternatives , writes Dorcas Nhlapo from BDO South Africa .
In this era of evolving energy dynamics , the significance of copper as a cost-effective and efficient conductive material used in capturing , storing and transporting new sources of energy is more pronounced than ever . This is reflected in current trends and predictions for the metal .
The recent PwC Mine Report for 2023 sheds light on the pivotal role copper plays in the mining industry . According to the report , 66 % of deals in the mining sector last year were centred around critical minerals , with copper dominating at 85 %. This , together with a global capital market estimated at USD453.76-million and a projected growth rate of 5.1 % by 2030 , means the copper market is positioned for substantial expansion going forward .
The driving forces behind this surge in demand are diverse , encompassing industries such as construction , electrical and electronics , automotive , and consumer goods . The trajectory of global copper mine production further supports this trend , with an anticipated average annual growth rate of 3.2 % from 2023 to 2032 , and annual output rising from 22.6mnt in 2023 to 29.2mnt by 2032 .
BDO South Africa senior audit manager , Dorcas Nhlapo .
Copper : the new oil ? In 2022 , Goldman Sachs described copper as " the new oil ," underscoring its centrality to the low-carbon transition . However , this designation also raises concerns about the potentially divisive role copper may play in the global economy . The Environmental , Social , and Governance ( ESG ) question comes to the forefront here , as the increasing demand for copper may challenge nations to prioritise market dominance over responsible production .
S & P analysis paints a potentially troubling scenario , suggesting a looming 9.9 million-tonne shortfall in copper supply by 2035 , akin to the 20th-century scramble for oil . The fear is that copper scarcity could destabilise international security , raising questions about the compromises nations may make on ESG principles in pursuit of securing their copper supply .
Global supply chain challenges Examining the reserves and geographical locations of copper mining , it becomes evident that major producers still heavily rely on imports . China , for instance , imported USD52.4-billion worth of copper ore in 2021 , and the US , at best , will still import 57 % of its refined copper by 2035 , according to S & P anaylsis .
The copper value chain spans the globe , with geopolitical tensions and competing regulatory regimes adding complexity to the supply chain . This fragmentation may burden supply chain operators , diverting resources from responsible production and compliance with ESG principles .
The growing environmental footprint of increased copper demand poses another challenge . The International Finance Corporation ' s Net Zero Roadmap for Copper warns that without mitigation measures , greenhouse gas emissions from copper production alone could double by 2050 .
Africa ' s role in the copper industry As the demand for copper intensifies globally , Africa finds itself at a crossroads . Despite being home to key copper producers like Zambia and South Africa , the continent remains on the periphery of the global copper supply and demand chain — with four of the five leading companies in the copper market ( Anglo American ,
The fear is that copper scarcity could destabilise international security . www . africanmining . co . za African Mining Publication African Mining African Mining • March 2024 • 7