KEY POINTS
- BHP projects copper demand to grow by 1 million tonnes annually until 2035.
- Energy transition and digital sectors are expected to significantly drive copper demand growth by 2050.
- The company estimates that $250 billion in investment is needed to address supply challenges.
BHP (ASX, NYSE: BHP) expects global copper demand to grow by an additional 1 million tonnes annually on average until 2035, driven largely by the adoption of copper-intensive technologies. The mining giant’s latest report highlights an uptick in demand, doubling the growth rate seen over the past 15 years.
Rising copper demand and projections
According to BHP’s projections, global copper consumption has grown at a compound annual rate of 3.1 percent over the past 75 years. According to Mining.com, that rate slowed to 1.9 percent during the 15 years leading up to 2021. Looking ahead, the company anticipates this growth rate to rise to 2.6 percent annually by 2035.
In 2023, total copper demand reached 31 million tonnes, consisting of 25 million tonnes of copper cathode and 6 million tonnes of copper scrap. BHP’s chief commercial officer, Rag Udd, indicated that by 2050, global copper demand could increase by 70 percent to reach 50 million tonnes annually, driven by the increasing role of copper in emerging technologies and global decarbonization efforts.
The energy transition is anticipated to become a significant driver of this demand. BHP estimates that by 2050, the energy transition sector will account for 23 percent of copper demand, up from 7 percent today. Additionally, the digital sector, encompassing data centers, 5G, AI, and IoT, is projected to increase its share from 1 percent to 6 percent over the same period.
Regional demand trends
As electric vehicles (EVs) become more widespread, BHP predicts that copper demand from the transport sector will rise significantly—from 11 percent of total demand in 2021 to over 20 percent by 2040.
Furthermore, global electricity consumption for data centers is expected to increase from 2 percent today to 9 percent by 2050, pushing copper demand in this segment up sixfold.
China’s demand for copper is expected to grow but at a slower rate. Currently, China’s copper consumption per capita is around half that of developed countries.
India, on the other hand, is poised for more substantial growth. BHP noted that India’s electricity consumption per capita is currently about one-seventh of Japan’s and one-fifth of China’s, suggesting significant room for copper demand expansion as electricity becomes more accessible across the country.
Supply challenges and investment needs
On the supply side, the copper mining industry faces growing challenges. BHP highlighted that the average copper mine grade has decreased by approximately 40 percent since 1991.
In the coming decade, between one-third and one-half of global copper supply is expected to encounter grade decline and aging issues.
To meet rising demand, BHP estimates that $250 billion in investment will be required over the next decade to bridge the widening gap between copper supply and demand.
