KEY POINTS
- Global copper demand is set to outpace supply by 2035.
- Companies reopen closed mines to speed up copper production.
- Indigenous groups play a growing role in copper mining ownership.
Many businesses are reopening closed mines to boost supply as demand for copper is driven by the renewable energy transition and artificial intelligence.
Copper demand surges for clean energy and AI needs
Data centres, renewable energy, and electric cars all depend on copper, and by 2035, demand is predicted to outpace supply by 1.7%. This year, copper prices have already reached all-time highs.
It usually takes up to $5 billion and at least ten years to start new copper mines. However, businesses intend to increase production by reactivating older locations. In addition to the 30 million tonnes anticipated by 2031, a Reuters study of four idled copper mines in the restart process indicates that they might contribute an additional 7 million metric tonnes to the world supply over the next five years.
According to Daniel Bornstein, a partner at McCarthy Tetrault, which provides mine rehabilitation advice, rehabilitating ancient mines “taps into investor sentiment that it is going to be easier, and it is easier.”
Indigenous ownership and community considerations reshape mining sector
As an illustration, consider the Selkirk First Nation in Canada, which purchased the Minto mine in Yukon following its closure last year. Prior to its closure, the mine, which is currently among the first Indigenous-owned mines in Canadian history, produced 226,000 tonnes of copper. Restarting the mine will take two years, and continued financial negotiations are necessary.
In other news, Nevada Copper Corp., currently controlled by private equity firm Kinterra Capital, is scheduled to resume operations at its Pumpkin Hollow mine after coming out of bankruptcy this year, while Doré Copper Mining, which was recently purchased by Cygnus Metals, intends to revive a site in Quebec that was last used in 2008.
With a projected production of 3.5 million tonnes, Nevada Copper’s project consists of both open-pit and underground operations, mining,com reported. Kamal Toor of Kinterra stated, “We see long-term value in the open-pit project,” and he expects production to begin by the end of this decade.
Supported by off-take agreements with Trafigura and Boliden, Toronto-based Denarius Metals intends to resurrect the Aguablanca nickel-copper project in Spain to produce 90 tonnes of concentrate by the end of next year.
But there are still difficulties. According to Rob McLeod, CEO of Nations Royalty, these projects may become more difficult due to changes in commodity pricing, smelter fees, and a lack of experienced workers. Potential roadblocks include local resistance and Indigenous community concerns, which means businesses need to forge closer ties with the community.
