Global copper demand is projected to grow by 40% to 2040 with demand being driven not only by the global energy transition and digital transformation, but also by other factors.

Speaking in a panel discussion at the London Indaba, on June 24, Anglo American strategy group head Paul Gait explained that continued copper demand is underpinned by aspects such as population growth in the developing world, robust GDP per capita in the developed world and strong demand for copper from both China and developed economies.

He explained that any item that required electricity to function was made up of about 6% copper, thereby illustrating that the metal was not only needed for the just energy transition.

“It’s . . . not quite correct to simply sort of extrapolate and say . . . copper demand is all predicated on the green transition. It's not. There's an awful lot more that underpins that,” he said, describing demand growth for copper as “pretty encouraging”.

Also speaking on the panel, Vedanta Base Metals CEO Chris Griffith highlighted macroeconomic developments that impacted copper demand from traditional applications, such as transport, electrical and construction, noting that copper demand from these sources was expected to increase over the next 25 years from about 30-million tonnes to 46-million tonnes.

“The growth in population supported by our increased purchasing power is going to continue to drive significant copper consumption intensity from traditional sources,” he said.

He noted that additional demand driven by clean energy and new technologies, such as AI or data centres, amounted to about four-million tonnes of copper, which was expected to rise to about ten-million tonnes over the next 25 years.

Griffith pointed out, however, that, while exploration spending on copper had increased in the last ten years, a decline in new copper discoveries and the increasing capital intensity of copper projects remained challenging.

“What we are seeing is that exploration spend is going into brownfield [operations]. So, a lot of the copper companies are putting that exploration spend into assets [where] they have a much greater certainty of success. But we have very little new copper being discovered.”

He estimated that about $75-billion would need to be invested in the exploration of new copper discoveries over the next five years.

Also speaking on the panel, First Quantum Minerals CEO Tristan Pascall reiterated that as finding new sources of copper became more challenging, grades also declined, thereby pushing up the capital cost of projects.