BHP expects copper demand to grow by 1 mln metric tons a year until 2035
Sept 30 (Reuters) -Australian miner BHP BHP.AX expects the world to consume an extra 1 million metric tons of copper per year on average until 2035 due to the adoption of copper-intensive technologies, double the annual volume growth in the past 15 years.
Copper has long been used in the construction, transport and power sectors due to its durability, malleability and conductivity. In recent years, it is also used in making electric vehicles, green energy plants, and data centres.
BHP said in a report released on Monday that global copper demand has grown at a 3.1% compound annual growth rate over the last 75 years. But this growth rate has been slowing to only 1.9% over the 15 years to 2021, it said.
"Looking to 2035, however, we expect this growth rate to jump back to 2.6% annually," the report said.
Total copper demand in 2023 was 31 million tons, including 25 million tons of copper cathode and 6 million tons of copper scrap, according to BHP, which operates and owns most of the world's largest copper mine Escondida.
"As we look towards 2050, we see a 70% surge in global copper demand to 50 million tonnes annually, driven by copper's role in existing and emerging technologies, and in the world's decarbonisation aspirations," said BHP Chief Commercial Officer Rag Udd.
The mining giant expects the energy transition sector will account for 23% of copper demand by 2050, from 7% currently, it said in the report.
The digital sector, which spans data centres, 5G, artificial intelligence, internet of things and blockchain, will account for 6% of copper demand by 2050, from 1% now, BHP forecast.
China's demand will continue to grow, albeit at a lower rate, because its copper usage per capita is only half that of developed countries. India will also see growth, it said.
Meanwhile, copper mining output growth is constrained by high costs and depleting ore grade.
"We estimate the average grade of copper mines has declined by around 40% since 1991... We expect between one-third and one-half of global copper supply to face grade decline and ageing challenges over the next decade," BHP added.
The total bill for all expansion capex from 2025–2034 is seen reaching around $250 billion, a significant increase from the previous 10 years, when the total spend on copper projects was approximately $150 billion, BHP said.
Reporting by Mai Nguyen in Hanoi; Editing by Alexander Smith
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
