Copper plays a crucial role in the energy transition as its high electrical conductivity makes it indispensable in wind turbines, solar panels, EVs, and electric grids. As the world shifts toward greener technologies and increased electrification, the demand for copper is growing rapidly. Electric vehicles (EVs), for example, use up to four times as much copper as traditional vehicles, while 1MW of solar and wind use 2-3 times and 5-8 times more copper, respectively, than producing 1 MW of energy from a coal or gas fired power station. Solar power uses approximately 5.5 tonnes of copper per MW, while onshore and offshore wind use around 3.5 tonnes and 9.6 tonnes of copper per MW respectively. According to BloombergNEF’s annual Transition Metals Outlook, the copper industry will need USD 2.1 trillion investment by 2050 to meet the raw materials demand of a net-zero world.

Copper is concentrated in a few key countries with significant resources in the ground. Chile holds the world's largest copper reserves, followed by the Democratic Republic of Congo (DRC), Peru, China, the United States, Indonesia, Australia, Canada, Zambia, Poland, Kazakhstan and Mexico. As demand for copper continues to rise, these countries are set to play a central role in supporting the global shift to cleaner energy technologies. Internal developments within these key copper producing countries have an impact on the supply and therefore price of copper. Chile, for example, has introduced stricter environmental policies and higher labour costs, while protests and social unrest in Peru has led to suspensions and delays in copper production, threatening the stability of the country's copper supply chain and creating volatility in copper prices. Meanwhile mining labour strikes and increased operating costs in Australia have contributed to production slowdowns, which have also impacted the global supply of copper.

Copper is typically found in two main mineral forms: copper oxides and copper sulphides.

• Copper oxides are nearer the surface and are generally processed using hydrometallurgy, especially heap leaching, followed by solvent extraction and electrowinning. This method dissolves the copper from the ore using acid and then plates it onto cathodes as nearly pure copper. This is often done locally, in the country where the copper was mined.
• Copper sulphides, on the other hand, represent around 90% of copper supply and are found deeper underground and require pyrometallurgy. First, the ore is concentrated through crushing, grinding, and flotation to produce a high-grade concentrate. This concentrate is then smelted and refined at high temperatures to extract the copper metal. Copper concentrates are typically exported to be smelted overseas (some to Japan, but mostly to China, however some copper mining companies in Chile are looking to diversify their export risk by exporting more to India). After smelting, the copper anode produced is refined to produce high purity copper cathode. 

Each process is tailored to the ore type, but both aim to produce copper at a purity level high enough for industrial use, particularly for the electrical and energy sectors.

Copper recycling will play a vital role in supporting a more sustainable energy transition, using up to 85% less energy than primary production and avoiding many of the environmental impacts of mining. Today, recycled copper supplies about one-third of global demand, recovered from old wiring, electronics, and infrastructure. However, because copper is often locked in long-life assets like buildings and power grids for decades, and because global demand is set to double by 2050, recycling alone will not come close to meeting future needs. While scaling up recycling is essential, responsible mining will still be critical to bridge a large gap and meet the materials needs of a low-carbon future.

Global politics has recently been impacting the copper market in various ways further downstream. Ongoing trade tensions between the U.S. and China have had a ripple effect on the copper market. The threat of tariffs and export restrictions has created uncertainty in the global copper trade, affecting supply flows and pricing. In particular, China’s dominance in copper consumption and processing has meant that any disruptions in trade relations can send shockwaves through the copper supply chain, impacting prices and availability. The relentless subsidised construction of additional copper smelting and refining capacity (required to convert copper concentrate from copper sulphide into a finished copper product) in China has meant that copper concentrate treatment charges are now well below cost in most smelters, putting the continued viability of copper smelting in regions without government subsidisation at risk. The global excess in smelting capacity has been exacerbated by copper mining nations, such as Indonesia, Kazakhstan and the DRC, demanding more local processing of copper concentrates, often through the banning of or placing of tariffs on copper concentrate exports or through government subsidisation. Additionally, other growing jurisdictions such as India and the Middle East are also adding further smelting and refining capacity to guarantee copper availability to support their own energy transitions by securing local downstream critical metals. China remains the world’s largest consumer of copper, and its continuously increasing focus on building out its green infrastructure has led to higher demand for the metal, which has to date driven up prices and increased geopolitical tensions over access to supply of copper concentrates. Although Russia is not a major copper producer, the Russia-Ukraine war impacted the price of sulphuric acid which in turn has impacted the viability of copper oxide leaching operations elsewhere in the world. The threat by the Trump Administration to place a 25% tariff on copper imports into the USA has also created a significant margin between copper prices traded on the London Metal Exchange (LME) and on the US Commodity Exchange (Comex). U.S. copper futures have surged, with prices reaching up to USD 5.02 per pound last month, a 26% increase this year, outpacing global prices. This has led to a rush of copper imports into the U.S., causing a significant increase in physical deliveries. This is creating distortions in the usual economics around supply and demand, with the mining and smelting industry in the USA uncertain as to whether long term investment decisions can be based upon potentially short-term tariff protection.

Given copper’s central role in energy infrastructure, from renewable power generation to electric vehicle manufacturing to energy and infrastructure for Artificial Intelligence, stakeholders across the energy sector must closely monitor geopolitical developments affecting copper supply. Concentrated reserves, potential trade restrictions, and shifting global alliances can all impact availability, pricing, and project timelines. Staying attuned to these dynamics is critical for managing risk, securing supply chains, and ensuring the success of long-term energy transition goals.