Global demand for renewable energy is sparking a bull market for copper — a crucial component for green energy, including solar, wind, hydro-power and electric vehicles. For example, roughly three times more copper is used in an electric vehicle (EV) than in a conventional-gas powered vehicle. By 2035, Bloomberg projects 43% penetration just in the light-duty vehicle market, which would equate to about 110 million cars, as reported by Mining.com. To meet that demand, the market would need up to 3.6 million extra tons of copper, equal to 15% of the current market. As that demand grows, copper companies are racing to discover new sources of supply. Several legitimate players that are taking advantage of growing demand for copper include District Copper Corporation (TSX:DCOP)(OTC:CAXPF), Southern Copper Corporation (NYSE:SCCO), Freeport-McMoRan (NYSE:FCX), Glencore (LSE:GLEN)(OTC:GLNCY) and BHP Billiton Ltd. (NYSE:BHP).
Whether it be District Copper Corporation’s Eaglehead project in northern British Columbia, or Southern Copper Corporation’s $2.5 billion Michiquillay project in Peru, copper companies are just beginning to attract a significant amount of investor attention with potential new copper supply.
The Bull Market in Copper Had Only Just Begun
As the world just begins its transition to renewable energy, copper will remain under heavy demand. In fact, many green energy systems require more copper than traditional energy sources. Photovoltaic (PV) solar cells, for example, can use up to 5.5 tons per megawatt (MW). Grid energy installations need between three tons and four tons per MW. Even a single wind farm can use as much as 15 million pounds of copper.
However, while there’s plenty of demand for copper, there are supply issues mounting with analysts projecting a supply crunch sooner than expected. According to Copper Fox Metals CEO Elmer Stewart, as quoted by InvestingNews.com notes, “We’re expecting a significant supply deficit to develop within the next year. This deficit is due to two main factors: a lack of advanced-stage projects due to low copper prices; and the expected increase in demand as demonstrated by the 23 million tonnes consumed in 2017. At a conservative growth rate of 2 percent, approximately 460,000 tonnes of new copper has to be produced in 2018. A study group has forecasted that by 2027 a minimum 4.6 million tonnes of additional copper will be required to meet the market demand. This doesn’t take into account the additional copper demand expected from the “green revolution.”
With that, copper companies are racing to provide supply. For example, District Copper Corporation offers investors an intriguing opportunity with its Eaglehead project. Located in northwest British Columbia, a preliminary estimate performed in 2012 showed an inferred resource containing 102.5 million tons of copper. However, analysts believe it could be substantially larger than that figure.
Even Nevada Copper for example is ramping up production with its Pumpkin Hollow project that could produce 60 million pounds of copper in its first five years of operations.
District Copper Corporation: Leading the Charge
Sitting in a proven mineral district, District Copper’s Eaglehead property is one of the most advanced, district-scale discoveries in northwestern British Columbia, hosting an NI 43-101 Inferred Mineral Resource estimated to total 102.5 million tonnes at an average grade of 0.29% copper, 0.010% Molybdenum and 0.08 g/t gold.
The region is also home to infrastructure, including road access, electrical power and accessible seaport facilities that make the project even more valuable.
Recent work has “considerably advanced our understanding and demonstrates the potential of the Eaglehead project to host a large, polymetallic porphyry copper deposit. The presence of a large, relatively untested porphyry system combined with the two recently identified exploration targets expands the exploration target and supports our interpretation of the project’s potential. The next step for District Copper is to prepare an exploration program designed to significantly advance the project in 2018,” noted Jevin Werbes, President of District Copper Corporation.
With increased demand in a “green revolution, ” the environment for copper mining is favorable for the foreseeable future. Any company, such as District Copper Corporation, which can show it has copper resource, could quickly attract the attention of both investors and larger copper producing companies.
Active miners in the Copper industry and other mining developments of note include:
Southern Copper Corporation (NYSE:SCCO) – Southern Copper Corporation engages in mining, exploring, smelting, and refining copper and other minerals in Peru, Mexico, Argentina, Chile, and Ecuador. The company is involved in the mining, milling, and flotation of copper ore to produce copper and molybdenum concentrates; smelting of copper concentrates to produce blister and anode copper; refining of anode copper to produce copper cathodes.
Freeport-McMoRan(NYSE:FCX) – Freeport-McMoRan Inc. engages in the mining of mineral properties in the United States, Indonesia, Peru, and Chile. The company primarily explores for copper, gold, molybdenum, silver, and other metals, as well as oil and gas. Its assets include the Grasberg minerals district in Indonesia; Morenci, Bagdad, Safford, Sierrita, and Miami in Arizona; Tyrone and Chino in New Mexico; and Henderson and Climax in Colorado, North America, as well as Cerro Verde and El Abramines in South America.
Glencore (LSE:GLEN)(OTC:GLNCY) – Glencore plc engages in the production, refinement, processing, storage, transport and marketing of metals and minerals, energy products, and agricultural products worldwide. It operates in three segments: Metals and Minerals, Energy Products, and Agricultural Products. The Metals and Minerals segment is involved in smelting, refining, mining, processing, and storing zinc, copper, lead, alumina, aluminum, ferroalloys, nickel, cobalt, and iron ore.
BHP Billiton Ltd. (NYSE:BHP) – BHP Billiton Limited discovers, acquires, develops, and markets natural resources worldwide. It operates through four segments: Petroleum, Copper, Iron Ore, and Coal. The company explores for copper, silver, lead, zinc, molybdenum, uranium, gold, and iron ores, as well as metallurgical coal, thermal energy coal, and oil and gas properties.