The world’s path to net-zero emissions is quite literally a rocky one. Vast amounts of minerals will be required for the technology needed to electrify and decarbonise the global economy.
A lot of attention is given to the lithium and cobalt needed for electric vehicle (EV) batteries, due to concerns over mismatches between demand and supply. Yet dynamics in the copper market are set to be even more consequential for the energy transition.
Copper, a powerful conductor of electricity, is widely used in green technologies, including EVs, charging infrastructure, wind turbines and solar photovoltaics. S&P Global, a rating and market intelligence provider, recently nicknamed it the “metal of electrification” in a report detailing how a failure to increase copper supplies risks stalling the green transition.
Its demand is projected to grow from 25 million metric tons (MMT) today to about 35 MMT by 2035, according to S&P Global. By the time many government net-zero deadlines are reached in 2050, demand is expected to reach 53 MMT.
“[Meeting this demand] needs significant investment across the whole value chain,” says Roland Harings, the CEO of Aurubis, Europe’s largest copper producer.
The Hamburg, Germany-based company, which has been headed by Mr Harings since July 2019, produces copper through both refining and recycling. Aurubis is also a provider of various other non-ferrous metals including gold, nickel and zinc.
“I think there is a good balance of new projects, bringing new capacity into the supply chain in line with the increasing demand,” says Mr Harings, adding that “it’s ambitious, but doable” for copper supplies to be sufficiently increased.
He continues that investment in mining, recycling and the downstream of value chains aimed at supplying battery manufacturers and automotive original equipment manufacturers makes him believe “it can be done”.
Beyond scaling up copper supplies, diversification remains an issue with China being dominant in the industry. In 2021, China’s copper refinery production was estimated at 10 MMT, equivalent to 38.5% of the global total, according to the US Geological Survey.
Chile, which has the world’s largest copper reserves and mine production, had an 8.5% share of global copper refinery production, followed by Japan (5.8%) and the Democratic Republic of Congo (5.8%). Meanwhile Aurubis’s home country of Germany accounted for less than 3% of global copper refinery production in 2021.
Mr Harings says there needs to be a much quicker expansion of copper mining and refinery production in Western economies.
“Significant growth is going to happen in the Western world,” he says. “The change and growth in the US and Europe for copper needs to be much faster than what we probably need in Asia and the Chinese economy.”
Mr Harings’s main concern is that Western governments “are not fast enough in accepting the new reality” and that more should be done to avoid being dependent on a single country for critical minerals. The US government has taken action to streamline permitting and develop its domestic supply chains for critical minerals, including in rare earths.
Yet, new mining projects often face local opposition, particularly in Europe. In early 2022, Rio Tinto’s $2bn lithium mining project in western Serbia was mothballed. The Serbian government revoked the company’s exploration licences following weeks of nationwide protests over its potential environmental impact.
Mr Harings believes there needs to be a shift in public perception towards a “better in my backyard” thinking rather than the local opposition often facing mining and industrial activities.
“There is this tendency that we want to have e-mobility, mobile phones and all these new technologies, but we are not as a society accepting that this has some consequences,” he says. In Mr Harings’s opinion, modern mining and industrial projects often meet or exceed “even the highest standards”, and should be encouraged for the world to meet net-zero goals.
He asks: “Isn’t it better if we do [these projects] in our region with our regulation and environmental, social and governance standards to showcase how sustainable and responsible mining and industrial production can be?”
Beyond “significant investments”, Mr Harings says there needs to be more support for mining permitting processes in Europe and the Americas, which need to be pushed through more quickly to scale up primary production of metals such as lithium and copper.
Tensions between Russia and the West over the war in Ukraine have highlighted another weakness: the dependence of Germany and other European economies on natural gas. Mr Harings says Europe should work together to stop the use of natural gas in electricity production as quickly as possible.
“We need energy to be supplied to our plants to be able to operate,” he says, adding that Aurubis relies on natural gas for about 20% of its energy needs in its European plants.
“If we are not getting the necessary supply, we have to scale down production. It’s a one-to-one which would be harmful not just for us as a company, but for the whole renewable energy and e-mobility [industry] because we’re supplying the starter stock and important metals for all the transformation activities we want to accelerate.”
To meet demand for its metals, Aurubis has expanded its own downstream capacity, including a €70m investment to recycle more nickel and copper at its site in Olen, Belgium. The company is planning to double its output of nickel from around 4000 tons today, which will be “the perfect starter stock for the battery industry”, according to Mr Harings.
More recently in June 2022, Aurubis broke ground on a new copper recycling facility in the US state of Georgia, which will be the first of its kind in the country. The facility is set to have capacity to process 90,000 tons of complex metal-containing recycling materials per year, including copper cables and printed circuit boards. In Europe, Aurubis already transforms about one million tons of these recycling materials into reusable metals each year.
“As the US is a net importer of metals, we see strong increasing support for the circular economy,” says Mr Harings, who explains that Aurubis’s process enables waste metals to be supplied to industry without any impairment of quality.
Aurubis estimates that it will invest €300m ($320m), with the plant expected to be fully operational by mid-2024. Mr Harings says that the first phase of the project will only use about 20% of the site, with “real potential in the market” for the company to expand even further.
Mr Harings adds that his discussions with business partners and politicians demonstrates the importance of supplying more minerals through both primary production and the circular economy.
“We are in the middle of this transformation, moving away from fossil fuel energy to decarbonised electrified energy,” he says. “Demand is growing, and it cannot be served from recycling materials alone.”
This article first appeared in the August/September 2022 print edition of fDi Intelligence. View a digital edition of the magazine here.