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The role of copper in the energy transition

Humans have used copper for more than 10,000 years but have never needed the metal more than now as it is vital component of technologies at the core of the energy transition trying to prevent runaway global warming.

The trouble is that a gap exists between the supply and demand of copper, with repeated warnings over the past year that a growing shortage could slow the transition.1,2,3  Recent analysis highlights the potential duration of the copper shortage and its potential to provoke greater price volatility, slow production of essential technologies, and disrupt global supply chains. To put it bluntly, copper scarcity may slow adoption of renewable energy systems and hinder progress towards sustainable development goals. 

These are unwelcome prospects at a time when the UN Secretary-General has warned that we are entering an era of ‘global boiling’. Copper supply is thus a real and mounting concern that demands solutions. 

Based on our review, a four-pronged response is recommended in which three key deliverables are resource diversification, recycling, and technology innovation. The fourth element, enabling everything else, is collaboration and investment between multiple public and private sector stakeholders to ensure an adequate supply of copper for sustainable development. 

The growing copper supply-demand gap 

Among recent reports and studies, S&P Global Market Intelligence projects that copper demand could outpace supply by around 50 million tonnes (Mt) per year by 2035. For perspective, this is twice as much copper as humankind used over the period 1900–2022 as the industrial revolution intensified and spread. 

This imbalance could be fuelled by the escalating demand we are seeing for copper-intensive technologies such as electric vehicles (EVs), renewable energy systems, and advanced electronics. Several factors are driving the widening of the gap (Table 1). 

DriverCauses and effectsNotes 
Energy transition Quicker transition significantly raises demand for copper.Copper is fundamental to renewable energy infrastructure, energy storage systems, and EVs. 
UrbanizationRapid urbanization, especially in emerging economies, needs more infrastructure.Infrastructure (incl. energy grids), transportation, and smart cities require lots of copper.
Technological advancement More 5G networks; Internet of Things (IoT) devices; other advanced technologies.All rely heavily on copper for efficient connectivity and conductivity.
Supply constraints:Declining ore grade; limited new finds; geopolitics in major copper-producing regions.More than 50% of the 20 Mt copper produced in 2020 was from nations categorized as ‘unstable’ or ‘extremely unstable’. 

Table 1: What is widening the gap between copper supply and demand?

Copper shortages threaten pace of the energy transition 

Looking a little deeper into these impacts, copper is a key material in the core technologies of the energy transition – solar panels, wind turbines, power cables, and energy storage systems. The concern is therefore that copper shortages could delay timelines for achieving carbon-reduction targets and hinder development of cleaner energy alternatives. 

Electrification is expected to increase annual copper demand from about 25 Mt now to 36.6 Mt by 2031, with supply then forecast to be around 30.1 Mt, creating a 6.5 Mt shortfall at the start of the next decade, according to McKinsey & Company.

Green uses of copper had a 4% share in copper consumption in 2020 and this is expected to more than quadruple to 17% by 2030, according to a recent note from Goldman Sachs analyst Aditi Rai. He estimated that a net-zero emissions pathway would create the need for 54% more copper on top of that in 2030.5   

Figure 1: Global copper mine production

Figure 1: Global copper mine production (Source: World Copper Factbook 2021, publ. ICSG, 30 December 2021 from 2020 data)

Upheaval and uncertainty among major copper producers 

The narrative about copper in the energy transition is playing out against a backdrop of geopolitics affecting supply. This should not be ignored in discussions and efforts to raise the global ability to meet short and longer-term demand. 

South America dominates copper production today (Figure 1). Chile, the world’s largest copper producer, accounts for more than a quarter (27%) of global supply but recorded a year-on-year production decline of 7% in November 2022. In a January 2023 note, Goldman Sachs said it believed Chile was likely to produce less copper from 2023 to 2025. 

Peru accounts for 11% of global supply. It has been rocked by protests since former President Pedro Castillo was ousted in December 2022 in an impeachment trial. Mining giant Glencore announced in January 2023 that it was suspending operations in its Antapaccay copper mine in Peru after protesters set fire to its premises.

Potential new supplies could come from the rich copper seams in Congo and Zambia in central Africa. They are now being exploited. According to Congo’s Ministry of Mines, copper metal exports rose from 1. Mt in 2021 to 2.3 Mt in 2022. However, the 2022 figure was still less than half of Chile’s output, and the largest copper deposits remain in South America. 

A four-pronged strategy to tackle copper shortages 

To address the impending copper supply and demand imbalance and ensure a successful transition towards a sustainable future, four steps have been recommended by industry players (Table 2). 

Resource diversificationInvest in research and exploration to identify new sources of copper, diversifying the supply base and mitigating geopolitical risks.
Recycling initiativesPromote and incentivize the recycling of copper from discarded electronic devices and other waste streams, reducing pressure on primary mining operations.
Technology innovationDevelop and adopt technologies that use copper more efficiently and explore alternative materials for certain applications. 
Collaboration and investmentGovernments, industries, and international organizations should collaborate to fund copper exploration, production, and recycling initiatives to ensure an adequate supply for sustainable development.

Table 2: For recommendations to head off copper shortages slowing the energy transition

Reducing risk and identifying opportunity 

Summing up, the global shortage of copper presents a significant challenge to the energy transition and the broader sustainable development goals. Addressing this issue requires a multi-faceted approach involving technological innovation, resource diversification, and collaborative efforts across industries and nations. Failure to secure an adequate supply of copper could hinder the realization of a greener and more sustainable future. 

With copper's historical significance in technological advancements, its supply shortage amid the transition to clean energy could hinder progress, yet it presents an investment opportunity for those capitalizing on demand-supply disparities, benefitting from rising prices, expanded production, and innovation potential. 


  1. ‘There Isn't Enough Copper in the World, Shortage Could Last Until 2030’, Lee Ying Shan,, 6 February 2023

  2. ‘The Copper Conundrum: Three Factors of Supply and Demand’, Justin Lin,, 24 March 2023
  3. ‘Copper Shortage Threatens Green Transition’, Yusuf Khan,, 18 April 2023 

  4. ‘Bridging the copper supply gap’, Scott Crooks at al., McKinsey’s Metals & Mining Practice,, 17 February 2023 

  5. ‘The global copper market is entering an age of extremely large deficits’, Rick Mills,, 25 July 2023
9/20/2023 9:00:00 AM

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Shaik Ejamani Peer Mohamed Mohamed Marican

Shaik Ejamani Peer Mohamed Mohamed Marican

Senior Consultant