Peak Copper | Red, Hot, and Running Out

“If the entire world (lived by) same standards as North America … (the world) would not have enough copper to meet that demand.”

Red, Hot and Running Out

By Saif Qureshi,

Copper may seem like a boring old metal, but it’s used in many places and is quite useful in our society.  So where exactly is this metal used?  Try things like piping installations, electrical wiring, building construction, household products and of course pennies.  Due to this, the demand for copper is red hot in the world markets right now, as countries such as China and India continue to expand.  In fact, last year the price of copper increased by 126% and reached a 16-month high in December 2009.

However, if demand continues to grow at this rate, some researchers estimate that we may have less than 63 years before we hit Peak Copper and fully deplete our reserves.

Copper Uses

Humans have used copper for millennia and although over time its usage has changed, our society still continues to depend on this resource and probably will even into the future.  So you might be wondering, “What’s so special about this metal that we can’t just replace it with something else?” The reason why Copper is used so much is that it has some special properties.  For example, copper is a ductile and very conductive metal, which means that it can be shaped and bent easily and also that it conducts electricity very well.   This makes it perfect for the electrical wiring in houses and industrial buildings.  Another metal, which is an even better conductor of electricity, is gold, but copper is still used more often due to the obvious cost advantages.

Copper has also found its place in architecture because of the material’s long lasting nature (e.g. some copper roof installations last for 200 years), its recyclability, finish, environmental friendliness and its ease of use.  Due to copper’s useful qualities and low price, it is also used in many alloys such as brass and bronze, which are used in various places, such as musical instruments and in metal plating.  However, although the outlook for copper is rosy right now, in a couple of decades all this could change.

The Issue

As of now, copper reserves in the world are still high, but unfortunately, copper demand is growing.  According to the U.S. Geological Survey, in 2005, there were an estimated 950 million metric tons of world copper reserves, which would last for another 63 years.  In 2008, copper production reached 18.4 Mt (metric tons) and in 2009 it was forecasted to be 19.2 Mt.  However, these figures also include the amount of copper that was recycled, which is quite a significant portion. As for the demand side, world usage of copper in 2008 was 18.2 Mt and was forecasted to be 18.9 Mt in 2009, an increase of 3.4%.  To add to that, almost 95% of copper ever processed has been extracted in the 20^th century.

The reasons for this growing demand include enormous population, technological and industrial growth throughout the world.  Copper usage has increased exponentially and will only increase in the years to come due to growing demand from emerging markets (e.g. the BRIC nations). At this rate the reserves of copper are bound to start dwindling and prices are bound to shoot up, which means that in the long run, this metal will not be viable, or even worse we may run out.  The consequences of this are obvious. First, we will lose the various benefits this metal provides to our society, such as those above-mentioned uses.  There will also be unemployment and sectoral shifts in the industry due to a changing reliance on different metals.  This will lead to inefficiencies in the market and could cause another economic downturn, or an even worse one, if coupled with other resources shortages, which are bound to occur in the future.

This is why we must understand the concept of “Peak Copper,” which refers to the time when the reserves of copper are fully depleted.  As one study estimated, this could be as soon as the year 2068.  As university students, this may not seem to be an issue right now but in the later years of our lives, resource shortages such as that of copper could have a great impact on our lives.

The Writing on the Wall

According to one study, if the entire world were to live at same standards as North America, meaning they would have same infrastructure for power transmission, construction and other areas where copper is used, then we would not have enough copper to meet that demand. This is troubling since the average rate of copper usage per person seems to be rising in developing countries (likely due to the fact that more electronics are consumed as incomes rise).

The silver lining though is that our neighbour, the US, is quite secure and lucky as it has large reserves of copper.  In the long run, it is self-sufficient because these reserves will probably be enough for future demand, since the process for recycling copper is quite easy and cheap. Canada meanwhile, also has large deposits of copper as well but most of the production is exported.  In Canada, the main deposits of copper are in Sudbury, Ontario and in various areas of British Columbia and some other provinces.  The copper industry is worth 1.6 billion in Canada and is dominated by two main players: INCO and Noranda Ltd., who refine copper in Sudbury and Montreal respectively.

As well, current world reserves are still high and technology is continuously becoming ever more efficient at mining.  2068 is only an estimate, one of a few, some predicting copper reserves (e.g. using the broadest definition for reserves) at up to 1.6 billion metric tons globally.

When copper shortages do occur it might be possible for us to find substitutes for copper or discover new ways or technology for mining copper reserves that are not currently accessible due to economic or technological constraints.

As Canadians, we need to especially consider this in our decision-making, because Canada has quite a large resource industry and future reserves of commodities such as copper will have a large impact on our economy.

ARB Team
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