Trafigura’s CEO, Jeremy Weir, said on Tuesday, April 18 that while the appreciation of the importance of metals for the energy transition had significantly improved in recent years, the current dearth of new copper projects could derail net-zero targets.
“There is a massive supply gap we must address over the next decade… it’s going to take enormous effort from the industry, but also from everyone, and in particular policymakers,” he told the CRU copper conference in Santiago, Chile, held during the annual CESCO industry week.
“Governments and policymakers really need to understand that unless we have enough copper, we’re not going to meet climate-change objectives, and could totally derail the whole energy transition. That’s a real problem,” he said.
Copper is a central enabler in the energy transition due to its use in charging infrastructure and batteries for electric vehicles, power grids and renewable energy such as wind or solar.
Copper market deficit in 2023
But with new projects few and far between and long delays in permitting, Fastmarkets analyst Andrew Cole forecasts the global refined copper market will be in a 340,000-tonne deficit in 2023.
“We’re seeing the EU put copper on its critical minerals list; I’d like to see the US do the same thing,” Weir added.
Critical raw materials are defined as those which are of high importance for the overall economy and also subject to a high level of supply risk.
Last month, copper was included on Europe’s list of minerals deemed to be strategic as well as its list of those deemed critical. In contrast, the US did not include copper on its critical minerals list, leading a group of Senators to urge for its inclusion.
Weir noted that miners also need the right fiscal environment to proceed with much-needed projects.
“You need to ensure there is a stable fiscal regime, because investments being undertaken by the mining industry are very long-term. Trying to change the benchmarks or game halfway through makes it very, very difficult for some institutions, and people shy away from that [situation],” he told delegates.
At the same time, Weir said there is also a need to better educate society about the value of mining, something that has not been done particularly well to date.
“The industry, to some degree, is not well-liked, not well-appreciated, not well-understood. While the industry does a good job of addressing issues in the local environments it operates in, including the indigenous communities, social and environmental issues, I still think that broader society doesn’t know the importance of mining,” he said.
According to Weir, governments need to play their part in educating the industry.
“We’re going to have to make a choice: If you want to decarbonize, you’re going to need metals, and to do that, we’re going to have to develop resources,” he said at the conference. “People need to understand the resources aren’t just going to come from the circular economy; they may in the future, but not today,” he added.
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