A metal in demand—across sectors and continents
Copper is fast becoming the most strategically important commodity of the decade. Once a basic input for construction and electronics, it is now central to the green transition, artificial intelligence, and global defense. Yet despite skyrocketing demand, global copper production is falling behind, setting the stage for a critical shortage.
As of late 2025, copper prices have soared to over $11,000 per tonne—a significant jump from $8,500 just two years ago. And the fundamentals behind this rise are anything but temporary.
A supply crisis in slow motion
Copper mines around the world are ageing. Production from existing and planned mines is on track to meet only 70% of global demand by 2035, according to the International Energy Agency. New discoveries have dramatically slowed—only 14 new copper deposits were found between 2013 and 2023.
In 2025 alone, analysts forecast a 304,000-tonne shortfall, which is expected to widen in 2026. The world’s 20 largest mines currently produce one-third of global supply, a dangerous level of concentration that magnifies geopolitical and operational risks.
AI and grids: the new copper giants
Data centres—the digital factories of the AI era—are rapidly becoming copper superconsumers. AI-capable data centres require 27–33 tonnes of copper per megawatt, more than twice that of conventional facilities. BHP projects that copper use in data centres will increase sixfold by 2050.
Meanwhile, renewable energy infrastructure is copper-intensive. A green power grid needs vast quantities of wiring, cabling, and transformers—areas where copper is irreplaceable. AI firms are even outbidding grid suppliers for copper-based equipment like transformers.
Hidden demand: the military factor
Beyond clean energy and AI, military demand for copper is rising sharply—yet it remains opaque. Global defence spending surged to $2.7 trillion in 2024, a 9.4% increase, fueling further pressure on copper reserves. As defence needs are rarely disclosed in detail, this adds an unpredictable layer to demand forecasting.
Mining politics and production bottlenecks
Copper production is not just about geology—it’s deeply political. The US has only two operational smelters, while China controls over 50% of global smelting capacity. Even though China mines just 9% of the world’s copper, its overseas investments raise that influence to 20%.
Major new mines like Resolution Copper in Arizona face delays from environmental and indigenous land rights concerns. Despite over $2 billion already invested, production may still be a decade away. Other major mines in Chile and Peru are facing similar hurdles.
No quick fixes: recycling, M&A, and legacy assets
With new mining projects facing barriers, miners are turning to recycling and brownfield expansions. Firms like Freeport and BHP are exploring the viability of processing old waste piles and reopening shuttered mines.
At the same time, M&A activity is heating up. The proposed $50 billion merger between Anglo American and Teck Resources aims to build one of the largest copper producers globally.
Yet, even with consolidation and recycling, analysts warn that the world is increasingly relying on “theoretical supply”—projects without confirmed funding or clear timelines.
The road ahead: a structural deficit
Looking forward, the copper market appears headed for a structural deficit by 2030. Natalie Scott-Gray of StoneX warns that only countries with stockpiles or full control over production and processing will be well-positioned.
Prices are likely to remain elevated. For industrial buyers, policymakers, and investors, the message is clear: copper is no longer just a commodity—it’s a strategic asset.