Research Shows Slow Progress in Diversifying From Chinese-Backed Copper Sources

The research shows that diversifying away from Chinese copper, a crucial mineral for green energy, has been slow and could be costly.

“A scenario without China in the copper supply chain would necessitate a significant increase in processing capacity to meet energy transition goals,” said Nick Pickens, research director of global mining at Wood Mackenzie.

“According to our projections, there will be an additional demand for 8.6 million tonnes of copper outside China over the next ten years. This demand represents 70 percent of smelter capability and 55 percent of fabricator capacity in the rest of the world. As governments and manufacturers seek to move away from China, it is essential to consider the entire supply chain, not just mining operations.”

Wood Mackenzie forecasts a 75 percent surge in copper demand to 56 million tonnes by 2050.

However, it is noted that China has already accounted for 75 percent of global smelter capacity expansion since 2000 and currently controls 97 percent of global smelting and refining capacity, contributing over 3 million tonnes of production and about US$25 billion in investment.

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The consultancy estimates an additional 8.6 million tonnes of copper demand in the coming years, which represents 70 percent of current smelter capability and 55 percent of fabricator capacity worldwide.

This would require an additional investment of US$85 billion to establish new smelting and refining capacity to replace Chinese facilities.

Outside China, Wood Mackenzie indicates that an additional 16 million tonnes of capacity will come from one custom smelter in India, two integrated smelters in Indonesia, and a new smelter in the Democratic Republic of the Congo (DRC).

However, the Indian and Indonesian smelters have not yet been commissioned this year, while the one in the DRC, partially driven by Chinese investment, will open next year.

In contrast, the United States has not invested in primary alternatives and instead focused on secondary smelters and scrap copper, with plans to establish a new complex in Georgia.

“Financial obstacles for these investments are significant, as resistance to new smelter projects on environmental and social grounds, especially in Europe, remains strong,” stated Pickens.

“Practicality and compromise will be crucial to achieving net zero objectives without imposing excessive costs on taxpayers. Relaxing global trade restrictions may be a necessary concession.”

Australia’s Department of Industry, Science, and Resources (DISR) reported in its Resources and Energy Quarterly that the country’s copper export earnings for 2024–25 and 2025-26 have been revised upwards by $2.5 billion and $2.7 billion due to higher forecast prices and increased export volumes of metal content, including copper ores, concentrates, and refined copper.

“Copper plays a vital role in the global transition to net zero, and demand for copper is expected to increase over the next decade,” a DISR spokesperson informed The Epoch Times.

Last March, the Minerals Security Partnership Principals’ Meeting concluded, where countries discussed collaborations on 23 projects involving cobalt, copper, gallium, germanium, graphite, lithium, manganese, nickel, and rare earth elements.

The United States, Australia, Canada, Estonia, Finland, France, Germany, India, Italy, Japan, the Republic of Korea, Norway, Sweden, the U.K., and the European Union expressed their intent to strengthen their partnership in accelerating the development of diversified and sustainable critical minerals supply chains.