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Posts Tagged ‘copper

our electric future – is copper a problem?

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So I recently had a conversation with someone who told me that electric vehicles were not the future because – copper. I must admit that I immediately got tetchy, even though I knew nothing about the ‘copper problem’, or if there actually was one. My interlocutor wasn’t anti-green in any way, he was more into electric bikes, tiny-teeny cars, and people staying put – not travelling anywhere, or not far at least. Perhaps he imagined that ‘virtual travel’ would replace real travel, reducing our environmental footprint substantially.

It has struck me that his rather extreme view of the future was an example of the perfect being the enemy of the good. I’m all for electric bikes, car-sharing and even a reduction in travelling, within limits (in fact migration has been associated with the human species since it came into being, just as it has with butterflies, whales and countless other species) but although I note with a certain disdain that family cars are getting bigger just as families are getting smaller (in our WEIRD world), I have no faith whatever that those family cars are going to be abandoned in the foreseeable.

But getting back to copper, the issue, which I admit to having been blind to, is that with a full-on tilt to electrification, copper, the world’s most efficient and cheaply available electric conductor, might suddenly become scarce, putting us in a spot of bother. But will it? That depends on who you talk to. Somehow the question brings back to mind David Deutsch’s The beginning of infinity, a super-optimistic account of human ingenuity. Not enough copper? No problem we can’t engineer our way out of…

Currently demand for copper is outstripping supply, but will this be a long term problem? CNBC made a video recently – ‘Why a looming copper shortage has big consequences for the green economy’ – the title of which, it seems to me, is more pessimistic than the content. Copper has been an ultra-useful metal for us humans, literally for millennia. But its high conductivity – second only to silver, which presumably is more rare and so far more expensive – has made it the go-to metal for our modern world of electric appliances. It also has the benefit of being highly recyclable, so it can be ripped out of end-of-life buildings, vehicles and anything else and re-used. But EVs use about four times more copper than infernal combustion vehicles, and wind turbines as well as solar panels require lots of the stuff, as do EV charging stations, and there aren’t too many new copper mines operating, so…

From what I can gather online, though, there’s no need for panic. Apparently, we’re currently utilising some 12% of what we know to be available for mining. The available stuff is the cheap stuff, and until now we’ve not really needed much more. But new techniques of separating copper from its principal ore, chalcopyrite, look promising, and markets appear to be upbeat – get into copper, it’ll make your fortune!

There’s also the fact that, though things are changing, the uptake of EVs is still relatively slow. People are generally talking about crunch time coming in that vaguely defined era, ‘the future’. High copper demand, low supply seems to be the mantra, and all the talk is about investment and risk, largely meaningless stuff to impoverished observers like me. In more recent times, copper prices have dropped due to ‘a manufacturing recession caused by the energy crisis’. I didn’t know about either of these phenomena. Why wasn’t I told? Mining.com has this to say about the current situation, FWIW:

Copper prices typically react to the ebb and flow of demand in China, which accounts for half of global consumption estimated at around 25 million tonnes this year. But this time the focus is on Europe, accounting for 15% to 20% of the global demand for copper used in power and construction. The region is facing surging gas and power prices after energy supply cuts, which Russia blames on Western sanctions over the Ukraine conflict. The European Union has made proposals to impose mandatory targets on member countries to cut power consumption.

Make of this what you will, I have quoted the most coherent passage in a mire of economics-speak. Presumably, supply is affected by the volatile conditions created by Mr Pudding’s testosterone. So everybody is saying that copper is falling in price, and this is apparently bad. Here’s another quote to make sense of:

Due to closing smelters and falling demand from manufacturers, an excess of copper stockpiles has been building up in a number of Shanghai and London warehouses, also contributing to downward pressure on prices.

Meaning copper isn’t worth much currently, though this is probably a temporary thing. Glad I haven’t anything to invest.

I think the bottom line in all this is don’t worry, be happy. Copper availability for the energy transition is subject to so many incoherent fluctuations that it’s not worth worrying about for the average pundit. Here in Australia the issues are – you can solarise your home no worries. Buying an EV is another matter, since none are being manufactured here, so governments need to be pressured to create conditions for a manufacturing base, and the infrastructure to support the EV world. Storage and battery technology need to be supported and subsidised, as is in fact starting to happen, with a more supportive federal government, and state Labor governments here in South Australia, and in Western Australia, Queensland and Victoria.

So, to conclude, having read through quite a few websites dealing with copper as the go-to metal for the transition to green energy (some links below), I haven’t found too much pessimism or concern about Dr Copper’s availability, though there are clearly vested interests in some cases. Australia, by the way, has the second largest copper reserves in the world (a long way behind Chile), and this could presumably be turned to our benefit. I’m sure a lot of magnates are magnetised by the thought.

References

https://oilprice.com/Energy/Energy-General/A-Copper-Crisis-Threatens-The-Energy-Transition.html

https://intellinews.com/ev-market-may-create-copper-deficit-219864/

Europe’s energy crisis to drop copper price to two-year low

Driving the green revolution: The use of copper in EVs

Written by stewart henderson

October 26, 2022 at 10:09 pm