Wood MacKenzie Report Highlights Complexities in Mining Copper Supplies

Copper is expected to play a significant role in electrification as the world works to decarbonize supply chains to reduce global emissions. As the demand for the red metal increases, obtaining a steady supply of the metal has become a priority for industries and governments alike. However, a recently published report by Wood Mackenzie highlights that making this a reality may be harder than investing in new mines.

The report starts by explaining that without copper, the world cannot decarbonize. It adds that with demand expected to increase as countries work toward achieving climate goals, the demand for the red metal will rise by more than 70% to hit 56 million tons by 2050. Huge investments in new mining capacity will be required to meet this surge in demand.

Currently, China dominates the processing and semimanufacturing of this metal. The report argues that the scale of the country’s dominance in the metal’s supply chain means it can’t be replaced fully. It explains that key stakeholders will need to plot a realistic course that involves the China if the red metal market is to deliver on global requirements while remaining effective.

The copper supply chain is a complicated international system that is made up of both semifabricated products and raw materials.

The value chain of copper’s supply can be classified into the following stages: mining, refining/smelting, semifabricating and end-use manufacturing of finished goods. In addition to there being limited vertical integration, every stage involves different companies. The report also discusses how China’s heavy investment in the processing and semimanufacturing sectors is a challenge to securing supply of copper.

In its conclusion, the report notes that while the need to meet climate targets and secure minerals for the transition to clean energy is a priority around the globe, protectionist moves to secure raw materials fail to consider the current efficiencies and complications of copper market supply chains.

Unless there’s a huge shift in the efficiency and rate at which the rest of the world operates and deploys capital, decoupling from China entirely will slow the energy transition while also costing more. It adds that if the world does manage to decouple from China, a sudden shift in the international copper market may result in supply shortages, price volatility and possible economic downturn.

In addition, the report called attention to concerns about possible geopolitical tensions that may worsen problems dealt with when securing copper supply.

These complexities in the copper supply chain make it more urgent for exploration companies  such as First Tellurium Corp. (CSE: FTEL) (OTCQB: FSTTF) to ramp up their operations so that new mines can start production sooner rather than later.

NOTE TO INVESTORS: The latest news and updates relating to First Tellurium Corp. (CSE: FTEL) (OTCQB: FSTTF) are available in the company’s newsroom at https://ibn.fm/FSTTF

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