Copper|electrification|Energy|Mining|Power|PROJECT|Projects|Renewable Energy|Renewable-Energy|Solar|Power Generation|Power-generation|Environmental
Copper|electrification|Energy|Mining|Power|PROJECT|Projects|Renewable Energy|Renewable-Energy|Solar|Power Generation|Power-generation|Environmental

WoodMac says climate goals will not realise at current mining investment rates

21st October 2022

By: Marleny Arnoldi

Deputy Editor Online


Font size: - +

Research and consultancy group Wood Makenzie (WoodMac) says the global energy transition presents an almost unattainable mine supply challenge, with significant investment and price incentives required.

In its latest report, titled ‘Red metal, green demand: copper’s critical role in achieving net zero’, WoodMac finds that 9.7-million tonnes of new copper supply will be needed over ten years, which is equivalent to almost a third of current refined consumption, if the industry is to meet the Paris Agreement target of containing global warming to 1.5 ˚C above preindustrial levels.

WoodMac copper markets research director Nick Pickens says copper’s critical role in the energy transition is undisputed. “It is the significant pull on the metal’s existing and potential suppliers, and the investment required, that needs urgent attention,” he adds.

To successfully meet zero-carbon targets, the mining industry needs to deliver new projects at a frequency and consistency never previously accomplished.

WoodMac states that about 17-million tonnes of yearly copper output is in the project pipeline; however, in reality, some of these projects have not been developed owing to poor economics, or other hurdles for those that can offer an attractive return on investment.

“In theory, higher prices should encourage project sanctioning and more supply. But the conditions for delivering projects are challenging, with political, social and environmental hurdles [that are] higher than ever.

“For example, social and environmental licences to operate are proving elusive in major producing countries, including Chile and Peru,” explains WoodMac research director Eleni Joannides.

In the first half of 2021, the volume of committed copper projects totalled an average production of 260 000 t/y, which is well below the one-million tonnes a year required to meet an accelerated energy transition, and this is despite copper prices being at the highest levels in a decade.

Assuming an average capital intensity of the project pipeline and accounting for the volume of copper required to achieve climate targets, WoodMac estimates that more than $23-billion a year will be needed over 30 years to deliver new projects under an accelerated energy transition scenario, or 1.5 ˚C scenario.

This is a level of investment only previously seen for a limited period from 2012 to 2016, following the China-induced commodity supercycle.

“Cost pressures and the larger volumes required for an accelerated energy transition have implications for the industry incentive price,” Pickens says.

Under this scenario, the copper price needed to meet demand rises substantially to $9 370/t, or $4.25/lb, in constant 2022 dollar terms, compared with $7 716/t, or $3.50/lb, under the base-case scenario of limiting global warming to between 2.2 ˚C and 2.4 ˚C by mid-century.

In theory, this price increase would be sufficient to close the supply gap and maintain market equilibrium.


Under WoodMac’s accelerated energy transition scenario, or 1.5 ˚C scenario, there is a larger role for scrap to help meet future demand, but it will not solve the overall supply challenge.

WoodMac principal analyst Bhavya Laul states that copper already relies substantially on the circular economy, with over a third of consumption derived from secondary sources.

The consultancy estimates that, by 2050, this could rise to 45% and, with higher recycling rates, the contribution could be even more.


Low-carbon copper demand over the next 20 years is equivalent to 60% of the current market size, WoodMac estimates.

The uptake of electric vehicles (EVs) accounts for 55% of this demand – the largest single sector contributing to the rise in copper demand.

The offshore wind segment will grow sevenfold by 2040 under WoodMac’s accelerated energy transition scenario, with wind power generation rising by an additional one-million tonnes of copper a year.

Solar power will also contribute to an increase in copper demand, with additional consumption of 1.1-million tonnes a year expected over the next 20 years under a net-zero pathway.

“Great strides in the energy transition will continue to be made over the next decade. However, WoodMac’s modelling concludes that the scale and speed of the requirements for copper, a key enabler of electrification, are a stretch.

“Moreover, copper is not the only participant in this race. A coordinated investment policy for critical minerals and metals is required if we are to be in with a chance of keeping global warming to 1.5 °C,” Pickens concludes.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online



Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones, wear-resistant linings,...


We are dedicated to business excellence and innovation.


Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?







sq:0.065 0.101s - 93pq - 2rq
Subscribe Now