Copper production must double in the next 30 years to meet demand driven by global trends towards decarbonisation and electrification, a senior BHP executive said on Thursday.
Copper, widely used in power and construction, is well placed to benefit from the decarbonisation targets of some the world's biggest economies including top carbon emitter and top metals consumer China.
"Decarbonisation and electrification are the main drivers for the future of metals commodities, delivering on the commitment of moves towards a low-carbon economy," Tariq Salaria, vice president for sales and marketing at BHP, said.
"To keep pace with these mega trends, copper production will have to double over the next 30 years," he said in a video broadcast at the China Nonferrous Metals Industry Chain conference in Shanghai.
"Copper has become synonymous with a low-carbon economy," he added, while calling for more Chinese participants in the Copper Mark sustainability initiative. BHP signed up for the group in November.
Salaria also criticised the annual benchmark mechanism for copper concentrate treatment and refining charges (TC/RCs), usually agreed in November by a leading miner and a Chinese smelter, saying it "contributed to long periods of over-capacity and excess margins flowing to intermediaries".
This year's TC/RCs negotiations - held via video conferencing - have run into December following disagreement on where the 2021 benchmark should be.
"Distortions in the pricing mechanism result in smelters in the highest-cost regions continuing to scratch out an existence, while the more modern, efficient operators find margins squeezed over long periods of time," Salaria said.
Updating the mechanism will address low smelter margins and excess margins for traders, he added, "benefiting those that transform copper, while providing the final consumer the reassurance that copper contained is produced using the latest modern smelting techniques."