Analysts and miners are bullish on the copper outlook, as increased demand for electric cars and renewable energy equipment has driven the price towards US$3/lb for the first time in two years.
According to multiple analysts, inventories of copper are depleting worldwide, driving up demand for more from miners.
John Fennell, the chief executive of the Australian branch of the International Copper Association, reportedly told the ABC the trend was being driven by demand for lithium-ion batteries used in electric vehicles, as well as charging infrastructure used in modern renewable energy projects.
“Without copper you wouldn’t be able to run electric vehicles, it’s that simple,” Fennell told ABC.
“Along with the rotary motor, it’s also needed for basic components like battery leads. And now a number of countries have signed up to the Electric Vehicle Initiative, so we expect to see the number of [electric cars] on the road to be in the tens of millions.”
The EVI is an initiative of the International Energy Agency, and was launched in 2009, but has recently gained a significant amount of traction, with Canada, Germany, India, the US and the UK all among the countries taking part.
“Along with electric vehicles, the major trends [for copper demand] were in areas like renewable energy,” Fennell said.
“There’s four times as much copper used in renewable energy generation than there is in traditional coal-fired power generation.”