Right now, news of an attempted takeover of one of the world's leading mining firms is shining a light on the strategic importance of copper.

• A copper shortage has already driven spot prices up by nearly 20% since late February 2024 to nearly $10,000 per ton, and roughly double in four years. Various analysts project the price will surpass $15,000 in 2025.
• Global copper demand will surpass supply by 20% to 30% in 2030, depending on how aggressively renewable energy is adopted, according to BCG’s analysis.
• Not nearly enough new mining capacity is coming online to meet growing demand. In fact, several major mining projects in nations with important copper reserves have stalled.

The So What

Copper, with its high conductivity and resistance to erosion, is a critical material for producing everything from electric vehicles and solar panels to electrical cables.

“Copper will be in significantly short supply,” says Karthik Valluru, a BCG managing director and partner who leads the firm’s global work in materials and process industries. “The world can’t afford that because copper is so incredibly important for electronics and the energy transition.”

A severe copper shortage would not only impact the green energy transition. It would also have serious implications for a number of material and process industries.

The metal is an important ingredient in brass, stainless steel, titanium alloys, and many other materials essential for industries ranging from construction to heavy machinery and power plants.

“You may think your company is insulated from the copper shortage,” says Marielle Remillard, a BCG principal with expertise in heavy industry. “But copper’s widespread use in metal alloys and electronic components may introduce vulnerabilities across the value chain.” 

Now What

Addressing the copper shortage will require action in the following areas:

Increased Production. What’s really needed are new copper mines. But it takes 10 to 14 years to bring greenfield mines online, and major reserves are concentrated in a few countries where regulatory and political hurdles have slowed new projects. Many mining companies, still stinging from bad investments during the previous cycle in the early 2000s, have hesitated to make big capital commitments.

Mining companies and other stakeholders could mitigate risks by pooling the capital through joint ventures and consortia and spreading their bets across several mining ventures. Mining companies could also deploy digital analytics to more efficiently explore for copper and extract it from rock formations with different chemistries.

Circularity. A lot of copper still sits in landfills, such as in old computers, vehicles, and wiring from demolished buildings. Often, copper is blended into other discarded materials. Greater investment is required to recover electronic waste and process materials well enough so that the copper can be reused. Circularity isn’t sufficient to meet the supply gap. But it can make a meaningful contribution in the short term, especially in nations like the US that have substantial e-waste.

Substitution. When similar supply and cost pressures arose over aluminum several decades ago, companies found ways to substitute other materials. As a result, annual demand growth for aluminum has been relatively flat. The same could happen with copper. “At some point, there’s going to be an economic incentive to design copper out of many products,” says Valluru.

Aluminum can replace copper in high-voltage transmission cables, for example, and many companies are developing lithium-ion batteries with chemistries that don’t require copper. Some carbon-based materials, like graphite, also have conductive properties and can be used for new applications. R&D initiatives in these areas should be accelerated.

CEOs should also look beyond simple substitution. They should also invest in innovation to develop products that require less copper and alloys. They can develop lighter-weight materials, for example, and invest more in clean-energy technologies such as nuclear that require fewer critical minerals than solar and wind systems.