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Copper is the missing ingredient of the energy transition

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Summary

This article discusses the potential copper crunch due to the increasing demand for copper as part of the energy transition. It looks at the differences in production between copper and oil, noting that copper mining is more concentrated by region and it can take years to develop a greenfield copper mine. It also looks at similarities between the two industries, such as the fact that during the commodities supercycle, both industries used shareholders' money on overambitious projects. The article then discusses possible solutions to the copper crunch, such as doubling down on brownfield sites and using technology to recover copper more efficiently.

Q&As

What are the pressures on copper supply due to industrial development, electrification and decarbonization?
The pressures on copper supply due to industrial development, electrification and decarbonization are likely to turbocharge demand for the red metal.

What are the differences between the oil and copper industries?
The differences between the oil and copper industries include the technology used to find copper deposits, the length of time it takes to develop a copper mine, and the fact that oil exploration is done in the ocean while deep-sea mining is still nascent and environmentally sensitive.

How is technology being used to recover copper from leaching processes?
Technology is being used to recover copper from leaching processes with new reagents and new operating techniques using data analytics.

How are investors responding to concerns about copper supply?
Investors are demanding shareholder payouts rather than risk equity on big capital projects, but the mood may be starting to shift. In the oil industry, high prices of crude have led companies like Shell and BP to rethink the pace at which they cut oil production, and copper miners are becoming bolder.

What is the impact of the shale revolution on the oil industry?
The shale revolution made a mockery of the peak-oil mantra and led to an increase in oil production.

AI Comments

👍 This article provides a comprehensive look at the copper industry and its potential for a copper crunch. It is well-written and provides a balanced look at the potential solutions to the shortage.

👎 This article fails to address the potential environmental and social issues associated with increased copper mining and production. It also glosses over the potential impacts of a copper crunch on low-income communities.

AI Discussion

Me: It's about the potential copper crunch due to rising demand and limited supply. It talks about the difficulties of producing copper, and how the industry differs from the oil industry in terms of exploration and production.

Friend: That's interesting. What are the implications of this article?

Me: The article suggests that copper shortages could become an issue in the near future. The copper industry is facing a range of challenges, from environmental concerns to labour shortages to national politics, which could make it difficult to increase copper production. As a result, copper prices could rise sharply and there may be a need for more efficient production methods and technologies to make up for the shortfall. Additionally, the article highlights the importance of diversified investments and the need for companies to be mindful of environmental, social, and governance (ESG) issues.

Action items

Research the copper industry and its potential for growth in the coming years.
Investigate the environmental, social and governance (ESG) issues associated with copper mining.
Explore the potential for new technologies to increase copper production and reduce costs.

Technical terms

Elder statesman: an experienced and respected leader in a particular field.
Supercycle: a period of rapid economic growth and development.
Decarbonisation: the process of reducing the amount of carbon dioxide in the atmosphere.
Seismic testing: a method of testing the earth's subsurface using sound waves.
Deep-sea mining: the process of extracting minerals from the ocean floor.
Greenfield: a project or activity that is new and untested.
ESG: Environmental, Social and Governance, a set of standards for a company's operations that include factors such as climate change, human rights, and corporate governance.
Brownfield: an existing industrial or commercial site that is being reused for a new purpose.
Reagents: a substance used to cause a chemical reaction.
Data analytics: the process of analyzing data to gain insights and make better decisions.