• A looming global copper shortage could stall the world’s transition to clean energy and digital technologies unless smarter trade and investment strategies are adopted, the United Nations Conference on Trade and Development (UNCTAD) has warned.

• In its latest Global Trade Update, the UNCTAD describes copper as “the new strategic raw material” at the heart of the rapidly electrifying and digitising global economy.  

• But with demand set to rise more than 40 per cent by 2040, copper supply is under severe strain, posing a critical bottleneck for technologies ranging from electric vehicles and solar panels to AI infrastructure and smart grids.

More than just metal

• Copper is central to the global transitions toward renewable energy and a digitally connected economy. 

• It is crucial for key industries such as construction, electronics, renewable energy, transportation, and defence.

• Valued for its high conductivity and durability, copper is essential to power systems and clean energy technologies. It runs through homes, cars, data centres and renewable infrastructure.

• Global demand for copper is expected to grow by over 40 per cent between 2023 and 2040, driven largely by the transition to clean energy and the rapid expansion of digital economies. 

• Some projections suggest that the demand for copper in clean energy technologies alone could triple by 2040. Meeting this need would require more than 10 million tonnes of additional copper — almost half the total global supply in 2023.

• This growing demand highlights the urgent need for major investments in new copper mining projects, especially as existing ore grades decline, and supply becomes more constrained. 

• To stay on track for net-zero emissions by 2030, the world may need to develop approximately 80 new copper mines, requiring up to $250 billion in investments.

• Yet, developing new mines is a slow and expensive process, and fraught with environmental risks – often taking up to 25 years from discovery to operation.

Uneven geography, unequal gains

• Five countries hold over 50 per cent of the world’s total reserves. Chile possesses the largest copper reserves, with about 20 per cent. Australia and Peru each account for 10 per cent, while the Democratic Republic of the Congo and the Russian Federation each hold 8 per cent. The remaining 44 per cent is spread across other nations.

• Over the past two decades, the global copper supply chain has undergone a profound geopolitical realignment, marked by China’s rapid ascent from a major importer to the leading player across multiple stages of the value chain.

• In 2023, China accounted for 60 per cent of global imports of copper ores and concentrates, reflecting its role as the world’s primary refining hub.

• China has become the world’s leading copper refiner, accounting for 45 per cent of global output. 

• This imbalance leaves many developing countries stuck at the bottom of the value chain, unable to fully benefit from their resources.

Tariff and trade barriers

• UNCTAD also highlights the challenge of tariff escalation, where duties on refined copper are relatively low — typically below two per cent — but can rise to as high as eight per cent for finished products like wires, tubes and pipes.

• These trade barriers discourage investment in higher-value industries and lock countries into roles as raw material suppliers, the report warns.

• To address this, UNCTAD is urging governments to streamline permitting, reduce trade restrictions, and develop regional value chains to help developing economies climb the industrial ladder.

Recycling will be vital

• The projected shortfall in copper supply to meet growing global demand underscores the need for sustainable alternatives with lower environmental impact. 

• One promising solution is copper recycling, which preserves the metal’s physical and chemical properties without degradation.

• Recycling also requires significantly less energy than mining and refining newly extracted copper, leading to lower greenhouse gas emissions.

• As industries increasingly prioritise sustainability and circular economy principles, recycled copper is playing a vital role in meeting demand. 

• Countries can also derive economic benefits by exporting copper scrap to nations with advanced recycling infrastructure.

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