Copper – the backbone of our modern world. From the wires in your house to the electric vehicles on the road, it’s a metal so essential to life that it is often overlooked. But the truth is, we’re facing a copper supply crisis. Demand for this metal is soaring driven by the transition towards green energy. This presents a huge challenge but also an unparalleled opportunity for Australia.
Last month, our CEO and mining industry expert, Brad Shaw attended the Copper to the World conference in Adelaide where he gained firsthand insights into the industry’s complexities. One thing is clear, the red metal industry is at a crossroads between challenge and opportunity, but with the right approach, Australia can become a global leader in sustainable copper production.
Major sustainability challenges
There are several key challenges the Australian copper industry experiences in the face of high demand:
- Increasing average lead times
- The path of copper production has become significantly more protracted. Average lead times for new mines take nearly 18 years today from discovery to production, up from 12.5 years back in 2015. 1
- Enviromental permitting issues is also a bottleneck, with around 62% of projects experiencing delays due to stakeholder concerns.2
- Copper mining raises environmental concerns
- The last decade saw a 46% rise in energy consumption, while the increase in copper production for that same period was 30%.3
- Energy costs account for up to 30% of mining operational expenses. Without decarbonisation efforts, GHG emissions are projected to double by 2050 4
- Biodiversity and community impact
- 20% of mines are in biodiversity hotspots, many of which are significant to indigenous communities. Environmental impacts on land, water, and natural resources can affect community rights, leading to further delays and disruptions.5
So, what does this mean?
The increasing challenges facing this industry will likely result in sustained pressure on copper prices for decades. To address this, significant investments in technology and exploration will be necessary to improve mining safety, efficiency, and profitability in increasingly complex ore bodies. Implementing these initiatives could enable previously deemed uneconomic reserves to become viable targets for development.
South Australia: The Copper Kingdom
South Australia is the being very deliberate about building Australia’s “copper kingdom”, with nearly 70% of Australia’s total copper resource6. Despite having this high number, only 27% of Australian copper is produced in SA. In a move to strengthen the state’s copper output, as outlined in the state’s Copper Growth Strategy, the government aims to accelerate exploration, develop innovative infrastructure, and engage with the community to build industry capacity.
The state’s effort in adopting a digital transformation approach has seen notable advancements. Projects like the Northern Gawler Craton initiative have leveraged spatial statistics to analyse geological data, leading to the discovery of new exploration targets. This approach has not only increased the number of observations in many areas but has also opened new possibilities for copper exploration.
Be part of Australia’s clean energy transition
As the demand for copper continues to rise, strategic partnerships and investments can benefit organisations moving towards a more sustainable future in the sector. Led by Mining and Clean Energy industry experts and part of the Clairfield International group, the team provides strategic advisory on capital raising, M&A, and technology commercialisation support to organisations planning to instigate or grow in this sector. Please contact us for more information.
Sources:
1, 2, 3, 4) S&P Global Market Intelligence Report, June 2023
5) IFC Net Zero Roadmap to 2050 For Copper & Nickel Mining Value Chains, 2023
6) Government of South Australia – Energy & Mining, February 2023
