Categories: Stock Market
Topics: Copper Stocks

No Net-Zero Without Copper: Here’s How to Profit

You’re hearing a lot of talk lately about the target goal of net-zero carbon emissions by 2050 as part of the global energy transition.

Net-zero means achieving a balance between the carbon emitted into the atmosphere and the carbon removed from it… and that balance is critical to slowing the effects of human-caused climate change: something we’re all experiencing daily. 

But the prospect of either getting there or not getting there may hinge on one key metal: copper.

Copper, because of its unmatched ability to conduct electricity and heat, is key to the global energy transition and the path to net-zero. 

Millions of feet of copper wire will be needed just for the revamping of the world’s ailing power grids. 

And what are we seeing presently across the United States? Continuous emergency alerts from our nation’s largest grid operators amid what may prove to be the longest and most powerful heat wave on record. 

Just last week, California’s main power grid operator issued an emergency watch notice. That was quickly followed by a Level 1 Energy Emergency Alert from PJM —  the biggest electric grid operator in the US — for 13 northeastern states plus the District of Columbia.  

Texas is likely next to run into trouble, as it has in previous heat waves, as the state’s power grid hit an all-time demand high in mid-July. That same dire situation is rapidly unfolding in Arizona, which is baking under stifling temperatures well above 110 with little relief in sight. 

And that’s just our own nation’s power grids. Hundreds of thousands of tonnes of copper will also be needed to build out wind and solar farms. As just one example, offshore wind turbines alone require 8 tonnes of copper per megawatt. 

Add in EVs, electronics, and the 180 kg of copper required for the average US home and what you come up with is a copper supply gap of around 6.5 million tonnes by the start of the next decade.

S&P Global projects that annual global copper demand will nearly double to 50 million tonnes by 2035. 

McKinsey & Company says the world is going to be short some 50Mt Cu in its quest to meet net-zero by 2030. That’s just 7 years from now! Further, last year, global copper mine production sat at just 22 million tonnes — well short of even today’s demand level.

Also alarming is the fact that, of the 20Mt of copper produced in 2020, more than half was from nations categorized as “Unstable” or “Extremely Unstable.”

There’s also a lack of new copper mines in the development pipeline. According to Glencore CEO Gary Nagle, “Whatever was planned to be built has been built. There is nothing coming behind [the projects now ramping up into production].”

You also need to factor in that, once a new copper discovery is made, it can take 10 years, and oftentimes as long as 20 years, for the metal to reach the supply chain.

It all adds up to an alarming supply crunch for the world’s most critical metal at the most critical time. 

Yet, for speculators looking to capitalize, it means that the current sub-$4/lb copper price is almost guaranteed to be a launching point for much higher copper prices — and perhaps record copper prices — in the coming years. 

It also means the best-positioned North American copper companies are set to go along for what’s shaping up to be a very, very profitable ride.

That’s why I’m truly excited to say that our own John Carl of Profit Cycle Pro and Gerardo Del Real of Junior Resource Monthly recently returned from a site visit to a small-cap copper miner with operations in Arizona that may be on the cusp of something truly revolutionary in the copper extraction space. 

Their comprehensive report on the company and the state-of-the-art extraction process is hot off the press... and is available to you right here. 

Like we were saying... much of the world’s current copper production is derived from highly unstable countries ripe with political strife. This timely opportunity is right here in North America.

Mike Fagan
Editor, Daily Profit Cycle