Categories: Stock Market
Topics: Precious Metals

This Breakthrough in Copper Extraction Changes Everything

Copper is “THE” metal of electrification… making it absolutely essential to the global energy transition.

The billion-dollar question is… will there be enough of the red metal available to meet growing demand?

The amount of copper needed for the world to attain net-zero emissions by 2050 would require more copper production, in a relatively short period of time, than the world has ever witnessed.

The problem is... the last major copper investment cycle occurred way back in the 1970s when there were still plenty of large-scale, high-grade copper deposits to be found!

And while the sector is presently entering a period of increased greenfields exploration, new copper discoveries of merit are proving extraordinarily difficult to come by and are falling woefully short of compensating for the precipitous decline in ore grades from established mines.

In other words... most if not all of the “easy” copper deposits around the globe have already been found, and the vast majority of the easy-to-reach high-grade ore has already been scooped up. 

Another major roadblock to bringing new supply online is the exorbitant amount of time required for bringing a new copper mine from discovery to production.

We’re talking 10-plus years from the time an economically viable copper resource is discovered all the way through the various stages of feasibility, permitting, and mine construction.

And that’s assuming each process goes smoothly, which, as anyone involved in mining knows, is very rarely the case. 

Disruptions in major copper-producing countries have been in the spotlight as well in recent years, particularly in Peru — the world’s #2 copper producer — which has been beset by worker strikes and large-scale community protests.  

Moreover, much of the world’s known copper reserves are situated in high-risk mining jurisdictions such as the Congo and Inner Mongolia… not exactly the kind of places major mining companies prefer to be setting up shop.  

All of these factors are combining for what many experts predict will be a protracted copper shortfall that could last for decades. 

In viewing the 5-year copper price chart below, we can see that the overall price trend for the red metal has been bullish since 2020. 

We witnessed a bit of a pullback in the first half of this year with prices temporarily retreating from a peak of around US$4.30 per pound in mid-January to an interim low of about US$3.60 per pound in late-May. 

Yet, with the market now realizing that a large copper deficit is looming in the not-too-distant future, prices have since begun to inch back up toward the US$4/lb range and could soon be well on their way to US$5-plus. 

Commodities, and metals in particular, are typically beset by short-term cyclical price volatility. Yet, the longer-term outlook for copper remains exceedingly bullish as higher prices will be required to incentivize new exploration and project development, globally. 

As alluded to, copper demand is set to undergo a generational shift as decarbonization efforts ramp up across the globe in an effort to attain net-zero.  

Al Chu, lead portfolio manager at BNY Mellon, says, “Copper is typically used as a construction metal for wiring for building, wiring for machinery and what not, but if we look at the decarbonization net zero energy transition trend, copper is the new oil.”

When it comes to electrifying something and transmitting electricity — you need copper, plain and simple. And that means everything from wind and solar power generation and the much needed revamping of electrical grids to EVs and consumer electronics.  

For example, EVs require up to 175 lbs of copper per vehicle, which is roughly 4X the amount used in a typical combustion engine vehicle. 

Wind energy requires on average 2,000 tons of copper per gigawatt. Solar needs even more; about 5,000 tons of copper per gigawatt.

And while recycled material plays an important role in copper stockpiles, there is no current methodology for the economic retrieval of the metal from the billions of tons of low-grade waste rock scattered around the world’s past and present copper mining operations.

Or is there?!

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.

Mike Fagan
Editor, Daily Profit Cycle