Portugal´s potential for Copper in the Energy Transition Age
The Emergence of Copper
As the world accelerates to the energy transition, copper emerges as a key mineral that fuels the green revolution and redefines the global economic map. As the world seeks to reduce its dependence on fossil fuels, copper is being positioned as an essential material for electrification and renewable technologies, becoming the “new petroleum” of modern economies.
The growing relevance of copper is due to its crucial role in green infrastructure, such as electric vehicles, smart grids and renewable energy generation. According to a report from the International Monetary Fund (IMF), demand for this metal will increase by more than 66% between 2020 and 2040, going from 23.5 million tons to 39.1 million tons.
This transformation reflects a structural change in global consumer spending, driven by international commitments to reduce carbon emissions and limit global warming to 1.5°C above pre-industrial levels.
Energy Transition
The growth in demand for copper responds not only to energy transition but also to geopolitical and technological factors. The tensions in Europe and the Middle East, together with the increase in investment in defense, have increased the demand for this metal for the manufacture of military projects and equipment.
The leading role of copper in the energy transition is explained by its versatility and efficiency in electrical conduction. This metal is essential for the manufacture of electric vehicles, which require between 60 and 83 kilograms of copper per unit, four times more than a conventional automobile. Also it is key to the construction of solar panels, wind turbines and intelligent electrical networks, fundamental pillars of change towards a sustainable energy model.
Furthermore, artificial intelligence (AI) is significantly boosting the demand for data centers. AI workloads, especially those involving deep learning and large-scale model training, require massive amounts of computational power, storage, and bandwidth. As a result AI is driving more copper consumption as well.
According to Bloomberg data, China on the ground is the largest consumer, but also one of the main stockholders. In March 2024, global copper stocks reached 491,000 metric tons, the highest level in three years, with a large part concentrated in Chinese inventories. China accounts for more than 50% of demand in the world copper market.
The rise in global demand has led to copper prices reaching record levels. In May 2024, the London Metals Exchange (LME) recorded an intraday price of 11,460 dollars per metric ton, driven by limited supply and consumption pressure. At an international level, copper prices will continue to be subject to the dynamics of supply and demand. Financial Times analysts suggest that the price could quadruple to 40,000 dollars per ton due to the depletion of world reserves and its growth in electrification.
Potential for Tailing Mining
Despite optimism, copper supply faces multiple challenges that could limit its ability to satisfy future demand. Among them, it highlights the lack of new mines in operation, combined with a number of keys. Furthermore, geopolitical tensions, environmental restrictions and labor shortages have reduced production in several producing countries.
According to a study by S&P Global, the gap between supply and demand could generate a deficit of 10 million metric tons of copper by 2035. To close this gap, around 80 new mines would be needed, which would imply massive investments. However, the long development times, (which in average takes 23 years) as well as the growing social opposition to the mining industry are making it difficult to materialize these projects.
This creates a substantial business opportunity for Portugal. The Iberian Peninsula, which includes both Spain and Portugal, has a rich mining history, and over the centuries, numerous mines have been abandoned due to economic changes, resource depletion, or the transition to modern mining techniques.
Therefore the opportunity in Tailing Mining is astonishing. Tailing mining not only offers environmental benefits with its remediation approach as opposed to traditional mining but also a significant economic opportunity where the new technology advances can recover more materials at a lower cost, making them attractive for re-mining.
Although getting an exact number is tricky, estimates suggest there could be around 200 abandoned mines sites across Portugal, with potential for Tailing. Recoverable minerals may include Gold, Silver, Nickel, Bauxite, Cadmium, Chromite, Cobalt, Manganese, Tungsten, Antimony and others, but Copper recovery potential remains staggering.
In the midst of this panorama, Portugal’s Mining Tailings present a valuable opportunity to shape the energy transition, contributing to both economic development and environmental remediation, driving the change towards a sustainable economy.
Want to know more on how Portugal can play this role ? Get in touch with The Venture Builder and discover how we can help!
Carlos Cortes
The Venture Builder