Forget rare earth elements; the real need is for more copper.
In the past few weeks, there's been a lot of talk about rare-earth elements, partly due to President Trump's stalled mineral deal with Ukraine and his interest in Greenland. These elements are crucial for the renewable energy and electric vehicle sectors. However, experts are raising alarms about a shortage of another essential metal: copper, which is vital for electronics, wiring, and plumbing.
Copper is arguably more critical to the transition to a greener economy than rare earth metals like neodymium. Although copper mining has a long history, demand has skyrocketed in the last 20 years, pushing prices up by nearly 75% since 2020. Major copper-producing regions like Chile, Peru, and the Democratic Republic of the Congo are struggling to keep up with demand while facing environmental challenges.
Cassandra Cummins, CEO of Thomas Instrumentation in New Jersey, has had to adjust to the rising cost of copper used in the circuit boards her company produces. While rare earth minerals are part of the microchips, copper makes up about 90% of a circuit board. For instance, LEDs use a small amount of terbium for their green light, but the bulk of the board is copper. "Without copper, we can't produce our boards," she explains.
The increased cost of copper has led to higher prices for Thomas Instrumentation's products. "We have to raise prices, and we apologize for that," Cummins says. This issue is expected to worsen, with a report from S&P Global attributing the copper shortage to underinvestment in new mines and exploration due to a focus on short-term gains.
BHP, a mining and metals company based in Melbourne, predicts that by 2035, existing mines will produce 15% less copper than in 2024. The quality of copper ore has also declined by about 40% since 1991. "Most of the high-quality ore has already been extracted," says Mike McKibben, a geology professor emeritus at the University of California, Riverside. "We're now targeting lower-grade material, which is more costly to mine and process."
This situation is likely to lead to higher prices and unmet demand, according to Shon Hiatt, a business professor at the University of Southern California. "In the next 20 years, we will need as much copper as has been produced throughout history," he predicts.
Recycling helps alleviate some supply issues, but it's not enough. Only about a third of the copper used in the U.S. comes from recycled sources. The U.S. imports half of its copper, mainly from Canada and Mexico. Copper could become entangled in trade disputes, as President Trump has ordered an investigation into copper imports from Canada, and Commerce Secretary Howard Lutnick confirmed plans to impose tariffs.
Opening new mines is challenging. China recently began developing a copper mine in Afghanistan after 16 years of delays. In the U.S., environmental and social concerns, along with lengthy permitting processes, complicate new mining projects. Simon Jowitt, director of the Nevada Bureau of Mines and Geology, notes that mining has a poor environmental reputation, particularly large-scale open-pit mines.
Stuart Burgess, chairman of Burgex Mining Consultants, says there's growing interest in copper mining in the U.S. He points out that electric vehicles require four times more copper than gas-powered cars, and upgrading the power grid for EVs will further increase copper demand. "Even with all known deposits, we might only meet half the demand by 2050," he says.
Efficiencies can be found, but they are limited, Burgess adds. "There's no magic solution to double copper output from the same input," he says. Developing new copper sources can take over a decade, and success isn't guaranteed. The Resolution Copper Mine in Arizona has faced a lengthy legal battle involving three presidents due to concerns from Native American tribes. Other proposed mines in Arizona and Minnesota have also encountered significant delays.
The ore at Resolution is deep underground, making extraction three to four times more expensive, Burgess explains. Even if new mines are developed, the U.S. only has two copper smelters, both operating at full capacity. "We lack the smelting capacity to process new copper," Jowitt says. "Even with new mines, we need more processing facilities."
Currently, Canada has been a key partner in copper processing, but trade tensions could disrupt this relationship. "We're risking our ties with countries that can process copper," Jowitt warns. "Having a mine is just one step; we need processing before copper can be used in wiring, vehicles, and other applications."