Market sentiment reveals most likely commodity winners as voted in a straw poll of 112 decision makers in the mining & metals sector: Copper voted most likely to outperform in 2025, followed by gold and lithium.
“Critical minerals in data centers: Transformers and updated electricity girds are two of the most critical mineral hungry aspects of AI. For example, copper and aluminium, as insulation, represents approx 50% of total expense of a transformer... Data centers, the backbone of Artificial Intelligence infrastructure, rely on a variety of critical minerals for their construction and operation, including copper: Essential for power distribution systems, networking cables, and cooling infrastructure due to its superior conductivity and durability... Supply chain vulnerabilities: The IEA warns geographical concentration of critical mineral production poses significant risks, for example: nearly 60% of refined copper comes from just three countries... This concentration creates vulnerabilities to supply shocks caused by trade restrictions, extreme weather events, or geopolitical tensions. Recent developments have exacerbated these risks... Our recent report on how the explosion of Artificial Intelligence it expected to spark a 10-year critical mineral supercycle as the massive energy needs of new AI data centers will increase pressure on global supply chains already under strain to meet global net-zero targets.“
“Copper supply shortfall: Global supply of copper, essential for a host of industries and crucial to green technology and the global energy transition, is expected to face a supply gap of nearly 10 million mt within the next ten years, according to our recent report “Copper, at the centre of the metal supercycle”. Years of underinvestment by producers means primary copper supply is ill-equipped to meet the approaching tidal wave of new demand. There aren’t enough mines, there aren’t enough near-term producers, there aren’t enough high-grade ore bodies. For example, Chile’s copper exports were at their lowest in 6 years in 2023, with warnings that output may fall further. By 2035, the copper supply shortfall could be as much as 9.9MMt, 20% less than what is needed to meet global 2050 net-zero goals. To put this figure in context, the biggest shortfall between 1994-2020 was 2.5%.“
“In 2021, Goldman Sachs declared copper “the new oil,” highlighting its essential role in clean energy technologies. Two years later, the IMF forecasted that copper demand will rise by over 66% from 2020 to 2040 as the world transitions away from oil. In this graphic, we illustrate how copper demand is projected to increase over the coming decades, while oil consumption is expected to decrease. The data was compiled by the International Monetary Fund as of October 2024. Rising Copper Demand: Copper is critical for a wide range of applications, including the electrical grid, electric vehicles (EVs), and renewable energy technologies. Beyond clean energy, copper is also extensively used in industries such as construction, infrastructure, and defense due to its unique properties. As a result, global copper demand is projected to grow from 25.9 million tonnes in 2023 to 39.1 million tonnes by 2040 under a net-zero emissions scenario that limits average temperature increases to 1.5°C above pre-industrial levels. Much of this growth is expected to come from the EV industry. Many components of battery electric vehicles rely on copper. On average, a standard EV contains 60-83 kg of copper, four times more than an internal combustion engine vehicle, which typically uses 15-20 kg of copper per car. Meanwhile, oil consumption is projected to decrease, dropping from 101.9 million barrels per day in 2023 to 66 million barrels per day by 2040. The decline in oil use is driven by global efforts to reduce carbon emissions and the growing adoption of renewable energy. Additionally, improvements in energy efficiency and policy regulations are further curbing oil demand.“
“Chinese Copper Inventories Post Record Weekly Drop: Copper inventories in China saw a record weekly drop, in a sign that demand in the top consumer is holding up well even as anxiety about a burgeoing trade war swirls. Inventories in warehouses monitored by the Shanghai Futures Exchange shrank by 54,858 tons, the most in data going back to 2003, to 116,753 tons, according to weekly figures released on Friday.“ (Bloomberg on April 25, 2025)
“Over the past three decades, the copper mining industry has experienced a significant shift in its approach to resource development and acquisition. The number of large copper discoveries has seen a sharp decline, while mergers and acquisitions (M&A) transactions have increased… The 1990s were a period of prolific copper discoveries. From 1990 to 1999, the industry recorded between 8 and 18 large copper discoveries annually, peaking in 1997 with 18 significant finds. The early 2000s also saw a steady pace, with between 7 and 15 discoveries annually until 2008. However, the rate of new discoveries began to fall dramatically after 2010. By 2018, no large discoveries were made, and in the following years, discoveries dropped to a trickle, with only 1 or 2 annually between 2019 and 2023. In 2023, the industry recorded no new large copper discoveries at all. This decline can be attributed to several factors, including the depletion of easy-to-find copper resources, increased exploration costs, and the growing complexity of discovering large, economically viable deposits. Furthermore, many of the world’s most prospective areas are already under exploration or extraction, leaving fewer untapped regions. As the number of large copper discoveries declined, the industry witnessed a growing trend in large copper M&A transactions.“ (MiningVisuals in November 2024)
“Over the past three decades, the copper mining industry has experienced a significant shift in its approach to resource development and acquisition. The number of large copper discoveries has seen a sharp decline, while mergers and acquisitions (M&A) transactions have increased… The 1990s were a period of prolific copper discoveries. From 1990 to 1999, the industry recorded between 8 and 18 large copper discoveries annually, peaking in 1997 with 18 significant finds. The early 2000s also saw a steady pace, with between 7 and 15 discoveries annually until 2008. However, the rate of new discoveries began to fall dramatically after 2010. By 2018, no large discoveries were made, and in the following years, discoveries dropped to a trickle, with only 1 or 2 annually between 2019 and 2023. In 2023, the industry recorded no new large copper discoveries at all. This decline can be attributed to several factors, including the depletion of easy-to-find copper resources, increased exploration costs, and the growing complexity of discovering large, economically viable deposits. Furthermore, many of the world’s most prospective areas are already under exploration or extraction, leaving fewer untapped regions. As the number of large copper discoveries declined, the industry witnessed a growing trend in large copper M&A transactions.“ (MiningVisuals in November 2024)
“There are plenty of charts stating that the world has plenty of copper – more than equal to global consumption now and in the foreseeable future. And it does… sort of. The world does have a lot of copper but the modest number of new discoveries in recent years isn’t down to smaller exploration budgets. According to S&P, industry-wide copper exploration budgets in 2022 increased 21% to just shy of $2.8 billion. That’s the highest level since 2014 but here’s the kicker: although reserves and resources grew by an estimated 50 million tonnes, the majority of those increases came from assets discovered in the 1990s. This problem has been a known factor for some time. As the chart [above] shows, a decade ago saw massive annual exploration budgets but little in the way of new copper. Put more simply, the era of cheap, high-grade copper is over.“ (The Oregon Group in 2023)
“In the evolving landscape of copper mining, deposits are increasingly challenging to locate and extract. As deposits are found deeper underground, accessing these resources becomes more costly and technically complex, ultimately impacting copper prices. To highlight this trend, Visual Capitalist partnered with BHP to show the depths and sizes of major copper discoveries found since 1900. This graphic shows copper discoveries with over 3 million metric tons of copper equivalent, based on data from MinEx Consulting and BHP up to 2022. The latest major discovery, made by Filo del Sol in 2020, lies 600 meters below ground and contains just over 11 million metric tons of copper equivalent. Andina Copper Camp, discovered in 1955 in Chile, holds a massive 144 million metric tons of copper equivalent, making it the largest deposit discovered since 1900. However, deposits of this scale near the surface are becoming increasingly rare. Notable discoveries like the Escondida deposit, found at a relatively shallow depth of only 40 meters in 1981, contrast sharply with newer, deeper finds like the Resolution deposit, discovered in 2002 at a depth of 1,280 meters. The Future of Copper Mining: This trend in recent copper discoveries highlights that copper mines are harder to develop than ever before. And while copper recycling is expected to play an essential role in meeting growing demand, it won’t be sufficient on its own, according to BHP. An emphasis on primary supply, along with technological progress that improves mine productivity, is crucial. Overall, BHP’s analysis estimates that a $250 billion investment in the sector is necessary in the next decade to overcome these challenges.“ (BHP im Dezember 2024)
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Rockstone Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell commodities. The author holds physical gold and silver, stored in Central Switzerland through Elementum International AG. The author does not hold any direct interests or financial instruments related to other commodities or companies mentioned in this article. All views and forecasts reflect the state of knowledge at the time of publication and are subject to change. There is no guarantee that future developments will unfold as described. Investing in commodities involves risks. Consultation with a licensed financial advisor is strongly recommended.
