Copper prices must at least double to finance the mines the energy transition demands

Copper sits at the intersection of nearly every major infrastructure and energy technology. It carries electricity through power grids, winds through electric motors, connects telecommunications networks, and runs through the plumbing of hundreds of millions of buildings. The world currently mines roughly 23 million tons of it per year. By 2050, under conservative projections of normal economic growth, that figure will need to rise to approximately 37 million tons annually. A transition to 100 percent renewable energy and all-electric vehicles pushes demand to 91.7 million tons per year - nearly four times current production.

The obstacle is not the copper itself. The ore is in the ground. The problem is economics. A perspective paper published in Energy Research and Social Science, led by University of Michigan geologist Adam Simon, lays out the arithmetic: copper sells for approximately 3,000 per metric ton today. Developing a new mine in Mongolia costs 8,916 per ton of annual copper production capacity. A mine in Panama costs 1,318 per ton. In the United States, the figure is 9,614. The average cost across 26 mines expected to open by 2030 is 2,359 per ton of annual capacity.

At 3,000 per ton, those investment calculations do not work.

The capital math of opening a mine

Opening a copper mine is not a fast process. From initial discovery to first production typically takes 16 to 20 years, requiring sustained capital investment across geological surveys, environmental assessments, permitting processes, infrastructure construction, and plant commissioning. Investment decisions made today determine production capacity in the 2040s.

Mining companies assess new projects by calculating how much revenue a mine will generate over its operating life against the upfront capital required to build it. When the projected copper price is below mine development costs - as the current price is against most new projects - investors do not commit capital. Projects are shelved, feasibility studies are suspended, and supply pipelines thin out.

Simon and co-authors used industry reports, databases, and confidential merchant bank data to calculate development costs across a global sample of mine projects. Their conclusion: the price of copper must at minimum double - to around 6,000 per ton - to generate the investment returns that would incentivize broad development of new mines at the required scale.

"A near certainty is that copper price must rise substantially if mining rates are to meet as-usual expectations," Simon said.

Alternative sources fall well short

The researchers examined whether non-mining sources could close the supply gap. Recycling is projected to supply approximately 13.4 million tons per year by 2050 - roughly a third of what the standard-growth scenario requires. Mining low-grade ores and leaching copper from mine tailings could add approximately 4 million tons per year. Alternative materials such as aluminum and stainless steel can substitute in some applications, but each involves performance tradeoffs and, in many cases, higher production emissions.

All supplementary sources together cannot come close to meeting either demand scenario without a substantial expansion of primary mining - which requires prices that make new mines economically viable.

The development equity dimension

The paper draws attention to an often overlooked dimension of copper demand: basic infrastructure needs in low-income countries. High-income nations have already embedded roughly 441 pounds (200 kilograms) of copper per person in their built environments. In India and across much of Africa, the figure is less than 1 pound (about 0.5 kilogram) per person.

Economic development sufficient to raise living standards in these regions will require enormous copper quantities for electricity distribution, telecommunications, air conditioning, plumbing, and industrial equipment - irrespective of any clean energy transition. The copper deficit is not only a climate technology problem; it is a development problem affecting the most vulnerable populations directly.

The paper also argues that permitting reform is necessary. Even if prices rise sufficiently to attract investment, current regulatory timelines for mine approvals - often a decade or more in major copper-producing jurisdictions - mean that investment decisions made now will not translate into production until the 2040s. Streamlining permitting without compromising environmental and community protections could shorten the lag between price signals and new supply.

"The world is not running out of copper; it is running out of time to produce it. Getting it out of the ground fast enough to meet rapidly growing demand will require immense political prioritization and broad public support for mining," Simon said.

The paper is a perspective piece drawing on existing industry data. Demand projections for 2050 carry significant uncertainty depending on economic growth rates, technology adoption, and substitution patterns. The 6,000 per ton threshold is a minimum estimate; actual requirements may be higher depending on which deposits need to be developed and where they are located.