BHP, the nation’s largest miner, expects demand for copper to double and nickel to quadruple by 2050 as faster rollouts of electric cars, solar panels and wind farms use up more of the metals.
As governments across the world set targets for net-zero carbon emissions and unleash “green” post-coronavirus stimulus packages, BHP and other miners have revised their internal forecasts for electric vehicle penetration and demand for the key battery ingredients.
Ragnar Udd, BHP’s head of mining operations in the Americas, said policy signposts for rapid electric vehicle adoption were “distinctly favourable” over the past 12 months.
“These vehicles use four times as much copper as petrol-based cars, and they will also need more infrastructure to connect charging stations to the grid,” Mr Udd said in a speech at the World Copper Conference in Chile.
“This example highlights the essential role resources will play in the transition to renewable energies.”
Copper, used in a wide range of applications including wiring, pipes, batteries and motors, is both an economic bellwether and an essential ingredient for renewable power generators and electric vehicles. Copper prices have surged to their highest in almost a decade and are trading above $US4 a pound.
Commonwealth Bank commodities analyst Vivek Dhar said global growth hopes tied to the rollout of COVID-19 vaccines, the prospect of heightened infrastructure spending in the United States and increased spending on decarbonisation efforts, including electric vehicles, were helping drive up prices.
“Renewable power systems are also five times more copper-intensive than conventional power systems,” he said.
As BHP looks to clean up its portfolio by seeking to sell several coal mines, quit thermal coal and exit the Bass Strait oil and gas fields, it has also laid out plans to lift exposure to nickel and copper, two metals that it believes will be in high demand as the need of its customers evolve.