U.S. copper may be about to see a return of the good times.
Electric cars need twice the copper used by internal combustion-powered cars. So before they take over the streets, miners must first extract more from the ground. At the same time, other renewable energy technologies, from wind generators to battery storage units, also need copper to function.
So investors have sunk $1.1 billion into U.S. copper mines, Reuters reports, and the first new projects in more than a decade are slated to begin operations in 2020.
That investment may help turn around a longer-term decline in U.S. copper mining production. Last year U.S. and Canadian production were both down (around 3.5% and 11%, respectively) relative to 2017, according to the latest International Copper Study Group (ICSG) data. While Europe had flat production, the ICSG estimates that global production through October 2018 was up 2.4%, thanks to growth in Chile, the world’s leading producer, and in Indonesia, another major producer.
Trade war fears held back copper’s performance in 2018, according to a December poll of industry executives. “The transition to electric vehicles, alternative energy and battery metals may slow down, but it won’t stop, and copper is a primary metal to make all that happen,” told Copper Investing News.
American mining company Freeport-McMoran sold its majority stake in an Indonesian mine under pressure from the government and instead plans to invest $850 million in an Arizona copper mine.
Nevada Copper is also planning a pair of projects near Reno slated to begin late this year.
All told, the ICSG estimates 8% production growth in the U.S. in the next four years.