Copper: now a precious metal

We usually think of gold and silver, and sometimes platinum and palladium, as precious metals: they are rare, or seen as alternative currencies, or both. But "increasingly, copper is a precious metal" too, says Alan Livsey in the Financial Times.

Copper is becoming scarce. The yield of copper from each unit of ore mined is dwindling. In 2010 the 15 top producers' reserves boasted an average yield of 1.2%. By the end of 2016, the figure had fallen to 0.72%. Miners are therefore scrabbling to locate new supplies.

On the demand side, the latest fillip stems from the car industry. The electric Tesla Model S requires three times more copper wiring than an internal combustion engine, says Frank Holmes of US Global Investors on BusinessInsider.

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up for MoneyWeek’s free twice-daily newsletter.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Sign up

More broadly, as the rapidly growing middle classes in emerging markets stock up on goods such as smartphones, cars, dishwashers and air conditioners, the world will need a lot more electricity and copper is one of the most conductive metals. The deficit in the copper market may not dissipate in a hurry.