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.

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.   

 

  • Alan

    Sure we’re going to use much more copper as a result of the enhanced requirement for this electrical conductor but according to the International Copper Association, which represent a majority of global copper producers,based on geological surveys undertaken by US Geological Survey [USGS], in 2014, resources are far larger and include reserves, discovered and
    potentially profitable deposits and undiscovered deposits These undiscovered deposits will have to include the vast copper deposits found in deep-sea
    nodules and submarine massive sulfides. It goes on to say that current and future exploration
    opportunities will increase both reserves and known resources ensuring a 40-year horizon. The assertion that copper is becoming scarce must at best be challenged, if not on absolute terms but at least in terms of short-term investment opportunities.