According to Jorge Cantallopts, an executive director at the Center for Copper and Mining Studies in Chile, global copper demand is likely to stay strong even if pro-fossil fuel policies are implemented during US President-elect Donald Trump’s second term.
In a recent interview with Yicai, Cantallopts explained that copper is vital for both energy transition and traditional energy industries. He noted that although the rate of energy transition might slow down, the increasing need for copper will persist since its main application remains within the traditional energy sector.
Cantallopts stated, “A slower energy transition pace is not entirely bad for copper,” and emphasized that the industry should work towards increasing its capacity.
The demand for copper has risen in recent years due to advancements in energy transition, artificial intelligence, new energy vehicles, renewable energy sources like solar and wind, the expansion of data centers, and energy storage battery systems.
Cantallopts also mentioned that the effect of Trump’s potential new import tariffs on the global copper industry will largely depend on specific duties the United States might impose on Canada and Mexico.
“The connection between Canadian, Mexican, and US copper is quite strong since Canada and Mexico are key mineral suppliers for the US,” he stated. He added that raising tariffs would change the global copper dynamics.
Despite this, Cantallopts doesn’t believe the US will likely increase tariffs on Canadian and Mexican copper, as the country will need substantial mineral imports beyond what domestic companies can provide to enhance industrialization efforts.
Being the world’s largest copper producer, Chile will not be significantly impacted by potential new import tariffs, Cantallopts noted, expressing confidence in the Chilean metal market’s resilience.
Nonetheless, Chile faces multiple challenges in sustaining high copper production. Many Chilean copper projects are very old, affecting ore quality, noted Cantallopts.
“Most old mines are moving from oxide to sulfide operations, which are costlier because they require more water and energy,” he shared.
Foreign investment is pivotal for Chile’s copper industry, with 60 to 65 percent of production coming from overseas-operated projects. Obtaining long-term development permits, a lengthy and complicated process adds another challenge for the local industry.
On this matter, Cantallopts suggested the country needs to increase efficiency, not by 10 percent, but by 90 percent.
High environmental and social standards are crucial, but the country must also streamline project approval processes, he added.
“The interaction between mining firms and local communities is crucial to reducing wait times,” he said. “Though not legally required, it’s the communities that essentially approve new projects.”
Looking forward, Cantallopts sees opportunities for increased Chinese involvement in Chile’s copper mining sector, currently minimal. “At least two major Chinese firms are seeking mining opportunities in Chile,” he disclosed.
Cantallopts also highlighted the significance of Asia Copper Week, held annually in November in Shanghai, as the foremost forum for the global copper industry. He predicted that China would remain a dominant player in the global copper market for the next several decades.
