United Nations warns looming copper shortage could stall global clean energy transition

The United Nations has warned that a copper shortage risks slowing the global energy and technology shift.

In a new note, the UN said the looming global copper shortage could stall the world’s transition to clean energy and digital technologies unless smarter trade and investment strategies are adopted.

UNCTAD, the UN’s trade and development body, believes copper is the “new strategic raw material” at the heart of the rapidly electrifying and digitising global economy, with director of international trade and commodities Luz María de la Mora saying that copper is no longer “just a commodity”.

Demand set to rise

UNCTAD warns that, with demand set to rise more than 40% by 2040, copper supply is under severe strain, leading to a possible bottleneck for technologies ranging from electric vehicles and solar panels to AI infrastructure and smart grids.

Estimates suggest the need for around $390 billion in investment and at least 80 new mining projects to meet projected demand by 2030.

However, developing new mines is a slow and expensive process that often takes up to 25 years, from discovery to operation.

Copper concentration

According to UNCTAD, just five countries – Chile, Australia, Peru, the Democratic Republic of the Congo and Russia – control more than half of the world’s known copper reserves.

The latest Resources and Energy Quarterly published by Australia’s Department of Industry, Science and Resources estimated that global mined and refined copper production would grow by 2.4% and 2.0%, respectively, in 2024.

The report sees this growth driven by a rise in production capacity, the start of new greenfield projects and increasing automation of certain production processes.

Value-added production

However, much of the value-added production occurs elsewhere, with China now importing 60% of global copper ore and producing over 45% of the world’s refined copper.

UNCTAD said many developing countries at the bottom of the value chain are unable to fully benefit from their resources.

“Digging and shipping copper is not enough,” the report states.

“To move up the ladder, copper-rich developing countries must invest in refining, processing and manufacturing—this means strengthening infrastructure and skills, establishing industrial parks, offering tax incentives and pursuing trade policies that support higher-value production.”