Introduction
Copper has increasingly become a strategic critical mineral for all nations. The metal has shifted from being a traditional industrial metal to a strategic backbone of the energy transition and digital economy. Recent analyses highlight to a widening gap between demand and supply, even after accounting for rapid growth in recycling. This report discusses copper’s surging demand, tightening supply, recycling, and implications.
Surging Copper Demand to 2040
Recent work by S&P Global projects global copper demand reaching approximately 42 million metric tons by 2040, driven by simultaneous growth in electric vehicles, renewable power, grid expansion, AI data centres, and defense applications. [1] This represents roughly a 50% increase from current levels, with copper embedded in the following:
- energy transition uses (EVs, batteries, solar)
- digital and AI infrastructure (data centres, telecom networks, computing)
- traditional sectors (construction, appliances, industrial equipment)
Further, UNCTAD’s 2025 Global Trade Update estimates that copper will grow by over 40% by 2040, emphasizing that this is a long-term structural trend tied to decarbonization as opposed to a short-term boom. [2]
Slowing Mine Supply and Declining Ore Grades
S&P Global estimates that even with planned projects and increased recycling, copper supply will reach only about 32 million metric tons by 2040, leaving a 10 million ton shortfall, which is an approximate 24% gap between demand and available metal. [1] UNCTAD similarly warns of a looming copper supply crunch that could stall both energy and digital transitions. [3] UNCTAD notes that new copper mines can take up to 25 years from discovery to production, which reflects complex permitting, community engagement, and infrastructure requirements. To close the gap, its 2025 report estimates that the world would need around 80 new mines and $250 billion in new investment by 2030 – a pace that is far above current project pipelines. [4]
Geological and geopolitical constraints also raise important issues. First, ore grades are declining. This means that more rock must be processed per unit of copper, raising costs and environmental pressures. Second, over 50% of global copper reserves are concentrated in just five countries (Chile, Australia, Peru, Congo, and Russia). This concentration increases exposure to localized political, social, and logistical risks. [3] Together, these factors make copper supply structurally slow to respond, even when prices rise sharply, as we have observed in early 2026.
The Growing but Limited Role of Recycling Copper
Though the recycling of copper is increasing, its effect on increasing supply is limited. UNCTAD’s recent analysis shows that secondary copper (from scrap and recycled materials) already accounts for nearly 20% of global refined copper output, with about 4.5 million metric tons produced from recycled sources (in 2023). [5] S&P Global forecasts that recycled copper scrap could more than double to around 10 million metric tons by 2040, reflecting improved collection, processing technologies, and policy support. [1]
Despite the growth in recycling copper, there are inherent limits. First, the availability of stock is an issue. Copper must first be installed in buildings, grids, vehicles, and equipment before it becomes scrap; this “in-use-stock” delays the flow of material back into the system. [4] Second, quality and contamination is a concern. Not all scrap is suitable for high-purity applications (i.e. advanced electronics, high-efficiency motors) without costly refining. [5] Third, there are geographic and policy barriers. Scrap generation and processing are unevenly distributed, with trade restrictions, tariff escalation, and limited infrastructure in some regions constraining global flows. [6] Consequently, even a doubling of recycled output still leaves a substantial primary supply requirement, reinforcing the need for new mines, expanding smelting capacity, and more efficient permitting.
Strategic Implications
Taken together, recent evidence points to copper as both an enabler and a bottleneck for the energy transition and digital transformation. There are three overall points to consider: 1) demand growth to 2040 is locked in by electrification and AI infrastructure; 2) mine supply is constrained by geology, concentration of reserves, and long development timelines; 3) though recycling is essential and growing, it cannot fully offset the structural shortfall.
For policymakers, this suggests that copper deserves treatment similar to other critical minerals, in that it is integrated into long-term industrial strategy, supported by streamlined permitting and ESG-aligned project development, and complemented by aggressive recycling and efficiency measures.
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Sources:
[2] UNCTAD, https://unctad.org/publication/global-trade-update-may-2025-critical-minerals-copper?utm_source=copilot.com
[3] UNCTAD, https://unctad.org/news/copper-supply-crunch-threatens-energy-and-digital-transitions?utm_source=copilot.com
[4] UNCTAD, https://unctad.org/publication/global-trade-update-may-2025-critical-minerals-copper?utm_source=copilot.com
[5] eTrade for all, https://etradeforall.org/news/unctad-urges-smarter-copper-trade-bottlenecks-threaten-global-transition?utm_source=copilot.com
Disclaimer:
This summary is based on publicly available information from company and government sources. It is provided for educational and informational purposes only. Though it has been taken to ensure accuracy, we make no representations or warranties of the reliability of the information.
Forward-looking statements, projections and estimates are subject to risks as outlined in the original company disclosures. Readers should consult official texts for full context. Nothing in the articles constitute forecasting, investment or financial advice. Please seek guidance from a qualified professional before making any investment decisions.
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