IEA Warns of Copper Supply Deficit: New Mines Needed to Meet Surging Demand

USA News Group – One of the biggest threats to the ongoing energy transition is the world’s ongoing copper shortage that’s set to get worse. As demand for the red metal continues skyrocketing, the International Energy Agency (IEA) predicts that existing mines and projects under construction will meet only 80% of copper needs by 2030, which is concerning as opening a single copper mine typically takes 23 years. With the world’s two most prolific copper producing countries coming from Latin America, sociopolitical threats to the mining industry in the regions persist in Chile and Peru respectively. Hedge fund manager Pierre Andurand is predicting the price of copper to quadruple to $40,000 per tonne in the next few years, while Goldman Sachs also predicts record copper prices by the end of 2024. These factors are driving calls supporting development of more domestic mining to bolster secure supplies, as the market pays attention to copper miners such as Rio Tinto Group (NYSE:RIO), BHP Group Limited (NYSE:BHP), Lundin Mining Corporation (TSX:LUN.TO) (OTC-Pink:LUNMF), Southern Copper Corporation (NYSE:SCCO), and newcomer Yukon Metals Corp. (CNSX:YMC.CN) (formerlyCSE:JKS).

With the IEA predicting global copper demand to surge twentyfold by 2040, the importance of projects being developed today becomes clearer. Wasting no time getting into the copper race is Yukon Metals Corp. (CNSX:YMC.CN), which begins trading under a new name and symbol with an impressive premium-quality portfolio acquisition built on over 30 years of prospecting by the Berdahl family—the prospecting team behind Snowline Gold’s portfolio of primary gold assets.

“Completing the acquisition of these high-quality exploration assets in the Yukon marks an exciting beginning for Yukon Metals,” said Rory Quinn, President and CEO of Yukon Metals. “We have tremendously exciting properties that we’ll work to responsibly and systematically advance, from copper-gold and silver-lead-zinc, to precious metals focused assets. With a healthy treasury after raising in excess of C$15 million, a comprehensive exploration database

and key permits already in place, we are ready to hit the ground running!”

Yukon Metals acquired a comprehensive portfolio of high-quality exploration assets from the Berdahl family’s private prospecting company, 18526 Yukon Inc. This diverse collection includes a range of copper-gold and silver-lead-zinc properties with significant gold and silver components.

Notable projects within the portfolio include the AZ, Barite Mountain, Birch, Carter Gulch, Clea, Eva, Expo, Faro North, Fox, Gem, Star River, Nut, Pete, Risby, Talbot, and Venus claims, covering approximately 18,000 hectares in the Yukon. These assets are supported by substantial historical data and modern exploration permits, positioning Yukon Metals for immediate and systematic exploration efforts aimed at advancing these promising properties toward discovery.

The Expo property in the Finlayson VMS district has extensive historic data and a secured exploration permit, making it a prime target. The AZ property shows promising copper, silver, and gold mineralization with high historic assay values. The Birch and Talbot properties feature significant gold-in-soil anomalies and high-grade assay results for gold, silver, and copper. The Star River project, notable for its road accessibility and historic high-grade silver and lead showings, offers substantial exploration potential. Lastly, the Nut property, located in the Mayo plutonic belt, has shown promising initial results with gold and copper, indicating significant discovery potential.

“I am honored to lead an experienced and knowledgeable team and look forward to announcing important appointments and news in the coming days and weeks,” said Quinn. “I look forward to building value for all stakeholders as we advance exploration toward discovery.”

With a class action lawsuit pending in Papua New Guinea, mining giant Rio Tinto Group (NYSE:RIO) has signalled it will prioritize developing new copper mines over acquiring new ones to achieve its goal of producing one million tonnes of copper annually within the next five years. According to Rio Tinto’s Chief Commercial Officer Bold Bataar, most of the planned output expansion will be driven in Mongolia, Utah and other global exploration efforts including a partnership with Chile’s state-owned Codelco, the world’s largest copper producer.

“For us, the focus is organic growth, supply growth and where in projects can we partner rather than necessarily acquiring an existing production,” said Baatar to reporters in Santiago at the CRU World Copper Conference. “Just bringing one and one together doesn’t add more copper. The key question is how can we bring more supply.”

Coming off of dropping its proposed US$42.7 billion takeover bid of rival Anglo American, experts now BHP Group Limited (NYSE:BHP) is set to target Rio Tinto, the world’s second largest metals and minerals miner. BHP’s Asset President Copper South Australia, Anna Wiley, is now set to be the opening keynote speaker at the highly anticipated Copper to the World 2024 event being held in South Australia later this month.

After the saga with Anglo American comes to an unsuccessful close, it’s clear that BHP’s appetite for adding more copper to its portfolio continues. Analysts at Macquarie predict that BHP's copper output will peak at around 1.9 million tons in 2026 before gradually declining to approximately 1.6 million tons by 2028, accompanied by rising costs. This decline is primarily driven by a projected drop in production at the Escondida mine, which is expected to decrease from a peak of about 1.3 million tons in 2025 to around 900,000 tons in 2028.

After Argentina’s new government rolled out the red carpet for miners, Lundin Mining Corporation (TSX:LUN.TO) (OTC-Pink:LUNMF) is among the global mining heavyweights working closer than ever to opening up vast copper deposits in the Andes. Later this year, Lundin Mining is aiming to obtain a tax stability agreement for its Josemaria copper project in San Juan, Argentina. Last year, Lundin successfully closed on the acquisition of a majority interest in the Caserones Copper-Molybdenum Mine in Chile, so adding more in a more favourable tax jurisdiction in Argentina presents a compelling option. However, Lundin is also setting targets for Caserones and is waiting to expand its existing Candelario mine, according to a report from Reuters.

"Our strategic acquisition of a majority interest in the Caserones copper mine continues to drive revenue and production growth,” said Jack Lundin, President and CEO of Lundin in the company’s Q1 2024 financial results report. “First quarter revenue and copper production increased 25% and 43%, respectively, compared to the same quarter last year, and was in line with our expectations. Production at Candelaria will be second half weighted due to higher grades as a result of planned mine sequencing. We remain on track to meet our annual production and cash cost guidance."

In Peru, Southern Copper Corporation (NYSE:SCCO) is reportedly eyeing the start of its stalled Tia Maria project later this year, with mining potentially to begin in the second half of 2027. Despite having held permits to build the Tia Maria for years, Southern Copper has been held back because of environmental opposition, after a 2019 decision to approve the license resulted in weeks of protests, leading to then-President Pedro Castillo backtracking. Now the current government is saying it’s supportive of moving forward.

“The opportunity that this presents for the region and the country is being seen,” said Chief Financial Officer Raul Jacob in an interview. Bringing Tia Maria online by the end of 2027 would provide an essential boost of 120,000 metric tons of metal annually.

Bringing Tia Maria online would consolidate Southern Copper’s annual copper production above a million tons a year. As well, the project would be a major breakthrough in a country where mining’s relations with isolated rural communities tend to turn antagonistic.

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