Modern Mining August 2023

COMMODITIES OUTLOOK

Green innovation drives copper demand By Colin Bennett: Market Intelligence Director at the International Copper Association

A s green technologies like electric vehicles (EVs) continue to drive copper demand, new research on the automotive market, copper substitution and miniaturisation, commis sioned by the International Copper Association (ICA), sheds light on expected trends for the industry. While the world races to meet its net-zero carbon commitments, and consumers and investors increasingly look to clean technolo gies, the need for green solutions is on the rise. Due to its natural conductivity and energy efficiency, copper plays a significant role in the green transition. Applications that have the poten tial to abate up to two-thirds of global greenhouse gas emissions—from electric vehicles (EVs) and infra structure to renewable energy—rely on copper. As the need for these technologies increases, global copper demand is projected to double by 2050. Key segments, such as the automotive market, are a microcosm of this broader trend, with innovations in electric and autonomous vehicles amplifying copper demand in the sector. For example, research com missioned by the International Copper Association (ICA) and conducted by IDTechX suggests that by 2040, vehicle-driven copper demand is expected to increase by 143 percent from 2020 levels. Questions surrounding the ability to meet this growing demand have raised additional inter est around market drivers for copper applications, particularly in relation to substitution and miniaturi sation trends. Additional research commissioned by ICA has estimated that while substitution rates

Colin Bennett: Market Intelligence Director at the International Copper Association. (Source: International Copper Association) .

are expected to stabilise in 2023, miniaturisation is on the rise. However, while cost has often been the determining factor in these trends, it is no longer the only one, with system optimisation becoming a key component in determining an application’s mate rial of choice. Copper’s role in the green transition, coupled with a shifting focus to system optimisation, indicates that copper will continue to be an essential material to modern society long into the future. Copper and the automotive market ICA-commissioned research conducted by IDTechEx demonstrates the impact of the accelerating shift to electrification. IDTechEx expects copper demand from autonomous and electric vehicles will increase to six million tonnes annually by 2040. EVs contain approximately 2.5 times more cop per than an internal combustion engine (ICE) vehicle, which contains an estimated 23 kgs of copper. This is largely due to the copper found in the copper rotor induction motor, although the material can be also found in the wiring looms, winding wire, foil and bus bar and power cables. To determine the key sources of expected copper demand in the automotive mar ket, IDTechEx researched more than 30 components across five powertrain variants and four variations of autonomous vehicles. The study showed the low voltage wiring loom is predicted to account for more than 50 percent of copper demand through 2040. Additionally, the largest projected sources of vehicle driven copper demand by 2040 include low voltage wire harness (39 percent), the lithium-ion battery (29 percent) and the electric traction motor and power electronics (17 percent).

Source: IDTechEx research

10  MODERN MINING  August 2023