Copper demand is forecast to increase significantly as demand for electric vehicles surges to 140 million by 2035 from about 1 million today, Danny Malchuk, president of operations at BHP’s Minerals Americas division, said last week. “We want more copper resources in our portfolio. And we believe the most valuable pathway to achieving this is through exploration, the drill bit,” added Malchuk, speaking at a Bloomberg forum.
It’s estimated that while cars with internal combustion engines require up to 23 kg of copper each, a hybrid vehicle uses 40 kg — nearly double that amount. Malchuk said electric vehicles could require even more copper as they evolve — up to 105 kg per vehicle. That translates into 12 Mt of copper, or more than half of the current global market for refined copper.
At the same time, ore quality from major mines such as BHP’s Escondida, the world’s largest copper mine, are starting to deteriorate. There also haven’t been any major copper discoveries in two decades, and power and water constraints could also put pressure on copper producers.
In September, BHP said the electric car boom is at a “tipping point,” and due to the factors mentioned above, the company believes copper miners will be the first metal producers to feel the impact.
Betting on exploration to meet this soaring demand, BHP has kept its budget steady at around $60 million annually over the past five years, while other companies have made cuts. Its current portfolio consists of 79 projects covering 1.8 million ha.
Malchuk said the company is aiming to find large, long-life deposits through alliances with junior explorers, data analysis, partnerships with universities and diversification into less mature copper territory.
“As BHP our thresholds are very high — we don’t settle for the regular Joe type of copper mine. We go for the big stuff,” he added, mentioning that Ecuador, Chile, Peru, the southwest of the US and Australia are some of the places where the company is currently exploring.
The picture shows BHP’s Spence mine in Chile
