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annemarie.roodbol_55989 Oct 28

DRC copper: Pivotal in the electromobility transition

DRC copper: Pivotal in the electromobility transition image
DRC copper: Pivotal in the electromobility transition
The Democratic Republic of Congo (DRC) is expected to play a central role in the electromobility transition as a critical supplier of this ‘green metal’.
Copper production from the central African country, which currently sits at just over 1.2 Mtpa, is forecast grow to well over 1.6 Mtpa over the next five years on the back of several new projects.
This would far surpass Zambia’s forecasted copper production levels, which are anticipated to remain below 1 Mtpa over the same period. This is the view of commodity research firm CRU Group senior base metals analyst HAMISH SAMPSON, a panellist on a DRC Mining Week webinar session held in July. CHANTELLE KOTZE reports.

Despite a slump in copper demand during February and March 2020 as the COVID-19 pandemic spread across China, Sampson notes that the China’s copper demand has since rebounded more strongly than expected.

While the pandemic dragged Chinese refined copper demand down by 20% year-on-year in Q1, 2020, with prices falling below $5 000/t, leading to copper production cutbacks on the back of this; Q2, 2020 saw China roaring back at a much faster rate than expected.
This has helped propel the copper price back up to around $6 000/t – where it was at the start of the year before the onset of COVID-19, says Sampson.

Electric vehicle fundamentals to sustain long-term copper growth

Forecasts show that copper demand from China – which has been the major contributor to almost all commodity demand over the past few decades – is expected to plateau from the middle of this decade and could even slide quite sharply in the next decade.
According to Sampson, the developing world is expected to sustain copper demand over the long-term, driven mainly by copper demand from the electric vehicle (EV) market.

While the transport sector only accounts for about 10% of copper demand, the e-mobility transition is expected to give rise to additional copper demand. By way of example, internal combustion engine vehicles only consumes 20 kg of copper per vehicle, increasing to 30 kg in a hybrid electric vehicle and 80 kg in a full battery electric vehicle.
With EV sales forecast to increase from around the middle of this decade, Sampson notes that EV related copper demand could increase to approximately 4 Mtpa by the end of 2035.

Long-term supply

With increasing demand for copper demand in future, there is a risk that this won’t be met with sufficient supply, without a healthy project pipeline. According to Sampson, the DRC is set to make an important contribution to global future copper supply with several possible projects in the pipeline, in particular Ivanhoe Mines’ Kamoa-Kakula copper project.
Having said that, Sampson notes the need to address political, legislative and infrastructure risks to ensure that projects can be discovered, developed and successfully brought into production.

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