Red, shiny, conductive, and scarce

Raise your hands all who are fed up with hearing about a copper shortage. I know I am, and yet the warnings keep flashing — to no avail whatsoever. The outlook for copper has gone from crystal clear to extra-murky in a matter of months. It has, in fact, become a true mystery, because the demand appears to be clearly there but efforts to secure the necessary supply are not forthcoming.

The situation is odd, to say the least, but, as usual, the oddity is on the surface only. In fact, there is a completely rational explanation and it has to do with the irrational. More specifically, it has to do with the irrational ambitions of the climate crusaders. The universe loves irony.

“I genuinely don’t see where all of this copper is going to come from at this point in time.” The statement comes from then new CEO of Anglo American, Duncan Wanblad, who in mid-2022 warned that the world was heading into a serious copper shortage. I dedicated some 2,200 words to gloating over the fact at the time. The strangest thing, however, is that since that warning — and many others — nothing has been done to change the sub-optimal state of affairs.

Of course, one reason is copper prices, which I addressed last year, although I swear it feels like yesterday. Prices, however, are not the only reason. There appears to be a monumental wall of reasons for miners to not be looking for copper growth opportunities and that wall is standing right in the way of trillions in transition investments planned, hoped for, and cherished by politicians, activists and Fatih Birol.

Incidentally, that wall could turn into money for copper investors with that rare quality kids call patience — and I mean copper, not transition investors. Because with or without the transition, copper demand will remain while supply becomes harder to get. The universe really loves irony.