While fashionable opportunities such as marijuana and cryptocurrencies have garnered most of the attention (and dollars) from investors over the past couple of years, such as CopperBank’s Gianni Kovacevic who anticipates the commodities needed to build renewable energy infrastructure will be grabbing most of the headlines for the next decade.
“Don Coxe used to say… never invest in the story on page one, that is the efficient market, invest in the story on page sixteen that will one day be on page one.
“Global investors will be the enablers of fulfilling the mainstream of that new sector in investment – commodities, and especially electrification enabling commodities like copper,” said Kovacevic.
The growing number of electric vehicles hitting roads is set to fuel a nine-fold increase in copper demand from the sector over the coming decade, according to an industry report by consultancy IDTechEx, commissioned by the International Copper Association (ICA).
Electric or hybrid cars and buses are expected to reach 27 million by 2027, up from three million this year, and analysts predict this increase will raise copper demand from 185,000 tonnes in 2017 to 1.74 million tonnes just a decade later.
Electric vehicles use a substantial amount of copper in their batteries and in the windings and copper rotors used in electric motors. A single car can have up to six kilometres of copper wiring, according to the ICA.
While this exciting, for some analysts, copper demand for EVs is just the tip of the iceberg.
Research from BMO Capital Markets says that renewable energy infrastructure is the biggest single driver of global demand growth for copper over the coming years, with the need to connect a significant numbers of small-scale electricity generation units into the grid providing a major boost to copper – with solar generation capacity set to triple and wind capacity double by 2025.
For Gianni Kovacevic – who will be speaking within the Future Energy stream of the International Mining and Resources Conference (IMARC) – these statistics are yet to hit home in many investment circles.
“There are going to be winners and losers in this pivot and most of the elements that make the generation, transfer and utility of electrification possible will be the buzzword investments of the 2020s.
“If you attend any major energy gathering, they talk about this; however, the word copper is not even mentioned. The incumbents just think there will always be enough of the red metal, whereas anyone in copper mining will tell you, without significantly higher, and sustainable prices there will not be the incentive to build the critically needed mines of the future,” said Kovacevic.
For more information visit https://imarcmelbourne.com/
The International Mining and Resources Conference is Australia’s largest mining event. Bringing together over 6,000 decision makers, mining leaders, policy makers, investors, commodity buyers, technical experts, innovators and educators from over 90 countries for four days of learning, deal-making and unparalleled networking. IMARC will run from 29 October to 1 November 2018 at the Melbourne Convention and Exhibition Centre.
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