Theme of the Day: America’s Copper Hunger Increasingly Hard To Feed

In a study published in July 2022, researchers at S&P Global projected a “looming mismatch” related to global supply and demand for copper, a critical energy metal integral to meeting the world’s energy needs. The future of copper was coming at us fast, and recent events indicate a potential crisis could well be arriving ahead of schedule.

As part of his administration’s efforts to incentivize major new investments in the US mining sector, President Donald Trump said on July 8 that he will impose a 50% tariff on copper imports effective August 1. “I am announcing a 50% TARIFF on Copper, effective August 1, 2025, after receiving a robust NATIONAL SECURITY ASSESSMENT,” Trump wrote in a post on Truth Social. “Copper is necessary for Semiconductors, Aircraft, Ships, Ammunition, Data Centers, Lithium-ion Batteries, Radar Systems, Missile Defense Systems, and even, Hypersonic Weapons, of which we are building many. Copper is the second most used material by the Department of Defense.” For the Pentagon, the current situation in which the US imports roughly 45% of its daily copper needs (per US Commerce Department data) this represents a national security risk even though most imports originate in Chile and Canada.

But, as S&P Global’s study points out, access to adequate copper supplies is crucial to the energy sector, too, especially if the stalling energy transition is to continue in any meaningful way. Copper may well be even more crucial to meet the enormous electricity needs for AI and data centers and the Pentagon’s rising needs due to beefed-up military spending.

Due mainly to its relative abundance and high degree of conductivity, copper has been a preferred metal in electricity applications since the days of Nikola Tesla and Thomas Edison. In its study, S&P Global describes copper as “the metal of electrification,” adding that “Unless the impending supply gap for ‘the metal of electrification’ is closed in a timely way, Net-Zero Emissions by 2050 will be short-circuited and remain out of reach.”

Timelines For Copper Mines Are A Major Roadblock. The first Trump administration in 2017 saw repeated attempts to streamline federal permitting processes, to little effect. Trump and his key cabinet officials - Lee Zeldin at EPA, Chris Wright at the Energy Department, and Interior Secretary Doug Burgum - have permitting reform at the top of their agenda, too.

Most discussions around copper, critical energy minerals, and domestic mining over the past half-decade centered on the needs of the government-subsidized energy transition. The discussion around copper and mining for it must refocus on how America will be able to keep the lights on and the electrons flowing in the coming years. It is a complex question with no easy answers.