Western Economies Struggle to Diversify Copper Supply Chain from China
- Efforts from Western economies to diversify away from China's copper supply chain could raise costs and delay the energy transition.
- Wood Mackenzie warns that replacing China in the copper supply chain is 'unfeasible'.
- The West faces challenges in transitioning its reliance from China for copper supply.
As Western countries strive to reduce their reliance on China for copper, a new report from Wood Mackenzie highlights the complexities involved in this transition. The mining expert emphasizes that while supply chain risks can be mitigated, completely replacing China's role in the copper supply chain is "unfeasible." This is particularly concerning as copper is essential for emerging technologies, including renewable energy and electric vehicles, which are critical for the global energy transition. The report indicates that current mining operations and projects under construction will only satisfy 80% of the projected copper demand by 2030, raising concerns about potential shortages. Although the rest of the world possesses sufficient primary mine supply, it lacks the downstream processing and manufacturing capabilities that China dominates. This discrepancy complicates efforts by the U.S., Canada, Australia, and European nations to displace China's influence through subsidies and investments. Nick Pickens, Wood Mackenzie's research director, stresses the importance of considering the entire copper supply chain, not just mining. Since 2000, China has accounted for 75% of global smelter capacity growth and approximately 80% of new copper fabrication capacity since 2019. Without China's involvement, significant increases in processing capacity would be necessary to meet energy transition goals, underscoring the challenges faced by Western nations in their diversification efforts.