BHP warns of copper shortage amid AI and EV demand surge
- BHP Group warns of a potential copper shortage due to rising demand from major tech companies investing in AI.
- Global copper demand is expected to increase by 3.4 million tonnes annually by 2050, reaching 52.5 million tonnes.
- A copper crisis could significantly impact industries crucial for zero-emission targets and lead to a projected four million tonne deficit by 2030.
BHP Group has raised concerns about a significant copper shortage as major technology companies ramp up investments in artificial intelligence. The CFO of BHP, Vandita Pant, indicated that the demand for copper could surge by 3.4 million tonnes annually by 2050, driven by the expansion of data centers and AI technologies. This increase would elevate global copper demand to 52.5 million tonnes per year, marking a 72% rise from 2021 levels. The implications of this copper shortage are profound, particularly for industries essential to achieving zero-emission targets, such as electric vehicles, solar farms, and power cables. A crisis in copper supply could hinder the operations of major firms like Microsoft, Google, Amazon, and Tesla, as well as impact Nvidia's ability to produce AI chips. JPMorgan has projected a copper deficit of four million tonnes by 2030, attributing this to the rising demand from electric vehicles and renewable energy sectors, alongside weak demand from China, which constitutes over half of global copper consumption. Despite these challenges, BHP Group's copper production increased by 9% in fiscal 2024, reaching 1.9 million tonnes. The company has also acquired a 50% stake in two copper projects in Argentina, which could help meet the anticipated demand increase. However, BHP's stock has seen a decline of nearly 14% over the past year, reflecting investor concerns amid these market dynamics.