COPPER OUTLOOK
Shortfall in copper supply widens as race for AI and growing defence spending A looming copper supply gap is poised to widen as electricity demand accelerates and new vectors—such as the race for artificial intelligence and surging defence spending—add to the call on copper. According to Copper in the Age of AI: The Challenges of Electrification, a comprehensive new study by S&P Global (NYSE: SPGI), the emerging supply deficit constitutes a “systemic risk for global industries, technological advancement and economic growth.”
Primary production—mining—remains the irreplaceable foundation of copper supply.
T he study finds that the “accelerating pace of electrification” is projected to swell copper demand to 42 million metric tons by 2040, a 50% increase from current levels. Yet, existing supply is currently poised to decrease in coming years as the mining sector faces challenges across the copper value chain. The study projects that global copper production will peak in 2030 at 33 million metric tons. Unless significant adjustments are made, the widening disconnect will result in a supply deficit of 10 million metric tons by 2040—25% below projected demand. This “substantial shortfall” occurs despite what the study expects will be a more than doubling of recycled copper scrap, from 4 million metric tons today to 10 million metric tons by 2040. “Here, in short, is the quandary: copper is the great enabler of electrification, but the accelerating pace of electrification is an increasing challenge for copper,” said Daniel Yergin, Vice Chairman, S&P Global who co-chaired the study. “Economic demand, grid expansion, renewable generation, AI computation, digital industries, electric vehicles and defence are scaling all at once—and supply is not on track to keep pace. At stake is whether copper remains an enabler of progress or becomes a bottleneck to growth and innovation.” The study leverages S&P Global expertise and proprietary
data across the company’s Energy and Market Intelligence divisions. Projections are based on a detailed bottom-up, technology-by-technology approach to quantify demand at its point of consumption, as opposed to production. This enables a better estimate of the embedded demand for the metal and the potential shortages or surpluses countries could face due to disruptions across the supply chain. “Several countries have deemed copper a ‘critical metal’ over the past half decade, including, in 2025, the United States. And with good reason,” said Carlos Pascual, Senior Vice President, Geopolitics and International Affairs, S&P Global Energy and study co-chair. “Copper is the connective artery linking physical machinery, digital intelligence, mobility, infrastructure, communication and security systems; the future availability of copper has become a matter of strategic importance.” The future of copper demand S&P Global Energy projects global electricity demand will increase by almost 50% by 2040. Meeting this demand will require adding the equivalent of roughly 330 Hoover Dams, or over 650 one- gigawatt nuclear reactors, each year between now and then. The new study finds demand for copper—as the enabling material for this massive growth in power demand—accelerating
20 MODERN MINING www.modernminingmagazine.co.za | February 2026
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