CRU-CESCO-From turbines to thermostats: Copper miners eyes high-tech demand

Nevada Copper

10/04/2019 18:16

By Ernest Scheyder
    SANTIAGO, April 10 (Reuters) - Growing demand for smart
thermostats, wind turbines and other high-tech devices is
expected to keep copper the dominant material used in electrical
components, industry players said, offsetting rising use of
aluminum, a cheaper alternative to conduct electricity.
    That bodes well for the likes of Chilean producer Codelco,
Rio Tinto Plc  RIO.L  and other major copper miners, who are
investing billions of dollars to bring new supplies of the metal
online during the next 20 years.
    Copper is used to make motors, batteries, wiring and other
goods as it is the best electrical-conducting metal, after
silver. Aluminum, which is lighter and cheaper than copper,
shares some of these traits, but is more corrosive and brittle
than its red rival and only about 60 percent as conductive.
    "Copper is going to be central to the green revolution,"
Charlie Durant, a CRU analyst, said at the World Copper
Conference this week in Santiago.
    So-called smart-home systems - such as Alphabet Inc's
 GOOGL.O  Nest thermostat and Amazon.com Inc's  AMZN.O  Alexa
personal assistant - will consume about 1.5 million tonnes of
copper by 2030, up from 38,000 tonnes today, according to data
from consultancy BSRIA.
    "We'll need more copper to meet that demand," Anette Meyer
Holley, a BSRIA consultant, said at the conference.
    Most smart homes, for instance, use 1,000 meters (0.62
miles) of wiring to connect those devices, containing about 20
kilograms (44 pounds) of copper in total, BSRIA estimates.
    Electric vehicles, which use twice as much copper as
internal combustion engines, are seen as a major growth area as
well, not just for the sheer number of cars expected to be
produced, but also battery chemistry.
    Attempts to replace copper in a lithium-ion battery's anode
with aluminum have failed so far, because lithium reacts with
aluminum and corrodes.
    "It's an unfortunate side effect that means copper is
essential," Na Jiao, an analyst at consultancy IDTechEx, said at
the conference. "Copper is regarded as the best candidate for
lithium-ion battery anodes connectors."    
    Solar panels and wind turbines are also seen as key areas of
copper demand growth, with more than 55 percent of copper
consumption to come from energy transmission and distribution
through 2040, according to the International Energy
Administration.
    "We know that the future of a modern, efficient digital
world is copper," Don Lindsay, chief executive of Canadian miner
Teck Resources Ltd  TECKb.TO , said at the conference.
    Aluminum can be used in turbine wiring, but it can shrink
inside wiring, potentially causing fires, reducing its appeal.
    "There's lots of skepticism around the use of aluminum in
solar and wind, providing a boost for copper," said Benjamin
Freas, an analyst at Navigant Research, said at the conference. 
    Copper's appeal pressures miners to produce more, with mines
under construction in Panama, Indonesia and even the United
States. urn:newsml:reuters.com:*:nL1N1ZF182
    "There's likely to be a shortage of copper in the near
future due to the electrification trend," John Black, chief
executive of junior copper miner Regulus Resources Inc  REG.V ,
said at the conference.    
    In China, which consumes half the world's copper,
electronics manufacturers vastly prefer the metal to aluminum
due largely to corrosion concerns, said Krisztina
Kalman-Schueler of DMM Advisory Group.
    "There is not enough motivation to change copper to aluminum
across China," Kalman-Schueler said.    
    Paradoxically, the copper industry sees a boon in the
wireless trend, which has sparked concerns about information
security and health hazards from radio waves, especially in
homes.
    "Wireless is king, but concerns over the security and health
of wireless will make wiring still very much appealing," Martin
Bergemann of Siemens AG  SIEGn.DE  said at the conference. 

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GRAPHIC-2019 asset returns:    http://tmsnrt.rs/2jvdmXl
Copper producers gather; electric cars seen driving demand
growth     ID:nL8N21N2LR 
Mining companies vs Copper price    https://tmsnrt.rs/2Vs3xJ8
LME cash copper price    https://tmsnrt.rs/2Vr2Qzw
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 (Additional reporting by Zandi Shabalala, Dave Sherwood and
Fabian Cambero
Editing by Susan Thomas)
 ((ernest.scheyder@thomsonreuters.com; Twitter: @ErnestScheyder;
+1-713-210-8512; Reuters Messaging:
ernest.scheyder.thomsonreuters.com@reuters.net))