Gregor.us brings our attention to the slowing growth in world copper production at the very time when copper demand is increasing at an accelerating rate.  With the addition of renewable energy sources to the world’s electrical grids (solar, onshore and offshore wind) and the need for smart grids and new long distance transmission lines to bring power from remote areas, there is certain to be a short-to-medium term shortage of copper.  Indeed, as the price of copper goes up the theft of copper is increasing at an alarming rate.

This chart shows world copper production from 1980 to 2010.  Over that time the growth rate has slowed dramatically from 2.9% over the period 1980-1999 to 1.7% over the past decade.

 

Source: Gregor.us                             CAGR = compound annual growth rate

 

While production is declining, demand is soaring driven by the growth of the BRIC countries.  Last month, the price broke through $10,000 (£6,200) a tonne for the first time.  The International Copper Study Group expects a global supply deficit this year of 400,000 tones.

Some of the copper demand can be replaced by aluminium, but it is not a perfect substitute. Because of aluminium’s lower conductivity, telephone lines made from it must be wider, making them more expensive and this is without taking into account the higher costs because of the larger amounts of the metal that are needed to make the line.

As for the theft of copper, just Google “copper theft” and you will find endless stories about how people are risking their lives taking it from live power lines and in many cases not living through the ordeal.  And more than one community has suffered power outages as a result of thefts shutting down parts of the grid.  As The London Telegraph notes:

The effects of this astonishing rise have rippled across the world. In Britain trains have faced delays as rail companies have struggled to fix power lines that have been attacked by thieves determined to strip them of their valuable copper.

For E.On the problem of copper theft has become so acute that the power company has begun hiring former Gurkhas to guard electricity substations. Even the Church of England has been moved to decry the cost to it of fixing the damage caused when thieves target their buildings.

Absent a rapid increase in copper production, many plans to build and restructure electrical grids around the world over the next decade are sure to be put on hold.

Tags: , , ,