In a recent publication, renowned consulting firm KPMG unveiled a sobering study that foresees a looming copper crisis by 2030, with an annual shortfall of 5 million tons. This alarming prognosis stems from an insurmountable demand surge for copper, driven primarily by the exponential growth in electric vehicles and a myriad of other applications, surpassing the capabilities of current production capacity.
Furthermore, complementing this study, the International Copper Association (ICA) has highlighted in a recently published article that the demand for refined copper, driven by global decarbonization efforts, is poised to nearly triple by 2050 compared to the 2020 production levels. Specifically, it is projected to surge from the 20 million tons produced in 2020 to an estimated 57 million tons.
To comprehend the significance of these findings, it becomes apparent that, according to these studies, the world is confronted with the daunting challenge of sustaining an annual upswing in copper production by approximately 20% to 30% within the next seven years. This undertaking is akin to introducing a production capacity on par with that of Chile, the world's largest metal producer. Achieving this feat necessitates not only the establishment of new mining operations but also the optimization of output from existing mines.
To attain this ambitious target, experts assert that the mining industry must commit substantial investments, estimated to range between US$50 to $70 billion by 2030, specifically to bolster copper production. It's essential to recognize that this staggering financial requirement solely addresses the surging demand for copper, not even delving into the essential resources required for the broader energy transition. Other critical metals like lithium, cadmium, gold, silver, nickel, chromium, manganese, zinc, and more are equally indispensable for the monumental task of decarbonizing the global economy.
Moreover, our concerns extend beyond the mere expansion of production. It's imperative to emphasize the need to extract and process additional metals while mitigating the already precarious and prominent issues associated with global warming. This presents a formidable obstacle for the mining sector, as it currently contributes to 7% of the total greenhouse gas emissions globally, with diesel combustion in machinery alone responsible for half of this substantial environmental footprint.
As a result, mining enterprises are committing to the vital task of decarbonizing their operations. Their efforts encompass multiple initiatives, which involve shifting machinery from diesel to electric variants when feasible. Additionally, they are actively engaged in designing machinery fueled by alternative energy sources like hydrogen and ammonia. This concerted endeavor aims to significantly curtail, if not eliminate, the reliance on fossil fuels in essential mining equipment such as trucks, loaders, and excavators.
In the context of copper mining, companies are actively exploring strategies to enhance the processing of challenging ore varieties rich in copper. They are considering the implementation of advanced and scalable grinding technologies. One notable innovation in this domain is the adoption of gearless ore mills, which facilitate the extraction of increased copper yields from raw materials. This achievement is realized through grinding processes that demand minimal energy input while maximizing copper recovery.
Another pivotal undertaking involves the digital transformation of equipment, systems, and procedures, with the primary objective of optimizing operational efficiency within mining operations. For instance, in the realm of gearless mill drives, a multitude of predictive analysis systems are already in place to monitor equipment uptime. These sophisticated systems empower companies to proactively address maintenance requirements, thereby guaranteeing peak availability and efficiency for their machinery.
The advent of artificial intelligence is heralding a new era of innovations in mining equipment, enabling advanced performance and operational analyses. This transformative technology delivers a broader spectrum of insights, notably in engine operation, enabling proactive measures to preclude issues and, crucially, conducting in-depth assessments of processed ore quality.
The shift towards digitizing operations is imperative due to the heightened demand, compelling mining companies to prioritize maintenance procedures and preemptive failure mitigation. In this environment, even the slightest efficiency improvement holds significant value.
The integration of technology, alongside investments in novel mining ventures, will be pivotal in ensuring that the world secures the essential copper required for the energy transition while maintaining cost-effectiveness.
* Global Business Line Manager for Gearless Mill Drives at ABB
