Geneva: A critical shortfall in copper supply could derail global efforts to transition to clean energy and digital economies, warns UN Trade and Development (UNCTAD) in its Global Trade Update released today, calling for smarter trade policies, massive investments, and scaled recycling to address supply constraints and ensure developing countries capture equitable economic benefits from the copper surge.
The report, published on May 6, 2025, establishes copper as the “new strategic raw material” in the green and digital economy, vital for electric vehicles, renewable energy systems, artificial-intelligence infrastructure, data centres, smart grids, construction, electronics, transportation, and defence. Its exceptional electrical and thermal conductivity, malleability, and corrosion resistance make it indispensable. Global copper demand is projected to rise by over 40% by 2040, driven by clean energy and digitalisation, with clean energy technologies alone potentially tripling requirements, necessitating an additional 10 million tons, nearly half of 2023’s global supply. Meeting the 2030 net-zero emissions goals requires developing 80 new copper mines and investing $250 billion. However, supply faces severe constraints: declining ore grades, geopolitical uncertainties, escalating trade tensions, and project development timelines of 15 to 25 years. This demand-supply imbalance, as the report underscores, threatens to stall critical climate and technological advancements, positioning copper as a pivotal challenge for global trade systems navigating resource pressures.
The copper supply chain spans ore extraction, processing into copper mattes, blisters, and anodes, and refining into usable copper for industrial products. In 2024, Chile led global mine production with 23% of output (5.3 million metric tons), followed by the Democratic Republic of the Congo (14%, 3.3 million metric tons) and Peru (11%, 2.6 million metric tons), together accounting for nearly half of global production. The Congo’s high-grade reserves, with some mines exceeding 3% copper content compared to the global average of 0.6–0.8%, have driven a near-tripling of its production since 2016, while Chile’s output declined by 5%, highlighting vulnerabilities in established producers. In 2023, global refinery production reached 26.5 million metric tons, including 4.5 million tons from recycled copper. China dominates refining, producing over 12 million metric tons annually (45% of global output), while Africa’s share rose from 7% to 9%, driven by the Congo and Zambia. Conversely, the Americas’ share fell from 39% to 15%, Europe’s from 32% to 14%, and Oceania’s from 3% to 2%. The report’s data on China’s dominance suggests a risky concentration of refining capacity, potentially amplifying global supply vulnerabilities if disruptions occur, a concern that underscores the need for diversified production hubs.
Global copper reserves are highly concentrated, with Chile holding 20%, Australia and Peru 10% each, and the Democratic Republic of the Congo and Russia 8% each, totalling over 50% among five countries. The Congo’s largely untapped high-grade reserves offer significant growth potential, but geopolitical instability and infrastructural deficits, as noted in the report, pose substantial barriers to development. Supply chain disruptions, driven by geopolitical tensions and logistical challenges, further complicate the outlook. In June 2024, Shanghai Futures Exchange stockpiles surged to a 51-month high of 339,964 metric tons, defying seasonal export patterns due to weakened demand in housing construction and manufacturing. This stockpile surge indicates a temporary oversupply but masks a structural long-term deficit, driven by declining ore grades and delayed mine projects, emphasising the urgency of diversifying supply sources to mitigate future shortages.
Global copper trade has undergone profound shifts over the past two decades, reshaping economic dynamics. In 2003, Japan led ore and concentrate imports with 26%, while China held 17%; by 2023, China’s share surged to 60%, and Japan’s fell to 10%, reflecting China’s emergence as the primary refining hub. Copper matte exports transitioned from Botswana (25%), Brazil (16%), and Mexico (9%) in 2003 to Germany (34%), Mexico (14%), and Canada (8%) in 2023, with Botswana and Brazil dropping out of the top ten. Germany, the top matte importer in 2003 (25%), became the leading exporter by 2023, while 2023 importers included Belgium (36%), South Korea (32%), and China (16%). For refined copper, Chile’s export share declined from 40% to 21%, with the Congo contributing 15%, while China, the United States, and Italy remained top importers, with China’s share doubling since 2003. These trade shifts, as the report illustrates, signal a troubling consolidation in Asia and parts of Europe, increasing risks of supply chain bottlenecks and highlighting the need for diversified trade networks to enhance global resilience.
Note: The measure of economic complexity in these graphs is calculated considering 0 as the average of the
world distribution and 1 is a standard deviation of the distribution. Therefore, negative values indicate that a country has a complexity value below the global average.
Developing countries like Chile, Peru, and the Congo, despite holding significant reserves, risk remaining raw material exporters without strategic investments in domestic processing, as the report warns. Value-added manufacturing, such as copper wire (63% of first-use copper), is dominated by China, Germany, Japan, and the United States, with export markets in India, Southeast Asia, and the European Union. Opportunities in electric vehicle components, like wiring and battery foils, are copper-intensive, but low economic complexity in countries like Zambia (-0.48) and the Congo (-0.55), compared to Indonesia’s 2.05 on the Product Complexity Index, limits their ability to capitalise. Low complexity, as the report explains, reflects insufficient technological and industrial sophistication, perpetuating dependency on volatile commodity markets. Tariffs exacerbate this inequity: value-added copper products face rates of 8% in South Korea and 7.5% in India, compared to under 2% for refined copper in the US and China, creating a structural barrier that favours developed nations’ downstream industries and restricts developing countries’ industrial growth. This tariff escalation, as critiqued in the report, entrenches global value chain asymmetries, undermining equitable economic development.
Recycling, accounting for one-third of 2023’s copper use, offers a sustainable solution, requiring significantly less energy and producing lower emissions than mining. Leading scrap exporters—the United States (14.5%), Germany and Japan (6.7% each), Malaysia (5%), and the Netherlands (3.7%)—demonstrate the economic and environmental potential of circular economy strategies. However, the report notes that developing countries with limited recycling infrastructure miss these benefits, further widening the gap in value capture and sustainability gains, a disparity that demands targeted policy interventions.
UNCTAD’s policy recommendations aim to rectify these systemic inequities, but their implementation faces significant challenges, as implied by the report’s data. Accelerating mine development and expanding refining capacities require substantial capital and infrastructure, particularly in geopolitically volatile regions like the Congo. Scaling recycling depends on global cooperation to enhance scrap collection and processing in developing nations, a challenge given current infrastructural deficits. Promoting domestic processing through tax incentives, industrial parks, and high-value manufacturing could transform countries like Chile, Peru, and the Congo into industrial hubs, fostering job creation and technological progress. However, the report’s mention of low economic complexity and tariff barriers suggests these goals are ambitious without significant investment in skills and infrastructure. Trade partnerships, such as the European Union’s Everything But Arms (EBA) and Generalised System of Preferences (GSP), offer preferential market access to boost exports, but their effectiveness hinges on overcoming tariff escalations and building local industrial capacity. Collaboration between major producers and junior mining firms, streamlined permitting, and advanced extraction technologies could expedite projects, but the report emphasises the need for robust governance to prevent exploitation and ensure equitable outcomes.
The report concludes that the copper industry’s pivotal phase tests the global trade system’s ability to balance resource pressures with inclusive development. China’s refining dominance, tariff-driven inequities, and developing countries’ low economic complexity highlight systemic challenges that UNCTAD’s policies seek to address. The feasibility of these measures—requiring unprecedented investment and global coordination—remains uncertain, but the report’s urgency underscores the critical need for transformative action to prevent the copper shortfall from derailing green and digital transitions while perpetuating economic disparities.
– global bihari bureau
