All Eyes on Copper as 'Incredibly Bullish' Investment Opportunities Arise

PALM BEACH, Florida, July 12, 2018 /PRNewswire/ --

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Global demand for renewable energy is sparking a bull market for copper -- a crucial component for green energy, including solar, wind, hydro-power and electric vehicles. For example, roughly three times more copper is used in an electric vehicle (EV) than in a conventional-gas powered vehicle. By 2035, Bloomberg projects 43% penetration just in the light-duty vehicle market, which would equate to about 110 million cars, as reported by Mining.com. To meet that demand, the market would need up to 3.6 million extra tons of copper, equal to 15% of the current market. As that demand grows, copper companies are racing to discover new sources of supply. Several legitimate players that are taking advantage of growing demand for copper include District Copper Corporation (TSX:DCOP)(OTC:CAXPF), Southern Copper Corporation (NYSE:SCCO), Freeport-McMoRan (NYSE:FCX), Glencore (LSE:GLEN)(OTC:GLNCY) and BHP Billiton Ltd. (NYSE:BHP).

Whether it be District Copper Corporation's Eaglehead project in northern British Columbia, or Southern Copper Corporation's $2.5 billion Michiquillay project in Peru, copper companies are just beginning to attract a significant amount of investor attention with potential new copper supply.

The Bull Market in Copper Had Only Just Begun 

As the world just begins its transition to renewable energy, copper will remain under heavy demand. In fact, many green energy systems require more copper than traditional energy sources. Photovoltaic (PV) solar cells, for example, can use up to 5.5 tons per megawatt (MW). Grid energy installations need between three tons and four tons per MW. Even a single wind farm can use as much as 15 million pounds of copper.

However, while there's plenty of demand for copper, there are supply issues mounting with analysts projecting a supply crunch sooner than expected. According to Copper Fox Metals CEO Elmer Stewart, as quoted by InvestingNews.com notes, "We're expecting a significant supply deficit to develop within the next year. This deficit is due to two main factors: a lack of advanced-stage projects due to low copper prices; and the expected increase in demand as demonstrated by the 23 million tonnes consumed in 2017. At a conservative growth rate of 2 percent, approximately 460,000 tonnes of new copper has to be produced in 2018. A study group has forecasted that by 2027 a minimum 4.6 million tonnes of additional copper will be required to meet the market demand. This doesn't take into account the additional copper demand expected from the "green revolution."