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Telegraph
18-07-2025
- Business
- Telegraph
Trump's copper war is an insane act of self-harm
The battle for global mastery of electric technologies and artificial intelligence will be decided over the next five to 10 years. Any country that deprives itself of copper at competitive prices will slip down the global economic rankings. It will be pushed progressively to the sidelines in the Age of Big Shovels, as the post-fossil world is called by Daniel Yergin, author of The New Map: Energy, Climate, and the Clash of Nations. The International Energy Agency (IEA) says China accounted for 60pc of total global demand for copper last year, far ahead on the way to becoming the first electro-superpower. The US accounted for just 6pc. That one figure tells you to what degree the world is already splitting into two divergent camps: one doubling down on electrification, and the other doubling down on fossils. But whatever your views on energy, both camps are going to need a lot of copper for other reasons. Almost 20 years ago, geologists at Yale published a paper for the Proceedings of the National Academy of Sciences warning that the world had already lost 26pc of all the extractable copper in the Earth's crust, either lost to air from grinding or buried in landfills. They doubted that there would be enough ore left for the developing world to replicate our living standards. I remember it well because I interviewed the lead scientist and reported the story in The Telegraph. That 'peak copper' scare proved premature. Asia has since industrialised and we have not run out of copper. But the underlying point is still valid. There are limits. The IEA says the world is already in the early stages of a structural supply crunch. The copper deficit will keep growing because demand is rising and good ore is hard to find. Some 239 deposits were discovered between 1990 and 2023, but only 14 were found over the last decade, and they are not the biggest. 'It's time to sound the alarm,' says Fatih Birol, the IEA's director. The best rock is depleted. The average grade of copper mines has decreased by 40pc since 1991. Output has held up because of new tricks in solvent extraction and 'electrowinning'. But it is becoming ever more expensive to extend the life of old brownfield projects. Capital costs have jumped by 65pc over the last five years. It currently takes an average of 18 years to produce the first marketable copper from a new project – or 29 years in the US, where planning permission takes a decade, and the only quarrying done is by lawyers mining legal briefs. Donald Trump's mystifying answer to this is to announce 50pc tariffs on imports of the metal from Aug 1, under the national security '232' clause that does not require approval by Congress. 'This is our Golden Age – we will rebuild a DOMINANT Copper Industry,' he posted on Truth Social. 'Copper is necessary for semiconductors, aircraft, ships, ammunition, data centres, lithium-ion batteries, radar systems, missile defence systems and even hypersonic weapons, of which we are building many.' Most copper is in fact used in construction, grids, air-conditioners, fridges, TVs, and day-to-day electronics, but that would not justify a weaponised '232' tariff. The chief effect of a 50pc tax on copper inputs, the raw material of the modern economy, is to push up prices and render US industry even less competitive in the global market. However, it does choke US demand for copper and therefore frees up more scarce supply for everybody else, especially for China, but also for Ed Miliband's clean power blitz, as my colleague Hans van Leeuwen wrote earlier this week. Even in the surreal world of Trump's tariffs, this one leaves you open-mouthed. The US currently imports half its copper. The intelligence unit at S&P Global says the US has 70m metric tons of untapped reserves, enough to cover 20 years of national demand. That is purely theoretical. Rio Tinto's Resolution copper project on a sacred Indian site in Arizona has been blocked for years by the Apache tribes. The Supreme Court gave it a green light last month – refusing to even listen to the Apaches' appeal – but it will take another eight years or so to bring the mine on stream. The other big project is Pebble Bay in Alaska. That has been blocked by the Environmental Protection Agency because of threats to pristine salmon waters. The MAGA movement is rooting for the salmon in this dispute. Donald Trump Jr likes to fish there, and broadcaster Tucker Carlson is a voice for the #StopPebbleMine movement. Hardliners will ram it through eventually but Pebble Bay will not be producing copper in any meaningful time-horizon. S&P Global says America will still rely on imports for 30pc of its copper by 2035 even if all key projects are given fast-track permits and rushed into operation. By then technology will have moved on and the copper scare will probably be over. Superconductors, dielectric waveguides, atom-thick graphene chips made from cheap methane, will all be eating into copper demand. So will carbon nanotubes, now starting to match the conductivity of copper, and with greater tensile strength. The cost is plummeting, in the manner of Moore's Law. Korean scientists have just built a metal-free electric motor with carbon nanotubes that cuts weight by 80pc. The critical window for the global electro-tech race is right now. Trump is deliberately blowing up America's EV and clean-tech sectors. But he still needs the cheapest copper possible to stay level in everything else. The US could start by wasting less of what it does have. S&P Global said the country's copper recycling rate has fallen to 6pc from 16pc in the 1990s. Some 70pc of US copper imports come from Chile, and most of the rest from Canada and Mexico. These are friendly states. A rational policy would be to lock in that supply by tight alliances rather than kicking these countries in the teeth. The US has just two primary copper smelters left. A once mighty industry has long been in a death spiral, unable to compete on the world market. The way to stop China increasing its stranglehold yet further on refined copper is to revive mothballed US smelters and build new ones at $700m a shot. That means showering companies with tax credits in a variant of Joe Biden's Inflation Reduction Act. It means building consensus on Capitol Hill. It means grit and consistency, not daily reversals by a president who changes his mind with the weather. Even if everything went right it would take a decade to start to regain autonomy in copper smelting. By then China will already be fully electric. Trump has his sequencing backwards. He picked a fight with China before establishing a US supply chain for rare earth minerals, and has now discovered the scale of his error. He has been forced to retreat and send China the Nvidia H20 chips it wants, and much else besides, just to get the rare earths moving again.
Forbes
14-07-2025
- Business
- Forbes
Yergin: America's Copper Hunger Increasingly Hard To Feed
WASHINGTON, DC - FEBRUARY 03: U.S. President Donald Trump (R) greets S&P Global Vice Chairman ... More Daniel Yergin at the beginning of a policy forum in the State Dining Room at the White House February 3, 2017 in Washington, DC. (Photo by) In a study published in July, 2022, researchers at S&P Global projected a 'looming mismatch' related to global supply and demand for copper, a critical energy metal which is integral to meeting the world's energy needs. I wrote then that the future of copper was coming at us fast, and recent events indicate a potential crisis could well be arriving ahead of schedule. Using Tariffs To Spur Copper Mining As part of his administration's efforts to incentivize major new investments in the U.S. mining sector, President Donald Trump said on July 8 that he will impose a 50% tariff on copper imports effective August 1. 'I am announcing a 50% TARIFF on Copper, effective August 1, 2025, after receiving a robust NATIONAL SECURITY ASSESSMENT,' Trump wrote in a post on Truth Social. 'Copper is necessary for Semiconductors, Aircraft, Ships, Ammunition, Data Centers, Lithium-ion Batteries, Radar Systems, Missile Defense Systems, and even, Hypersonic Weapons, of which we are building many. Copper is the second most used material by the Department of Defense.' Whether the President's strategic approach to spurring domestic investment in new mines will succeed is an open question, but his assessment of the ubiquitous presence of copper as integral to pretty much every weapons system and mode of transportation key to America's defense is undeniable. For the Pentagon, the current situation in which the U.S. imports roughly 45% of its daily copper needs (per U.S. Commerce Department data) this represents a national security risk even though most imports originate in Chile and Canada. But, as S&P Global's study points out, access to adequate copper supplies is crucial to the energy sector, too, especially if the stalling energy transition is to continue in any meaningful way. Copper may well be even more crucial to meet the enormous electricity needs for AI and datacenters and the Pentagon's rising needs due to beefed-up military spending. Due mainly to its relative abundance and high degree of conductivity, copper has been a preferred metal in electricity applications since the days of Nikola Tesla and Thomas Edison. In its study, S&P Globaldescribes copper as 'the metal of electrification,' adding that 'Unless the impending supply gap for 'the metal of electrification' is closed in a timely way, Net-Zero Emissions by 2050 will be short-circuited and remain out of reach.' In a recent interview, Daniel Yergin, S&P Global Vice Chairman and author of the best-selling 'The New Map: Energy, Climate, and the Clash of Nations,' told me copper is such a vital strategic resource that his company is in the process of compiling a new study to be titled 'Copper in the Age of AI,' scheduled for publication in November. Yergin says his concerns about the ability of the global community to meet rapidly rising energy demands have only increased since 2022 Aldie, VA - January 20:On what was recently farmland, Amazon data centers have been built as close ... More as 50 feet from residential houses in the Loudoun Meadows neighborhood on January 20, 2023, in Aldie, VA. A Microsoft data center is under construction in at top right. As the data center industry expands its footprint in Northern Virginia, often building massive commercial structures near residential neighborhoods, communities push back with their concerns.(Photo by Jahi Chikwendiu/The Washington Post via Getty Images) 'I think the world is not prepared for the scale of the demand in order to meet these ambitions around AI, around defense, around energy transition, and then traditional demands,' Yergin says. 'So, I think it is really critical to focus in on these minerals and what must happen to assure that you have the supply to keep your economy running.' Timelines For Copper Mines Are A Major Roadblock While tariffs could help jumpstart new mining projects in the U.S., Yergin warns of obstacles to increasing domestic energy security in the near term, mainly due to issues around timing. 'On average around the world, it takes about 16 years from discovery of a new mine to first production. Currently in the United States, it takes 29 years,' he points out, adding, 'I mean, you start and then your career is over. It's an entire career spent on a single mine.' We discussed the fact that, starting in the first Trump administration in 2017, repeated attempts have been mounted to streamline federal permitting processes, to little effect. Trump and his key cabinet officials - Lee Zeldin at EPA, Chris Wright at the Energy Department, and Interior Secretary Doug Burgum - have permitting reform at the top of their agenda, too. And, as Yergin points out, shrinking the timeline to first production is one of the top priorities of the new National Energy Dominance Council headed up by Burgum. Yergin notes that there are at least two big new copper projects being developed in Arizona, but their production start dates remain years away. And, as all the administrative and congressional wheels keep spinning, there is a risk that timelines could keep extending. Ore truck at copper mine in Montana. 'And it isn't just permitting' that extends timelines to first production, Yergin says. 'it's the subsequent judicial review that goes on and on. There are some great proposed projects in the United States that, instead of mining ore, just end up mining legal briefs instead.' In a detailed, comprehensive piece in Foreign Affairs published in February, Yergin, writing with Peter Orszag and Atul Arya, foresaw the looming heightened prioritization of domestic mining for copper and other critical energy minerals, predicting 'a shift from 'big oil' to 'big shovels.' Such an increase would mean 'more mining and processing, driven by major new investments and resulting in much-expanded industrial activity.' But, Yergin, Orszag and Arya add, 'the complexities surrounding mining and critical minerals represent another major constraint on the pace of the energy transition.' The Future For Copper And U.S. Energy Security Unlike most other critical energy minerals, U.S. imports of copper do enjoy the current advantage of supply chains not under the dominance of China's government. But, with the uncertain nature of Chile's government and with China's investments and Belt-and-Road Initiative already making significant inroads into Latin America, no one can predict how long that will remain the case. Increasing tensions between the U.S. and Canada driven by concerns over tariffs and border security issues also serve to elevate future supply concerns. Meanwhile, America's vibrant tech sector keeps rolling out a steady stream of new energy hungry technologies, causing overall demand to accelerate at an increasingly rapid pace. All of which means that Trump's instinct that the U.S. should get back into the hardrock mining business in a big way is on point regardless of the way the tariff strategy plays out. Most discussions around copper, critical energy minerals, and domestic mining over the past half-decade centered on the needs of the government-subsidized energy transition. Yergin points out that the entire energy transition project as outlined over the last several years is not happening, adding 'it is a process that needs to be rethought, needs to catch up with reality.' While that is happening, the discussion around copper and mining for it must refocus on how America will be able to keep the lights on and the electrons flowing in the coming years. It's a complex question with no easy answers.
Mint
27-06-2025
- Business
- Mint
Yergin: $40 oil isn't happening. Where energy is headed after Iran.
The surprisingly calm reaction in global oil markets to the U.S. and Israeli attacks on Iran's nuclear operations highlights the realigning world order of oil supply. Daniel Yergin, vice chairman of S&P Global, spoke to Barron's on Wednesday about the implications of the conflict and the two-month cease-fire announced this week on oil markets, which have since stabilized. Brent crude is trading at $66, just around where it was priced before Israel first attacked Iran on June 13. 'The market is telling us that a disruption of supply isn't expected, which implies that this cease-fire will hold. But is the crisis over? Only the events will provide that answer," said Yergin, a Pulitzer Prize-winning historian of oil. This transcript of the conversation has been edited. Barron's: How have the increased tensions in the Middle East and U.S. and Israeli attacks on Iran's nuclear facilities impacted your outlook for oil prices? Daniel Yergin: Going into this latest crisis, prices were set to be in a lower range than they had been before. Coming out of the crisis, they will probably revert to that low range, unless the cease-fire doesn't hold or there is some other disruption. The risk premium that went into the price was actually not that high given the amount of oil and [liquefied natural gas] that flows out of the Gulf. But there was no meaningful disruption. A year ago, we were talking about a range of $70-85 [per barrel of Brent]. Now it seems more likely like a $55-70 range, because of the imbalance between supply and demand. Are you concerned Iran may retaliate further? Is Middle East oil infrastructure still vulnerable? There is such a concentration of infrastructure—not only oil and gas but also desalinization. But it isn't necessarily rational for the Iranians to attack the Arab side of the Gulf, because, at least lately, there has been something of a detente between Iran and the Gulf Arab states. There has been a lowering of tension between both the Iranian side and on the Arab side, an effort to modulate tensions between them. You could see that in the Gulf states' statements. They deplored violence. One of the key elements for Iran to consider is that it depends upon the Strait of Hormuz to export oil and for its main source of revenue. Any disruption of the Strait would very likely bring retaliation against its own oil infrastructure. There are checks and balances at work here, even in a volatile war situation. China is the main buyer of the oil that goes through the Strait, and given Iran's relationship with China, that isn't something they would want to disrupt. China is their biggest buyer of oil by far. How does OPEC+ factor into this? They increased production recently. It is the Gulf Arab states who are the real ones in favor of increasing production, because they have all the shut-in production, and I think that they had really come to that conclusion several months ago. Some countries weren't sticking to quotas. But more important, they decided it was finally time to bring back this oil that they had been keeping on the sidelines and to accept the price consequences, but make it up—at least to some extent—by volume what they may lose on price. They clearly want to regain market share that they may have lost to other producers. Before Israel attacked Iran, there was talk in the market about potentially $40 oil by the end of the year. Is that possible? Certainly not $40, but based upon market conditions, we see oil prices at the end of the year lower than we have seen for some time. The fourth quarter is when I expect to see the biggest weakness in price. What does that mean for the U.S. producers? They have an obligation, a big social contract, to return money to investors. Therefore, when prices come down, then they would indeed reduce levels of investment. We already saw companies beginning to reduce their investment level. I think in July we will see companies really rethinking, looking very carefully, at how to be more prudent in terms of investment. The thing about shale is you have to keep investing to maintain production. So, in a lower-price environment, if we could see prices for an extended period in the $50s, then next year, we would see U.S. oil production going down. What does this all mean for the energy transition? The energy transition, as conceptualized in the last few years, is in trouble. There was this notion that there was going to be this linear transition that we get to net zero by 2050 for about half the world's emissions. The energy transition is going to be slower, more expensive. And it will be multidimensional—unfolding at different paces in different regions, with different mixes of technology, and definitely with different priorities. I'm just back from Asia, and it was clear that countries aren't going to trade-off economic growth. Economic growth and poverty reduction are just as big priorities as addressing climate. Wind and solar continue to grow. In the U.S., obviously the pace of that transition will be further affected by what happens in the current legislative battles of the budget. The fate of the tax breaks will have a big impact. But the biggest thing going on is the resurgence of natural gas: If you also look at the orders for gas turbines to generate electricity, they are through the roof It is odd that we just have this crisis in the Gulf, and we're all concerned about energy security. But the biggest area of protracted concern for energy security is about electricity and the reliability of electric power systems to meet the demand requirements of artificial intelligence. We show that data centers alone could go from 4% to about 10% of total electricity demand by 2030 in the U.S. But how do you produce the power? Natural gas is going to have a bigger role in it, and we will see the question of postponing the closing of coal plants. Despite the situation in the Middle East, where tensions remain high as the cease-fire may or may not hold, oil is still at the price level it was weeks ago. It seems like oil isn't a weapon anymore. Is that right? There is a stabilizer that wasn't there in previous crises. The global oil market has been rebalanced. The fact that the U.S. is now the world's largest producer of oil and the largest exporter of LNG changes both the geopolitical, the physical, and the psychological balance. That is very different from earlier decades, where the U.S. was an offset. It doesn't mean that the Gulf is less important. I think the growth in the Western Hemisphere, that is important. People generally know who the three largest oil producers in the world are the U.S., Saudi Arabia, and Russia. But how many know the fourth largest oil producer in the world is Canada? Canada is growing. Brazil is growing. Guyana is growing. That is not great news for Vladimir Putin. Thanks, Dan. Write to editors@
National Geographic
20-06-2025
- Business
- National Geographic
How Has Fracking Changed Our Future?
"The United States is in the midst of the 'unconventional revolution in oil and gas' that, it becomes increasingly apparent, goes beyond energy itself. Today, the industry supports 1.7m jobs - a considerable accomplishment given the relative newness of the technology. That number could rise to 3 million by 2020. In 2012, this revolution added $62 billion to federal and state government revenues, a number that we project could rise to about $113 billion by 2020.2 It is helping to stimulate a manufacturing renaissance in the United States, improving the competitive position of the United States in the global economy, and beginning to affect global geopolitics." —Daniel Yergin, vice chair of global consulting firm IHS, in February testimony before Congress "Natural gas is not a permanent solution to ending our addiction imported oil. It is a bridge fuel to slash our oil dependence while buying us time to develop new technologies that will ultimately replace fossil transportation fuels. Natural gas is the critical puzzle piece RIGHT NOW. It will help us to keep more of the $350 to $450 billion we spend on imported oil every year at home, where it can power our economy and pay for our investments in a smart grid, wind and solar energy, and increased energy efficiency. By investing in alternative energies while utilizing natural gas for transportation and energy generation, America can decrease its dependence on OPEC oil, develop the cutting-edge know-how to make wind and solar technology viable, and keep more money at home to pay for the whole thing." —Pickens Plan, a site outlining BP Capital founder T. Boone Pickens' proposed energy strategy "My town was dying. This is a full-scale mining operation, and I'm all for it. Now we can get back to work." —Brent Sanford, mayor of Watford City, a town at the center of the North Dakota oil boom, in "The New Oil Landscape" (NGM March 2013 issue) Negative impacts of fracking "According to a number of studies and publications GAO reviewed, shale oil and gas development poses risks to air quality, generally as the result of (1) engine exhaust from increased truck traffic, (2) emissions from diesel-powered pumps used to power equipment, (3) gas that is flared (burned) or vented (released directly into the atmosphere) for operational reasons, and (4) unintentional emissions of pollutants from faulty equipment or impoundment-temporary storage areas. Similarly, a number of studies and publications GAO reviewed indicate that shale oil and gas development poses risks to water quality from contamination of surface water and groundwater as a result of erosion from ground disturbances, spills and releases of chemicals and other fluids, or underground migration of gases and chemicals."—General Accounting Office report on shale development, September 2012 "The gas 'revolution' has important implications for the direction and intensity of national efforts to develop and deploy low-emission technologies, like [carbon capture and storage] for coal and gas. With nothing more than regulatory policies of the type and stringency simulated here there is no market for these technologies, and the shale gas reduces interest even further. Under more stringent GHG targets these technologies are needed, but the shale gas delays their market role by up to two decades. Thus in the shale boom there is the risk of stunting these programs altogether. While taking advantage of this gift in the short run, treating gas a 'bridge' to a low-carbon future, it is crucial not to allow the greater ease of the near-term task to erode efforts to prepare a landing at the other end of the bridge."—from a study on shale gas and U.S. energy policy by researchers at MIT (also see: "Shale Gas: A Boon That Could Stunt Alternatives, Study Says")
The Sun
18-06-2025
- Business
- The Sun
No energy disruption yet, but industry to closely track prices - S&P Global
KUALA LUMPUR:There is no global energy disruption so far, but industries will continue to closely monitor price developments, said S&P Global vice-chairman Daniel Yergin. He said that while there is currently a surplus of oil, industries must remain vigilant and ensure that energy security measures are firmly in place to address any potential disruptions. 'We will just have to see what happens over the next three to five days. I think we don't know (the disruption issues expectation), as these decisions are beyond just being made by a few people. 'It is really the decisions between Jerusalem, Tehran, and Washington, and people have to make some very important decisions,' he told reporters after the Energy Asia 2025 closing ceremony here today. He was responding to a question on the risk of supply disruption in the Middle East. The conflicts in the Middle East have escalated dramatically following a series of attacks by two major oil-exporting countries, Israel and Iran, on each other's energy infrastructure. The attacks have led to a potential closure of the Strait of Hormuz, a critical gateway to the world's oil industry. At the time of writing, Brent crude oil prices decreased 0.38 per cent to US$76.16 per barrel.
