Copper supply could peak before demand: Why a 30% shortfall is hard to fix

Global copper supply is facing a structural challenge as demand from artificial intelligence (AI) data centres, electricity grids, electric vehicles (EVs) and renewable energy accelerates. With mine production expected to struggle to keep pace, the market could face a significant supply deficit over the next decade, raising concerns about higher prices and constraints on industrial expansion.

Teck Resources CEO Jonathan Price has warned that copper demand is on track to double by 2035, while supply could fall 30% short of what the market needs. The International Energy Agency (IEA) has also flagged a potential 30% supply gap, highlighting the growing mismatch between projected consumption and available mine output.

The problem is compounded by the time required to develop new mines. While a data centre can be built in months, a copper mine can take 15–20 years to progress from discovery to production. Higher prices may encourage investment, but they cannot immediately translate into additional supplies.

According to projections cited by Teck, output from existing mines could begin declining in 2027, with total supply, including committed projects, potentially peaking in 2029. Meanwhile, demand is expected to rise as countries expand power infrastructure, electrification and digital capacity.

Why copper demand is rising

Copper is essential for power transmission, transformers, electrical cables, renewable energy installations and EVs. The rapid expansion of AI infrastructure is adding another source of demand, as data centres require substantial electrical equipment to support energy-intensive computing.

The scale of planned investment is significant. The 18 largest AI campuses in the US alone are planned to have 30 gigawatts of capacity, requiring extensive networks of transformers, cables and substations.

Copper prices have also reflected concerns about tightening supplies. The London Metal Exchange (LME) copper price reportedly reached a record $14,700 per tonne in September, underscoring market concerns about future availability.

India's import dependence adds to concerns

Vedanta Group Chairman Anil Agarwal has warned of a structural global copper shortage over the next five to 10 years, driven by rising demand from AI, data centres and electrification. He has argued that India needs to accelerate domestic exploration and introduce policy changes to strengthen production.

India's copper consumption rose to 1.88 million tonnes in FY25 from 1.72 million tonnes in FY24, according to the International Copper Association. The Ministry of Mines projects demand could reach 3–3.3 million tonnes by 2030 and 8.8–9.8 million tonnes by 2047.

However, limited domestic concentrate production leaves India reliant on imports to feed its smelters. Expanding refining capacity alone will not eliminate this vulnerability without adequate raw-material supplies.

The government aims to increase annual smelting and refining capacity to 5 million tonnes by 2030, alongside exploration initiatives and measures to secure overseas mineral assets.

The key question is whether new mining projects, recycling and domestic exploration can bridge the widening supply gap before demand outpaces production. If not, higher prices could force manufacturers to substitute aluminium where feasible, delay projects or absorb rising costs.