Over the past decade, a number of trends have converged on copper supply chains, converting a once ‘ordinary’ industrial material into a strategic bottleneck of geopolitical consequence.

Surging Copper Demand

Copper has become one of the most important materials in the global economy, not only because it has long been used in construction and manufacturing, but also because it is an essential component in emerging technologies driving clean energy and digital transformation.

Back in 2021, before AI tools had entrenched themselves in the public consciousness, the approximately 28 million tonnes of copper consumed over the course of the year broke down as follows:  power grids (transformers, generators, wiring; 44%), consumer appliances and electronics (circuitry, contacts, wiring; 14%), transport (batteries, lighting, navigation; 12%), construction (plumbing, roofing, cladding; 20%), and a remaining 10% composed of coins, sculptures, jewelry, cookware, and other miscellaneous consumer goods.

This 2021 breakdown represents a conventional use case for copper. It has since shifted and continues to evolve in the context of the artificial intelligence (AI) and renewables boom. Data centers represent two vectors of copper demand: the power generation, cooling, and IT infrastructure within them, and the wider electrical networks required to sustain them. How much copper exactly? A 2023 study on a Chicago-area data center found that around 27 tonnes of copper is required for every megawatt (MW) of applied power. Moreover, this number does not include the more diffuse demand impacts of the power grid, which are considerable given that S&P estimates that data centers will be accounting for 5-14% of US electricity demand by 2030. Other estimates put the number as high as 47 tonnes per MW. Whatever the precise figure, it’s safe to say that data centers are baseline copper intensive, with demand scaling alongside power and heat levels.

Renewables are another relatively new source of copper demand. Electric vehicles (EV) are more copper intensive than conventional cars, requiring around 2.9 times more copper per unit, and the global EV market is growing at a clip, with sales up 20% year-on-year in 2025. Similar to data centers, new electricity infrastructure to charge EVs represents a diffuse demand driver. Charging stations require anywhere between 0.7 to 20kg of copper per unit, and analysts predict as many as 206.6 million charging ports globally by 2040. This would be up from around 36 million charging ports in 2025, representing a CAGR of 12.3%. Solar and wind generation – which represented 90% of newly installed generation capacity in 2025 – are also copper intensive via transmission and battery demands. Solar requires around 3-5.5 tonnes of copper per installed MW, and wind 3-15 tonnes depending on whether it is onshore or offshore. The tendency for renewables to be located in relatively remote locations also increases transmission (and therefore copper) requirements by as much as two to three times.

The net result of these structural shifts is intensifying global copper demand, with BloombergNEF predicting copper markets to enter a worsening supply deficit in 2025, potentially reaching a shortfall of 19 million metric tonnes by 2050.

Global Bottlenecks in Copper Supply

Global copper supply is heavily concentrated in just a few states, with Chile, Peru, and the Democratic Republic of the Congo accounting for around half of all copper production.

Such a high degree of concentration is a risk unto itself, but the risk is further compounded by several factors:

• Water Demands. Copper extraction is a water-intensive process. Water demand is also inversely correlated with ore grades, which are trending down worldwide. Water shortages are increasing in Chile and Peru, forcing companies to build energy-intensive desalination plants (which paradoxically are also copper-intensive). In the DRC and Zambia, limited transportation networks and political instability create delays and raise costs. We are now starting to see certain contexts where water – not copper – is the primary bottleneck for scaling up production.
• Energy Demands. Copper production is extremely energy intensive. Smelting alone may require thousands of kilowatt-hours of electricity per ton of output. As global energy prices rise, many smelters face profitability challenges. Some have reduced production or temporarily shut down, tightening supply just as demand is growing.
• Regulatory Tightening. Environmental, Social, and Governance (ESG) requirements has become much stricter in many jurisdictions. Governments now require more comprehensive environmental assessments and community consultations, while the public increasingly expects mining companies to demonstrate responsible practices and reduce their carbon footprints. These expectations tend to lengthen timelines and increase costs, and they complicate the realization of resource nationalism goals, as discussed below.
• Social and Labor Tensions. Social and political factors add another layer of complexity. Copper mining tends to occur in remote regions where communities feel the environmental impacts of extraction but may not see economic benefits. Disputes over land rights, revenue sharing, and environmental protection can halt or slow projects. Labor strikes in major mines can remove tens of thousands of tons of copper from global supply in a matter of weeks.
• Climate Risks. Climate-related risks are also rising. Floods, droughts, landslides, and heatwaves increasingly disrupt mining operations, damage roads, and reduce availability of power and water. These events have ceased to be rare anomalies and are now becoming structural challenges. For example, the Cobre Panamá copper mine in Panama – one of the world’s largest – was closed by constitutional decree in 2023 following nationwide protests over, among other things, the mine’s water usage during a record drought.