Thanks to the strategic importance of copper in the future of world economy, investment in the industry has a bright outlook, says managing director of the National Iranian Copper Industries Company.
"Presently, electricity accounts for 21% of world energy consumption. This share will increase to 51% in 2050 and the most important element in this strategy is copper,” Ardeshir Sa’d-Mohammadi was also quoted as saying by IRNA.
Copper is an industrial metal essential for global growth because of its excellent electrical conductivity. It is vital for the transition to sustainable sources of energy to ensure a clean and green future and for enabling digitalization, according to the London-based research group, Acuity Knowledge Partners.
“In the next 10 years, at least 35% of the world's vehicles will be electric. Considering the average consumption of 4 kg of copper in ordinary vehicles and 89 kg in electric vehicles, we will see a change in demand for copper in cars in the near future,” the NICICO chief said.
Acuity Knowledge Partners estimates that EVs will generate additional copper demand of 1.5 million tons in 2025 and 3.3 million tons (forecast to be 10% of total demand) by 2030 versus less than 500 kilotons in 2020. The world’s biggest auto market, China, expects EVs to account for 60% of vehicle sales by 2035 and the US expects them to account for 50% by 2030. The number of EVs is forecast to reach 7 million by 2025, requiring 5 million charging ports to support them.
He noted that by 2035, 1.3 billion people will be added to the world's population and even with the current per capita consumption of copper, which is 3.2 kg, we will face increasing demand for copper that year due to population growth.
The official pointed to the increasing use of renewable energy in the world, which will be accompanied by an increase in copper consumption.
Referring to the annual investment of $4 trillion in infrastructure, including roads, airports, railroads and electricity, all of which require copper, Sa’d-Mohammadi said, “In 2021, 98% of copper companies were profitable, so the outlook for this element will be quite logical and profitable.”
Demand for the metal is increasing and the demand-supply gap is widening. Media reports indicate a wide gap of 8.2 million tons by 2030 as the metal is used in applications powering the energy transition.
Acuity Knowledge Partners also expects demand to be driven by the recommissioning of infrastructure and manufacturing projects. Supply, on the other hand, has been under pressure for several years and is likely to remain so.
Digitalization increases demand for computers, mobile phones and networks and, in turn, for components used in these devices and systems. It also increases demand for technological infrastructure. Copper wire is used in all electrical and electronic devices. Some estimates forecast that an additional 5.3 million tons of copper will be required to cover demand created by 42 emerging technologies by 2035.
Copper prices touched their all-time high, despite the pandemic, in the second quarter of 2021. Some of the big commodity trading firms and media houses are excessively bullish on copper prices, and the price is estimated to reach $20,000 per ton by 2024.
Chile is the world’s largest copper producer, accounting for more than a quarter of global production, but is expected to face challenges with copper supply in the near future.
NICICO Sales Double
The National Iranian Copper Industries Company’s sales more than doubled (101% growth) in the first 10 months of the current fiscal 2021-22 (March 21-Jan. 20) compared with last year’s similar period, according to the managing director.
“During this period, the company earned 628.47 trillion rials [$2.28 billion] from the sale of its products,” Sa’d-Mohammadi was also quoted as saying by MesPress.ir
“NICICO sales stood at 76.59 billion rials [$294 million] in the 10th month of the year [Dec. 22-Jan. 20],” he added.
The official noted that the company exported 19,114 tons of copper cathodes in the 10th month.
NICICO is a leading copper producer in the Middle East and North Africa region, and its mines hold close to 14% of Asia’s copper deposits and about 3% of global reserves.
The functions of this company include, among others, extraction and production of high-grade copper products such as cathode, slab, billet and 8-mm wires.
NICICO made 260.46 trillion rials ($1 billion) in net profit in the last Iranian year (March 2020-21), up 118% YOY.
The company’s sales volume stood at 419.4 trillion rials ($1.6 billion) during the year, up by 87% YOY.
Sarcheshmeh and Miduk in Kerman and Sungun in East Azarbaijan are among the most important copper mines of the country.
Iran holds about 4 billion tons of estimated copper reserves, according to the Geological Survey of Iran.
According to the United States Geological Survey, Iran holds the world's ninth largest copper reserves.
Sungun Complex is a subsidiary of NICICO and Khatam Al-Anbia is a major conglomerate in Iran. It is Iran’s largest copper mine with 1.5 billion tons of identified reserves.
“Sungun copper reserves have increased by 523 million tons in the past two years,” NICICO’s managing director was quoted as saying by IRNA.
According to Sa’d-Mohammadi, Sungun copper reserves were estimated at 320 million tons three to four years ago, but currently they have risen to 2 billion tons, of which 1.3 billion tons are deemed “economically viable”.
According to the Majlis Industries and Mines Commission, the value of Sungun copper mine reserves stands at $320 billion, equivalent to 10 years of Iran's exports.
At the current rate, copper extraction from the Sungun mine will last 380 years and even if the current annual production of 300,000 tons of concentrate triples, it will take 130 years to complete extraction from the mine reserves, it added.
Copper Industry Output Under IMIDRO Review
NICICO produced 293,559 tons of copper anode during March 21-Jan. 20 unchanged year-on-year, latest data released by the Iranian Mines and Mining Industries Development and Renovation Organization show.
Around 26,543 tons of copper anode were produced in the month ending Jan. 20, down 10% year-on-year.
An aggregate of 1.02 million tons of copper concentrate were produced in the 10-month period, rising by 2% YOY.
During the 10th month, output reached 104,462 tons, registering a 13% growth compared with the same period of last year.
The production of copper cathode hit 239,042 tons during the period under review, up 3% YOY.
Around 22,699 tons of copper cathode were produced during the 10th fiscal month, indicating an 8% growth compared with the same period of last year.
