Platinum and copper – two commodities with which southern Africa is endowed – will emerge as the winners as the world transitions to a greener and less carbon-intensive footprint.Colin Hamilton, managing director of commodities research at BMO Capital Markets, said while global copper demand had not grown much in 2019, there was always hope for the commodity that would be the “winner thanks to the energy transition in t he world ”.According to Hamilton, slow copper demand over the past months could be attributed to the slowing down of the Chinese economy.“China is the world’s largest industrial economy and 2019 saw the slowest industrial growth in the country since 2002.”Global mine outputs in 2019 were also similar to those of 2016 while a country like Chile has not seen much growth in its copper production for the past 15 years.“We are also not seeing any major projects coming on line at the moment. The raw material end is still ver y tight.”But the future outlook for copper was very bright, said Hamilton.Analysts around the world are predicting an aggressive growth rate for the commodity. An estimated million tons more will be required by 2025 for electric vehicle production and another million tons for the manufacture of charging stations for these vehicles, while electricity grids will also have to be upgraded.“Fast chargers use around 8kg of copper per unit, while the level one and two chargers require only about 1kg per unit. The fact remains there is going to be increased demand for the c om mod it y.”Hamilton said new copper fields would have to be found and developed to satisfy the growing market demand. “African copper output is now exceeding that from North America with peak output for the continent set at around 2022.”He said while new projects on the continent were incremental due to the low grade of the resource, projects that had not been viable ten years ago would now become viable.“We are going to need a fair amount of new copper mines to meet the demand that is coming.”
INSERT: An estimated million tons more will be required by 2025 for electric vehicle production.– Colin Hamilton