DECOUPLE CRITICAL MINERALS FROM CHINA COULD BE COSTLY, DELAY ENERGY TRANSITION - WOOD MACKENZIE

KUALA LUMPUR, Aug 15 (Bernama) -- As major global economies look to reposition critical minerals supply chains outside China, the resulting inefficiencies could increase the cost of finished goods and delay the energy transition, according to a new report by Wood Mackenzie.

The world cannot achieve decarbonisation without copper, a crucial component in electrification. Currently, China dominates copper mining, downstream processing (smelting and refining) and semi-manufacturing.

The report estimated that demand for copper is expected to rise by 75 per cent to 56 million tonnes (Mt) by 2050, necessitating substantial investment. Therefore, shifting away from China will require massive investments in new copper processing and fabrication facilities.

The Wood Mackenzie's August Horizons report, ‘Securing copper supply: no China, no energy transition’, states that replacing China’s smelting and refining capability alone to meet the rest of the world's demand would require nearly US$85 billion. (US$1=RM4.41)

In a statement, Wood Mackenzie research director, global mining, Nick Pickens said based on the company’s projections, there will be an additional 8.6 Mt of copper demand outside China over the next decade.

“This demand represents 70 per cent of smelter capability and 55 per cent of fabricator capacity in the rest of the world. As governments and manufacturers aim to diversify away from China, it is crucial to consider the entire supply chain, not just mining operations,” he said.

The report stated that since 2000, China has accounted for 75 per cent of global smelter capacity growth and currently controls 97 per cent of global smelting and refining capacity, contributing over three Mt of production and nearly US$25 billion in investment.

It also highlighted significant shifts in the global copper smelting landscape, with new facilities set to come online this year outside China.

India is launching a custom smelter, Indonesia is adding two integrated smelters, and a new smelter in the Democratic Republic of the Congo is expected to be completed by 2025, primarily driven by Chinese investment, will see these additions raising global smelting capacity by 1.6 Mt, according to Wood Mackenzie.

However, there are no plans for new primary smelting capacities in North America or Europe. Instead, the United States is focusing on the secondary market and scrap copper, including establishing its first secondary smelter for complex materials in Georgia.

-- BERNAMA