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'Copper is the new lithium'; these metals are facing 'shortages' - Nicole Adshead-Bell

Kitco News

(Kitco News) - As the U.S. and Europe move towards more electricity use in transportation and energy, copper will rise in demand even as supply crunches remain, said Nicole Adshead-Bell, Director at Cupel Advisory .

"Copper is the key industrial metal," she said. "[But] there is a paucity of new discoveries, and there's a paucity of material supply."

Bloomberg projects a 50 percent rise in demand for copper by 2040, largely due to transportation needs.

"[Copper is] heavily used in batters in cars," Adshead-Bell explained. "The increase in copper use from an ICE vehicle to an electric vehicle is from 100 pounds to 400 pounds. "

Adshead-Bell spoke with David Lin, Anchor and Producer at Kitco News at the Precious Metals Summit in Beaver Creek.

Fossil Fuels and Electrification

Despite the rising trend of electrification such as EVs (electric vehicles), Adshead-Bell said that there has been too much haste to reduce fossil fuel consumption.

"Given that [California] has got energy issues and lack of a secure supply, [the governor] asked owners of EV vehicles not to charge their cars," she said. "What the environmental movement has done, and what a lot of the ESG elements have done, is to increase the cost of living."

Adshead-Bell claimed that "the environmental lobby" has successfully campaigned for policies that have "resulted in a lack of security and supply in key commodities," driving up the costs of raw materials.

She added that, "the average person out there has no idea where their stuff comes from, they don't like mining… and so governments are willing to say palatable phrases, but less willing to facilitate a change."

However, she pointed to "some very good ESG organizations, like Digbee, that understand how mining works."

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Shortage of Key Minerals

In addition to copper, there are several industrial metals, such as silver and nickel, that are expected to face shortages in the coming years. Adshead-Bell noted that supply cannot keep up with demand, since it takes years to get a mine into production.

"The average lead time from discovery to production is in excess of 15 years," she observed. "In our industry, it's getting tougher to permit and build mines."

While she praised countries like Brazil, which have "implemented a strategic minerals policy" that has "streamlined [mine] permitting," she claimed that OECD countries like the UK have not been as successful in fixing this "critical supply issue."

"Security of energy supply matters," she stated. "For those people facing very material energy shortages in most of Europe this coming winter… there's a visceral realization about security and supply of not just energy, but of key commodities."

To find out Adshead-Bell's views on where the copper price is headed, watch the video above.

Follow David Lin on Twitter: @davidlin_TV

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